Assault on Independent Contractor Misclassification Continues: California Legislature Passes and Sends Aggressive New Legislation to Governor Brown for Signature

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Billed as prohibiting and punishing the “willful misclassification” of employees as independent contractors, S.B. 459 would impose stiff civil penalties for each violation and even higher penalties if a “pattern” of violations is found. Both houses of the California Legislature recently passed S.B. 459 and sent it on to Governor Brown for signature. This measure joins a plethora of legislative and administrative efforts at the federal and state levels to deter and punish the misclassification of employees as independent contractors. (See recent Schnader Alert — “Senate Bill Proposes to End Misclassification of Independent Contractors”.)

In addition to imposing new civil penalties, S.B. 459 also would empower the Labor Commissioner to assess damages on behalf of those misclassified; subject non-lawyer consultants to joint liability for knowingly advising an employer to classify a worker later deemed an employee as an independent contractor; and require an offending employer to post a notice on its website for one year containing specific information about its violation of the law. If signed by the Governor, its provisions will appear as new Sections 226.8 and 2753 of the Labor Code.

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