State slapped down on misclassification: Employers don’t have to defend themselves twice

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in Employment Law,Human Resources

A California Court of Appeal has held that an employer does not have to endure two trials on whether its workers are employees or independent contractors. The decision was based on the legal principle of collateral estoppel, since the company had already litigated the issue with a state agency.

That’s potentially good news for employers that win a misclassification case before one agency. It means they won’t have to fight another agency over the same question.

Recent case: In 2003, Happy Nails, which owns several nail salons, restructured its business, turning cosmetologists working at its facilities into independent contractors rather than employees. In 2004, the state Employment Development Department (EDD) argued that the workers were em­­ployees, but lost on that issue before the Unemployment Insurance Appeals Board.

Nearly four years later, the Division of Labor Standards Enforcement (DLSE) cited and penalized Happy Nai...(register to read more)

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