Gusto updated its Employer Terms of Service from version 16.0 to version 16.1, effective April 23, 2026. The update added substantial new language clarifying who qualifies as an 'Employer' versus a 'Member,' how the platform can be used, and reinforcing that disputes must be resolved through binding individual arbitration — not class-action lawsuits. Employers using Gusto should be aware that this version explicitly states they waive the right to a jury trial and class-action participation.
Gusto's updated Employer Terms now explicitly state that employers waive the right to participate in class-action lawsuits and to have a jury trial — meaning disputes with Gusto must be resolved through individual binding arbitration. The new version also adds clearer definitions of who counts as an 'Employer' versus a 'Member,' which affects how different users of the platform are governed. You can review Section 24 of the Gusto Employer Terms of Service to understand the full arbitration terms and consider opting out if an opt-out mechanism is available within the specified window.
If you have a dispute with Gusto, you cannot join a class-action lawsuit or go to a jury trial — you must arbitrate individually.
Gusto now clearly spells out who counts as an 'Employer' and who counts as a 'Member,' which determines which terms govern your use of the platform.
+ 2 more obligation changes. Full breakdown available with Watcher.
Unlock — $9.99/mo →The explicit addition of a class-action waiver and jury trial waiver means employers using Gusto give up meaningful legal remedies if Gusto makes a systemic error affecting many customers — each employer would have to fight individually in arbitration. This significantly shifts the balance of legal power toward Gusto and away from its business customers.
Employers are now explicitly prohibited from pursuing class-action lawsuits or jury trials against Gusto, with disputes limited to individual binding arbitration.
New language defines 'Employer' as the legal entity (not the individual), clarifying who is bound by the Employer Terms versus the Members Terms.
Owners or shareholders acting as both employer-administrators and employee-members are now explicitly addressed, with each role governed by separate terms.
ConductAtlas Policy Archive Entity: Gusto | Document: Gusto Terms of Service | Record: CA-C-000668 Captured: 2026-04-25 06:29:21 UTC URL: https://conductatlas.com/change/2026-04-25-gusto-gusto-terms-of-service-668/ Accessed: May 2, 2026
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Gusto's Employer ToS moved from v16.0 to v16.1 effective April 23, 2026, with the most significant addition being an explicit, capitalized class-action waiver and jury trial waiver for employers. This directly touches mandatory arbitration compliance obligations. Organizations that use Gusto on behalf of their own employer clients (e.g., HR platforms, PEOs, accountants) should assess whether acceptance of these terms on behalf of clients creates downstream exposure. Action is required for any compliance team managing vendor agreements with Gusto to confirm acknowledgment of the updated arbitration provisions.
1. FTC Act Section 5 (unfair or deceptive acts or practices) — mandatory arbitration clauses with class-action waivers in consumer-facing business services are under ongoing FTC scrutiny.
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ConductAtlas provides verified policy intelligence sourced directly from platform documents. All analysis is intended to support, not replace, legal and compliance review. Record CA-C-000668.
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