Attorney General Ellison reaches settlement with Shipt over allegations of misclassification

Shipt agrees to $800,000 settlement payment and additional protections for workers, resolving AG’s 2022 lawsuit

September 26, 2025 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has reached a settlement with Shipt, Inc. to resolve the Attorney General’s 2022 lawsuit alleging that Shipt misclassified workers—known as “Shoppers”—as independent contractors instead of as employees.  As part of the settlement, Shipt will pay $800,000 to the State of Minnesota and must improve working conditions for Shoppers in numerous key ways. The terms of the settlement were crafted based on input from Shoppers themselves about the most common difficulties they face on the job.

“I took on Shipt to improve conditions for their workers, and that’s what we accomplished with this settlement. Just as we based our lawsuit on complaints from Shoppers themselves, we’ve based this settlement on feedback from Shoppers that will create a more just and fairer work environment for them,” said Attorney General Ellison.  “I am pleased that at the end of this lengthy litigation, we were able to secure better working conditions for Shoppers going forward. My team and I will continue to investigate complaints of employer misclassification and fight for the rights and dignity of working people everywhere. I look forward to using what my team and I learned from this lawsuit to support legislation making it easier to hold employers accountable for misclassifying their workers.” 

In addition to the $800,000 settlement payment, the terms of the settlement include the following relief for Shoppers:  

• With narrow exceptions, when Shipt deactivates a Shopper from the Shipt Shopping App, meaning that Shopper can no longer work with Shipt and make deliveries on their behalf, Shipt must provide that Shopper written statement, explaining which specific provision of the Shopper’s contract that Shipt claims the Shopper violated.
• Shipt must formalize and maintain a process for Shoppers to appeal any deactivation decision by Shipt. Shipt will provide a written response to each deactivation appeal within three business days.  
• Shipt must continue to provide Shoppers with Occupational Accident Insurance at no cost to Shoppers and Shipt must publish instructions on how to file a claim in an easily accessible location. The Occupational Accident Insurance must provide primary coverage and covers the Shopper during the time a Shipt order is active. The Occupational Accident Insurance policy must, at a minimum, cover medical expenses with a total combined single limit of $1,000,000 per accident and disability payments up to $500 per week.
• Shipt must institute an electronic process by which Shoppers can request forgiveness of customer ratings and late delivery. Shipt will provide a description of the ratings and late forgiveness process on its website for Shoppers.
• Shipt must not keep any portion of tips or gratuities given to Shoppers. 
• Shipt must provide Shoppers with timely chat support through the Shopper App.  Additionally, Shipt must provide Shoppers with the opportunity to speak with live Shipt personnel, trained by Shipt to have reasonable familiarity with Shipt’s relevant policies and provide accurate information.  
• Shipt cannot require Shoppers to undergo mandatory training, except for certifications to deliver alcohol or certifications otherwise required by law.  
• Shipt must maintain true and accurate records of Shopper earnings for three years and make weekly pay records available upon the Shopper’s request.
• Shipt must not retaliate against any Shopper for cooperating with the Attorney General, complaining about working conditions at Shipt, or seeking benefits under the settlement agreement.  
• Shipt will  maintain policies prohibiting discrimination in any way against any Shopper or prospective Shopper on the basis of race, color, creed, religion, national origin, sex, gender identity, gender expression, transgender status, sexual stereotypes, marital status, status with regard to public assistance, familial status, membership or activity in a local commission, disability, sexual orientation, military or veteran status, or age.
• Shipt must designate a point of contact to receive any complaints from Minnesota Shoppers referred by the Attorney General.  Shipt must take reasonable steps to investigate and resolve any complaint, and Shipt must produce the outcome of any complaint to the Attorney General upon request.  

Strengthening the Law on Misclassification in Minnesota 

In 2023, the Attorney General formed an Advisory Task Force on Worker Misclassification to study the issue of worker misclassification and its impacts, explore best practices in policy and enforcement, and propose a set of recommendations for both enforcement and regulatory reform.  

In early 2024, the task force adopted a policy proposal that helped form the basis for a landmark bill to combat employer misclassification fraud which passed in the 2024 legislative session.  Among other changes, the bill created the Intergovernmental Misclassification and Enforcement Partnership, in which the Attorney General works alongside other state enforcers to maximize efforts to detect, investigate, and deter employee misclassification. The bill also created a private right of action for victims of employer misclassification fraud and increased penalties to provide meaningful deterrence.  

In December 2024, the task force adopted recommendations for additional steps that should be taken to combat employer misclassification fraud in Minnesota.  These recommendations include expanding a rebuttable presumption of employment to all classification tests used in Minnesota, and streamlining the various tests into a single classification test to be applied across all government agencies.  The task force recommended a user-friendly classification test that provides clear and consistent direction to both workers and businesses, and deters efforts to evade compliance with Minnesota’s misclassification laws.    

Filing a complaint as a worker

Workers with concerns or complaints about systematic violations of state and federal wage laws can contact the Attorney General’s Office through its online complaint form (available in Spanish or English). Minnesotans can also contact the office by calling (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota).