Many business owners and employers may be unsure of the exact requirements for classifying a worker as an independent contractor or employee. Some business owners or operators may intentionally misclassify these workers to benefit their business. When this happens, there is recourse for the workers. Our San Francisco employee misclassification attorneys at The Armstrong Law Firm are here to help. We are ready to discuss your concerns about misclassification in your workplace and ensure that everyone is appropriately compensated for their work.
Worker Classification in California
The state of California has two primary classifications of workers within a workplace. These classifications have different requirements, regulations, and benefits for both workers and employers. However, any confusion or misclassification can lead to significant consequences, making it crucial to correctly classify workers. Most commonly, an employee position is misclassified as an independent contractor. This classification can alleviate certain taxes and benefit requirements from the employer while still placing constraints on job performance and requirements that are inappropriate for a contractor.
Problems of Misclassification
One of the problems with misclassifying an employee as an independent contractor is that you miss out on benefits to which you may be entitled as an employee. For example, as an independent contractor, you are ineligible to receive health benefits, paid time, or to access workers’ compensation benefits if you are injured. This can leave you completely unprotected in a situation where your employer may be legally required to provide support.
California Protections Against Misclassification
It can be incredibly frustrating to realize you have been misclassified because you try to access services you are entitled to or realize that you suddenly owe thousands of dollars in unpaid taxes. Fortunately, California has protections that hold employers accountable. California Labor Code 226.8 explicitly states that it is unlawful for an employer to misclassify a worker as an independent contractor. If an employer is found violating this law, they may be held accountable through a civil penalty of $5,000-$15,000 for each violation. This penalty is in addition to any other penalties that may be legally appropriate. If the investigating body determines this misclassification is part of a larger pattern of behavior, the employer may be fined between $10,000 and $25,000 per violation.
Compensation Available for Misclassification
If you have been a victim of misclassification by your employer, you may be entitled to further compensation for your losses and damages. Working with an overtime and wage hour lawyer in San Fracisco, you may better understand what you can expect from compensation from a lawsuit. The details of these damages will vary for an individual’s situation, but may consist of:
- Unpaid rest or meal periods
- Unpaid breaks
- Unpaid overtime
- Interest and penalties
In addition to a civil lawsuit, you may have recourse in filing a claim through the Private Attorneys General Act (PAGA), which allows an affected employee to file a grievance on behalf of themselves, other employees, and the state of California. The individual who files the complaint through PAGA is eligible to receive 25% of the penalties, and the remaining amount is paid to the state of California. You can contact us at the Armstrong law firm to discuss the compensation options that may be available to you because of your employer’s misclassification.