The ‘Scarlet M’: State uses shame, fines to fight misclassification — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

The ‘Scarlet M’: State uses shame, fines to fight misclassification

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in Compensation and Benefits,Firing

Under a new law, California em­­ployers face penalties as high as $25,000 for willfully misclassifying employees as independent contractors.

Signed into law in October, Senate Bill 459 allows the California Labor and Workforce Development Agency (LWDA) to levy fines of at least $5,000 against employers that misclassify workers and requires the em­­ployers to publicize their violations on their company websites.

Price of noncompliance

The law authorizes fines of $5,000 to $15,000 for any misclassification violation. However, should the LWDA or a court find that an em­­ployer en­­gaged in a “pattern or practice” of misclassification, the fines may range from $10,000 to $25,000. That’s in addition to other penalties imposed, such as retroactive payment of payroll taxes and benefits.

The law also bars employers from charging fees or making deductions from compensation for any purpose—including charging workers for goods, materia...(register to read more)

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