The basis of the suit against Handy is the folks filing the suit claim they should be classified as employees, while the company claims they are independent contractors.
If the courts find they have been misclassified by Handy and should have been classified as employees, Handy will face substantial fines and penalties. They will also have to comply with a raft of labor laws they currently don't have to deal with.
Employee misclassification - claiming a worker is an independent contractor instead of a traditional employee - has long been a thorny issue.
The laws in this area are inconsistent and open to interpretation. They also vary from state to state and state laws vary from federal government laws.
This is because sharing economy business models only work if sharing economy providers - Task Rabbits, AirBnB hosts, Uber drivers, etc. - are independent contractors.
If sharing economy companies have to hire their service providers as employees, the added costs and administrative requirements would severely damage their profitability.
This suit and others like it will be hotly contested in the courts. The sharing economy companies have lots of money to fight and simply can't afford to lose.
At the same time, government agencies are increasing their scrutiny of employee misclassification due to a growing number of complaints about abusive labor practices by sharing economy companies.
Expect to see many more suits and legal actions like this one filed in the coming months.