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)