Bill S.B. 459
This bill would prohibit willful misclassification of employees as independent contractors. The bill also authorizes the Labor and Workforce Development Agency to assess specified civil penalties from persons or employers violating the bill.
This bill also provides that a person who, for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status shall be jointly and severally liable with the employer if the individual is not found to be an independent contractor. This bill exempts a person who provides advice to his or her employer or an attorney who provides legal advice in the course of practicing law.
This bill would require a person to provide to an individual hired as an independent contractor, at the time of hiring, a notice that the individual has been hired as an independent contractor, a statement explaining the impact that the individual’s status as an independent contractor has on his or her tax obligations and eligibility for labor and employment protections, and a notice of the individual’s ability to seek advice from the Employment Development Department (“Department”) or the Labor Commissioner (“Commissioner”) as to whether the individual is properly classified as an independent contractor.
The bill also would require a person, for a period of at least 2 years, to maintain records of the independent contractors engaged by the person which include specified information concerning each independent contractor, and to make these records available for inspection.
The bill would provide that a person who willfully fails to maintain these records or permit inspection of those records is subject to a civil penalty of $500. The bill also would provide that a person who neglects or refuses to furnish information requested, refuses access to his or her place of business, hinders the Industrial Welfare Commission or employees of the relevant state departments, or fails to keep any records required is guilty of a misdemeanor.
The bill also would require the Department to develop a form that includes a notice to an independent contractor regarding the impact that status as an independent contractor has on the individual’s tax obligations and eligibility for labor and employment protections, and a notice that the independent contractor may seek advice from the Department or Commissioner as to whether the individual is properly classified as an independent contractor. The bill would require the Employment Development Department to process a request for advice by an individual regarding whether that individual is an independent contractor or employee.
