California Labor Code § 226.8 LC prohibits employers from knowingly and voluntarily misclassifying you as an independent contractor if you are an employee. Each violation carries a civil penalty of $5,000 to $15,000 paid to the LWDA (Labor and Workforce Development Agency).
Meanwhile, if a court of law or the LWDA finds that your employer was engaging in a pattern and practice of violating LC 226.8, then each misclassification carries a $10,000 to $25,000 fine.
Frequently-Asked-Questions
Do employers have to announce it when they misclassify me?
What if I were charged for work-related expenses?
Suppose your employer willfully misclassified you as an independent contractor. In that case, they cannot charge you any fees – or make deductions from your compensation – for any of the following items arising from your employment:
- goods,
- materials,
- space rental,
- services,
- government licenses,
- equipment maintenance, and
- fines.
Legal References
- California Labor Code 226.8 LC – Unlawful activities; Penalties; Disciplinary action; Information to be posted on Internet website; Enforcement. The pertinent text of the statute reads as follows:
226.8. (a) It is unlawful for any person or employer to engage in any of the following activities:
(1) Willful misclassification of an individual as an independent contractor.
(2) Charging an individual who has been willfully misclassified as an independent contractor a fee, or making any deductions from compensation, for any purpose, including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment where any of the acts described in this paragraph would have violated the law if the individual had not been misclassified.
(b) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a), the person or employer shall be subject to a civil penalty of not less than five thousand dollars ($5,000) and not more than fifteen thousand dollars ($15,000) for each violation, in addition to any other penalties or fines permitted by law.
(c) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a) and the person or employer has engaged in or is engaging in a pattern or practice of these violations, the person or employer shall be subject to a civil penalty of not less than ten thousand dollars ($10,000) and not more than twenty-five thousand dollars ($25,000) for each violation, in addition to any other penalties or fines permitted by law.See also: Villalpando v. Exel Direct Inc. (N.D. Cal. Mar. 28, 2014) Case No. 12-cv-04137 JCS; Provost v. YourMechanic, Inc. (Cal. App. 4th Dist., 2020) 55 Cal. App. 5th 982; Fed. R. Civ. P. 23(b)(3); Bowerman v. Field Asset Servs., Inc., (9th Cir., 2022) 39 F.4th 652; Jose J. Mejia, et al. v. Roussos Construction, Inc. (Court of Appeal of California, Third Appellate District, 2022) 76 Cal. App. 5th 811.