I'd be surprised if calling something a "tip" makes it legally obligated to go to a contractor. I'm sure their lawyers are very aware of the law on this. As someone else said, there is almost certainly a binding arbitration clause. This removes the possibility of individual or class-action lawsuits.
edit: The abuse of the term "independent contractor" is just one of many examples of how labor law enforcement has become lax in the last several decades. How many people on this site aren't in management and work unpaid overtime?
But it does not remove the ability of the court to overrule the clause itself. So someone could still sue Instacart knowing that it will be thrown out if the court decides to enforce the clause.
In my life experience, these things are almost always up in the air until a judge says otherwise.
Getting to the contractor thing, the most workers can really do is file IRS Form SS-8 and see if the IRS will release them of some of their tax obligations. Other than that, there's really not that much enforcement.
Source: I was a misclassified contractor in 2017 while working in WA state. IRS forgave some of my tax burden, but Labor/Industries and Employment Security are absolutely useless if you don't have a literal Form W2 to use.
Which they will. There's been a few recent cases that have made mandatory arbitration clauses more-or-less bulletproof.
In fact, I would hesitate to say that the lawyers for most startups have any clue what they're doing, as most seem to be in it to play startup lawyer rather than provide necessary legal advice to their client/employer.
I don't think "oh the tip went to the contractor we just lowered their wages by the same amount" sounds convincing in a court room.
I think the question though is _why_ is that? If I steal $950 from someone then it's criminal, but if I refuse to pay them what I agreed then it's civil. It's an odd discrepancy IMO.
Why do you keep saying things to this affect?
A company stiffing a supplier is going to rapidly find themselves without suppliers, or the supplier can afford to / accounts for being stiffed on some orders.
An independent contractor who works for one, or maybe two very similar types of, company is very much like an employee in every way that matters to that individual “independent” contractor, and literally nothing like a B2B supplier.
Additionally, you seem preoccupied with existing legislation as though it has some higher virtue, whereas in reality the law can be, and frequently is, unjust and absurd.
