Cal. Law Penalizes Employers For Willful Misclassification
Employers who willfully misclassify individuals as independent contractors will now be hit with severe penalties. According to Senate Bill 459 — effective as of January 1, 2012 — employers in California will be slapped with $5,000 to $15,000 penalties per violation. If the employer is found to have engaged in a "pattern or practice" of willfully misclassifying its employees, the penalty increases to between $10,000 and $25,000 per violation.
In addition to the monetary penalties, employers who violate the law are required to post a "prominent" notice on their public website stating, among other things, that they have "committed a serious violation of the law" by willfully misclassifying employees, and directing any other employees who feel they have been misclassified to contact the Labor and Workforce Development Agency.
According to reports, the California Labor Federation endorsed the bill, along with the California Teamsters Public Affairs Council and the Communications Workers of America. Business and employer groups, including the California Chamber of Commerce, California Retailers Association and Associated General Contractors, opposed the bill as it moved through the legislature in 2011.
The bill was signed into law by Governor Jerry Brown on October 9, 2011.
Additional information is available here.
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