California Employers Should Remain Cautious when Classifying their Workforce, Notwithstanding More Lenient Federal Policies

California

 

From JDSupra, Dustin Carlton warns that California companies should still be vigilant about classifying workers as independent contractors even through the Trump administration has taken a more company-friendly approach.  Dustin writes:

Although the Trump administration rescinded its guidance on worker misclassification earlier this year and appears to have otherwise taken a “softer approach” to misclassification enforcement, California employers should remain diligent in properly classifying their workers and should not allow lax federal enforcement to lead to similarly lax corporate policies.  California employers remain subject to strict laws governing worker misclassification.  California law presumes that all workers who render services for another are non-exempt employees unless employers prove that they are independent contractors or exempt employees. Cal. Lab. Code § 3357. Employers who willfully misclassify their workers can be subject to steep penalties.

Steep Penalties Await Employers Who Misclassify Employees

For instance, if the Labor and Workforce Development Agency or a court finds that an employer has wilfully misclassified an individual as an independent contractor, the California Labor Code provides that the employer shall be subject to a civil penalty between $5,000 and $15,000 for each violation.

Penalties Can Add Up when there is a Pattern of Misclassification

If a tribunal finds that the employer has engaged, or is engaging, in a pattern or practice of violations, the employer shall be subject to a civil penalty of between $10,000 and $25,000 for each violation (in addition to other penalties or fines permitted by law).  Obviously, these penalties can add up quickly for employers with large workforces.  Yet, an employer’s potential liability does not end there.

Read the full story at California Employers Should Remain Cautious when Classifying their Workforce, Notwithstanding More Lenient Federal Policies

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