California Senator Steve Padilla (D-San Diego) requested the state's Labor and Workforce Development Agency to investigate HR startup Deel for reportedly misclassifying employees as independent contractors to avoid giving them employment benefits and labor protections. Padilla also believes that Deel advised clients to misclassify workers to avoid taxes. The San Francisco, Calif.-based startup was last valued at $12B. - Since its founding in 2018, Deel has secured nearly $700M in funding from VC firms, including Andreessen Horowitz and Emerson Collective.
- An Insider report published earlier this March reported that half of the company's workforce was classified as independent contractors, including CEO Alex Bouaziz.
- Deel dismissed the claims, arguing that less than 1% of its U.S.-based workforce were independent contractors.
- Padilla wrote to Secretary Stewart Knox and the Labor and Workforce Development Agency last week, urging them to open an investigation into the matter, citing the Insider article.
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