California Prohibits “Willful Misclassification” Of Employees As Independent Contractors

by Sayema Hameed

Employers should be careful when treating workers as individual contractors.  Effective January 1, 2012, California now prohibits “willful misclassification” of individuals as independent contractors.  The “willful misclassification” of an individual is defined as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”

The new law, codified at California Labor Code Section 226.8, provides for the assessment of civil penalties in the range of $5,000 to $15,000 for each violation, and $10,000 to $25,000 per employee in instances involving a repeated “pattern and practice” of misclassification.  In addition, Section 2753 has been added to the Labor Code, which imposes joint and several liability upon any person (excluding attorneys and internal employees) who, for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor if that person is later found not to be an independent contractor.

About Cabada & Hameed LLP

Cabada & Hameed LLP is a law firm serving the greater Southern California region. Formed by “big firm” veterans in 2009, the firm offers exceptional legal representation with experienced attorneys handling Labor & Employment and Business Litigation matters. Partners and co-founders Francisco Cabada and Sayema Hameed bring nearly two decades of legal experience to every matter and ensure that clients receive individualized counsel, around-the-clock availability, the utmost discretion and maintenance of the highest professional and ethical standards. For more information, please visit the website

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