SB 459, signed by Gov. Jerry Brown in October 2011, prohibits employers from willfully misclassifying an employee as an independent contractor. “Willful misclassification” means that the employer is trying to “avoid employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” The new law also makes any non-lawyer who advises an employer to willfully misclassify employees jointly and severally liable along with the employer.
Penalties for violation include:
1. $5,000 to $15,000 civil penalty per violation.
2. $10,000 to $25,000 civil penalty for a “pattern and practice of violations.”
3. The court or California Labor and Workforce Development Agency (“CLWD”) can contact the California State Contractor’s Licensing Board and require it to initiate action.
4. Required notice posting, visible to all employees and the public, stating that the employer has committed a serious violation of the law by willfully misclassifying employers and independent contractors; that it has changed it business practice to avoid further violation; that any worker believing he or she is misclassified may contact the CLWD; and that the notice is being posted pursuant to a state order. This notice must be signed by a company officer and must remain posted for one year.
Delay in Requirement to Notify Employees of Right to Unionize
The National Labor Relations Board (“NLRB”) has postponed the effective date of its controversial rule requiring all employers to post notices advising employees of their right to unionize or otherwise demonstrate against their employer. The effective date has been postponed from November 14, 2011 to January 31, 2012.
The NLRB claimed that the reason for the postponement is “to allow for enhanced education and outreach.” However, it is clear that the postponement is due to pressure from impending legal challenges in the United States District Court. Furthermore, the House of Representatives proposed a rider to the NLRB’s 2012 budget which would prohibit the NLRB from allocating any portion of its budget towards enforcing the rule.
The NLRB’s official press release can be viewed here.
Important New Law for California Employers
The California Legislature recently enacted a new law that requires all employers to give their new, non-exempt hires written notice regarding the terms of their employment. This law went into effect on January 1, 2012. The form is accessible through this link. Keep in mind that you do not need to have your new hires fill out this form if 1) the employees are directly employed by the state or any political subdivision; 2) the employees are exempt and not entitled to overtime; or 3) the employee is covered by a collective bargaining agreement.
This law is not retroactive, so only new employees as of January 1, 2012 need to fill out this form. Be sure to keep a copy of this form in the employee’s personnel file.
What is important about this new law is that all employers must be clear about classifying their new hires as either exempt or non-exempt at the outset of their employment.
Happy Holidays! See You in ’12!
I’m taking the holidays off from the blogosphere. Make sure to check back after the 1st! Wishing you and yours all the best for the new year.
……….. I’m out!
