SB 459 Update: It Passed!

On Sunday October 9^th, in the second to last batch of bills requiring action, Governor Jerry Brown signed SB 459 into law which will now prohibit companies from willfully misclassifying workers as independent contractors.   California becomes the latest state to enact a law that targets companies who illegally misclassify workers.  With each new law, comes a punishment and this one is no different.  Each violation or individual infraction will result in fines ranging from $5,000 to $15,000.  Should the California Workforce Labor Development Agency determine that an employer displays a violation pattern, the employer’s penalties will increase from $10,000 to $25,000 per violation.

 Scarlet Letter

Financial penalty is not the only form of punishment employers will have to endure. Those found guilty of violating the law must also display a notice to the employees and general public stating the details of the violation. The notice must be signed by an officer of the company and be posted on the employer’s website or place of business (if the employer has no website) for one full year. Hester Prynne, is that you?

Job Killer Act

When yours truly blogged on this bill last month, I didn’t think that it had the slightest chance of passing. After all, people were calling it the “Job Killer Act” and unemployment in California was at 12.1%.  Not to mention, there was  no way that the  Governor would approve a bill that brands those who break the law. Apparently Gov. Brown didn’t pay any attention to the frivolous chatter when he put his pen to work and signed the bill. 

Employers have to pay attention to how they classify their workers

The California Labor Commissioner is out to make an example of businesses that make a practice of cheating the system. Construction industry can you hear me? Though this bill does not specifically name that industry, it’s not hard to read between the lines and understand for whom this bill is intended. However anyone outside of construction, I don’t recommend testing your fate. When this legislation officially becomes law in January, employers will finally have to pay attention to how they classify their workforce or face the consequences.