Tuesday, January 03, 2012

CA Bill 459: The End of Employee Misclassification

Back in September, we wrote about the US Department of Labor's focus on ending employee misclassification. As we rang in the new year, we should have also celebrated California's commitment to supporting that change with the enactment of California State Bill 459.

SB 459 helps to crack down on the misclassification of independent contractors by providing the worker with notice of how he or she has been classified and how to get help if misclassified. It also improves the enforcement process to create greater financial disincentives for employers who misclassify their employees.

Penalties for misclassifying employees range from $5,000 to $15,000 per violation for isolated violations. Where there is a pattern or practice of violations, the penalty range increases — $10,000 to $25,000 per violation. In addition to the monetary penalties, employers who violate the new law are required to post a "prominent" notice on their public website stating, among other things, that they have "committed a serious violation of the law" by willfully misclassifying employees.

The use and abuse of independent contractors poses a serious threat to workers’ rights and undermines working conditions for all workers. This will be a game-changing law for studios who enjoy misclassifying their artist employees for profit. With the stiff financial penalties written into the law, its easy to imagine a company taking a fresh look at their employment practices.


Walt's Brain said...

I presume this bill goes into effect as of the start of 2012? It will be interesting to see if the companies who do this will change their M.O. It also appears that not only the company can be heavily fined, but also the actual person who decided to misclassify an employee as an independent contractor. Human resource people should be very afraid!

Anonymous said...

Does this new law have any impact on companies that use Yurcor to ripoff artists? There is a part in the law that says companies cannot charge any fees, which Yurcor definitely does, adding a 5% fee plus all the employer-side taxes. Or are the companies off the hook because Yurcor is technically adding the fees. Either way, one would think that at least Yurcor can be taken down with this law!

Wholesale Printing said...
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