New California Law Gets Tough on Businesses Using Independent Contractors – Los Angeles Employment Attorneys Blumenthal, Nordrehaug & Bhowmik

by Norman B. Blumenthal on October 26, 2012

California Labor Code Section 226.8, passed in early 2012, gets tough on businesses which use independent contractors. Under Section 226.8, businesses that “willfully misclassify” an employee as an independent contractor can be fined from $5 thousand to $15 thousand per Labor Code violation. If the business has a “pattern and practice” of “willfully misclassifying” workers, the fine raises to $25 thousand. Furthermore these fines are in addition to any other penalties, interest, and taxes the business is assessed for the misclassification. Additionally, a business found guilty of “willfully misclassifying” an employee as an independent contractor must prominently post a public notice on their website and/or worksite regarding the misclassification.

“In challenging economic times, businesses often try to save money by reclassifying employees as independent contractors, even when their job descriptions do not change,” explained Norman Blumenthal, founding partner of Blumenthal, Nordrehaug & Bhowmik. Under the Fair Labor Standards Act (FLSA) determining when a worker is an employee versus an independent contractor requires a review of:

Control (Behavior): Who determines what work is to be done, how and when it will be done, and who will do the work. Also who provides any tools, equipment, and supplies used.

Financial Circumstances: Who has made a significant investment in the tools, equipment, and supplies needed to complete the project; whether the worker receives any reimbursement for expenses; whether the worker can incur a profit or loss, or whether the worker operates a business, pays taxes, and offers their services to the public.

If you are a California worker who has been classified or reclassified as an independent contractor, contact Blumenthal, Nordrehaug & Bhowmik. Blumenthal, Nordrehaug & Bhowmik is an experienced California employment law firm with offices located in San Diego, San Francisco and Los Angeles. The firm dedicates its practice to contingency fee employment law work for issues involving misclassification as a salaried worker exempt from overtime, failure to pay vacation wages, misclassification as an independent contractor, off-the-clock work, wrongful termination, discrimination and other California labor laws.

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