Employee complaints put WeWork under scrutiny
WeWork Cos., the world’s largest co-working company, rents out office space in 140 locations around the world, which means its daily needs are basic but essential: working Internet, clean conference rooms and fresh coffee.
To keep customers happy, WeWork hires a small army of “community staff,” to run the WeWork spaces every day. These 1,200 workers make up more than half of the company’s workforce. In the Bay Area, they run 10 locations in Berkeley, San Jose and San Francisco. But as WeWork shot from 350 to 2,200 employees in two years, some community staff said they were overworked, underpaid and misclassified as ineligible for overtime. Some of their allegations have resulted in legal disputes, and now the company is under scrutiny by state and federal authorities.
One former worker sued the company a year ago claiming she was owed overtime pay. Last year, WeWork settled a case in arbitration with a second ex-staffer, according to a person who had been briefed on the matter but was not autho-
rized to speak about it. A third said she’s planning to sue soon. For some of these workers, the glamour of a job at WeWork, a company now valued at $18 billion, at first obscured the question of whether they were being unfairly denied pay.
WeWork executives said they’ve spent the past year trying to make workers happier by raising pay, clarifying job roles and offering nontraditional perks like trips to Australia. They acknowledge that rapid expansion left staff working hard without much guidance or proper training, but said the problems are fixed. “Those issues are very much behind us at this point, and they’ve been behind us for close to a year,” said WeWork President Artie Minson.
Interviews with more than a dozen former WeWork employees, seven of whom worked there within the past year, echo the allegations and suggest that some problems linger. Former workers describe a chaotic and disorganized company, where young employees are promised they can “Do What You Love,” a company motto. But they were expected to work long hours and told to “Hustle Harder,” another slogan often found on WeWork office walls. Many former workers spoke only on condition of anonymity out of fear of retaliation from the company.
“I’m a Millennial, and we don’t really know our rights,” said Rachel Wynn, a 27-yearold former associate community manager in Washington, who left in 2015 and is planning to pursue a lost-wages case against WeWork. She and other former staffers said they spent much of their time brewing coffee, arranging catering and fixing printers. Sometimes the job involved catching mice and dealing with office party detritus, including used condoms in the meditation room and vomit in the phone booths.
The startup world’s approach to work — strenuous hours and unwavering devotion — can lead to wild success for some employees but can weigh heavily on others, especially low-ranking, non-technical employees. “There’s an enormous amount of misclassification at startups,” said Cliff Palefsky, an employment lawyer in San Francisco. “Many of the people who are working very long hours should be getting overtime. They either don’t know or they don’t want to rock the boat.”
Wynn argued that WeWork misclassified her and her fellow community staffers as managers to avoid paying them overtime. She said they weren’t making many independent decisions in their jobs — which can be a federal requirement for someone to be denied overtime — and instead, were mostly doing menial tasks.
“Because I had manager in my title, I thought that part of my job was staying late,” Wynn said. “I didn’t know it shouldn’t be that way.”
WeWork said that Wynn and Tara Zoumer, a 30-yearold former associate community manager in Berkeley who sued the company last year, “exercised substantial independence and autonomy in their roles. They both worked on small teams running a WeWork location.”
WeWork has had a difficult 12 months. Last summer, it cut 7 percent of its workforce and slashed its 2016 profit forecast by 78 percent, citing problems like delayed openings and higher-than-expected construction costs. The worker complaints highlight problems that don’t show up in financial documents and in many cases, haven’t been previously reported.
Employees who work more than 40 hours a week are required to be paid time and a half for any hours beyond that, with some exceptions, including one for workers whose primary duty is making independent and substantial decisions about the business. That’s the exemption that WeWork used for years to avoid paying overtime to community staffers.
Last year, the Labor Department passed a rule that would ensure that lower-paid fulltime workers — making $47,476 a year or less — would automatically be eligible for overtime. The rule was supposed to go into effect Dec. 1 but was blocked by a judge. In November, WeWork raised salaries for community staff as part of a company-wide pay reassessment. It bumped associate community managers’ salaries to around $50,000 or more, which keeps them from being guaranteed overtime.
Zoumer, who is suing the company over lost overtime wages and wrongful termination, said she wasn’t managing anyone but spent her time doing “a million tiny jobs” like fluffing pillows and setting up catering. She left in November 2015 and sued a few months later.
Long hours and late nights are common at WeWork, and the community staff said they had particularly intense demands on their time. All staffers were expected to attend weekly meetings that could last for several hours after their shifts ended at 6 p.m. Community workers were also expected to stay late for evening events. Twelve-hour workdays were commonplace, said three former staffers. Receptionists now get overtime pay since a change in status last year.
Former community staff said their jobs included postwork rounds of shots and two weekend retreats a year where employees were expected to attend but were not paid or given time off in exchange. WeWork’s annual Summer Camp, held by a lake in the Adirondack Mountains in August, featured Ice Cube and canoes full of beer. It includes WeWork members. Its yearly winter employee summit was held in Los Angeles in January and included a concert by the Chainsmokers. The median age at the company is 28.
Some new employees found the experience intoxicating. “It was like something out of a movie. It doesn’t quite feel real that it’s a company that is putting on this event,” Zoumer said. “A huge stage, top headliners, crazy lights. It felt like a rave.”
It was a sharp contrast to working at a WeWork office every day. Buildings have a ratio of one community worker for about 90 members, the company said. The community staff are also responsible for finding new members. Former staffers said the pressure to meet sales targets was intense. “The goal was to get butts in seats as fast as possible,” said Wynn. WeWork said it has hired 60 dedicated salespeople in the last year to help relieve the load.
WeWork executives said they have been working to improve the job satisfaction of community workers. In August, the company created a “culture committee,” where worker representatives can give feedback.
Former employees said they stayed at the company as long as they did because they felt an emotional bond to WeWork. Employees were often reminded that they were part owners of the company. When WeWork started getting bad reviews on Glassdoor, Chris Hill, the chief community officer, asked community employees to submit positive reviews, according to three former employees. WeWork declined to comment.
“At all the meetings, people were always reminded of how lucky they are to be there, how we’re all so lucky to be part of this experience,” Zoumer said. “The company lingo was said so often — that we all ‘hustle harder.’ ”