There are times when a person or employer might knowingly misclassify a person as an independent contractor as opposed to an employee. Both the California Labor and Workforce Development Agency (CLWDA) and the state’s courts take a very dim view on misclassification. As per section 226.8 of the California Labor Code, the willful misclassification of an employee as an independent contractor is punishable by a civil penalty of a minimum of $5,000 and up to $15,000. If a pattern or practice of such misclassification is found to exist, the penalty is punishable by a penalty of between $15,000 and $25,000.
Posting of a Notice
If the CLWSA or a court determines that a violation of section 226.8 had been committed, the person or employer will be ordered to “display prominently on its Internet Website, in an area which is accessible to all employees and the general public, or, if the person or employer does not have an Internet Web site, to display prominently in an area that is accessible to all employees and the general public at each location where a violation has occurred,” a notice that it has been found in violation of section 226.8 and that policies have now been changed in order to avoid misclassifications.
If an employee has been misclassified as an independent contractor, section 226.8 also prohibits the person or employer from charging the misclassified employee any type of fee, or “making deductions for compensation, for any purpose, for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines . . . . “
The penalties under section 226.8 are harsh. Whether you’re an employer or employee, if you believe that you’re in a misclassification situation, arrange for a consultation with an effective employment lawyer from our office.
Contact our California Labor and Employment Lawyers today.
