The Federal Trade Commission (FTC) and New York's attorney general have accused Handy, a popular gig economy app, of making deceptive claims about how much workers could earn through its platform. In a complaint filed on Tuesday, the regulators alleged that Handy advertised earnings that "don't reflect the reality for the overwhelming majority of workers on the platform."

Handy, which is owned by Angi (formerly Angie's List), has agreed to settle the complaint, but not admit any fault. As part of the settlement, Handy will pay $2.95 million to refund workers who were harmed by the platform's practices. The company will also be required to back up claims it makes about how much workers can potentially earn and make it clear how workers can avoid its fees.

According to the complaint, Handy's ads touted high earnings for workers, but failed to disclose fees and fines that were deducted from their wages. In some cases, workers were required to complete additional jobs or pay a fee to unlock the fastest payouts. The regulators alleged that Handy's ads created unrealistic expectations about earnings, with many workers earning much less than advertised.

In New York, New Jersey, and California, Handy's ads claimed that workers could earn up to a certain rate, but this rate was only accessible to workers in the highest pay tier, which required meeting difficult-to-reach criteria. In other markets, Handy advertised pay for handyman and furniture assembly jobs as high as $45 an hour, even though more than 90% of workers on the platform made less.

The complaint also alleged that Handy charged workers opaque fines, including fines incurred through no fault of the workers. A bug in Handy's system resulted in jobs not being properly canceled, and thousands of workers were fined $50. Workers could only avoid this fine by taking steps such as giving GPS permission to Handy's app and waiting more than 30 minutes at a job site.

The allegations are particularly concerning given the financial struggles faced by many gig workers. According to a 2022 survey by the nonprofit Economic Policy Institute, 14% of gig workers reported earning less than the federal minimum wage. One in five said they'd gone hungry because they couldn't afford enough to eat; nearly one-third didn't pay their entire utility bill in the month prior to the survey.

Handy itself has admitted that many of its workers are on public assistance or live in public housing, according to an FTC press release. The settlement is a significant step towards holding gig economy companies accountable for their treatment of workers.

In a statement, Handy said it has agreed to the terms of the settlement. "Though we were prepared to litigate, we chose to enter into an agreement with these parties to put this matter to rest and get back to putting our 100% focus on supporting our customers: the small businesses who help Americans care for and maintain their homes," a spokesperson told TechCrunch. "None of the agencies' allegations were fair, and this settlement should in no way be construed as a validation of their allegations."

The settlement serves as a warning to other gig economy companies that make false or misleading claims about earnings. As the gig economy continues to grow, it's essential that companies prioritize transparency and fairness in their treatment of workers.