Can an independent contractor sue for misclassification?
Suing a California Employer for Misclassification Under California Labor Code §226.8, it is illegal to willfully or intentionally misclassify a person as an independent contractor. Therefore, if your employer intentionally misclassified you as an independent contractor, you could be entitled to compensation.
What is the penalty for classifying an employee as an independent contractor?
The California civil penalty for misclassification of independent contracts is up to $25,000 per “employee” along with back pay, overtime, compensation for non-provided benefits as well as all payroll related taxes, unemployment and workers compensation.
What happens if an employee is misclassified as an independent contractor?
California law also permits employees to recover civil penalties (like a fine) from employers who misclassify employees as independent contractors. California Labor Code Section 226.8 provides for civil penalties ranging from $5,000 to $15,000 per violation.
What are the penalties for misclassifying an employee as an independent contractor in California?
Under Labor Code section 226.8, which prohibits the willful misclassification of individuals as independent contractors, there are civil penalties of between $5,000 and $25,000 per violation. Willful misclassification is defined as voluntarily and knowingly misclassifying an employee as an independent contractor.
How do I report an employee misclassification?
If employee misclassification is causing tax fraud, workers can anonymously report their employers to the IRS by filing Form 3949-A. If workers would like the IRS to make a determination about their worker status, they can file the non-anonymous Form SS-8.
Is misclassification illegal?
If your employer misclassifies you as an independent contractor, you lose rights afforded by California employment laws that are designed to protect you as an employee.
What are the consequences of misclassifying workers as contractors rather than employees?
Improperly classifying workers as independent contractors rather than employees deprives the state and federal governments of properly due tax revenue, including income, Social Security, Medicare, and unemployment taxes, that are needed to pay for public services and benefits such as unemployment insurance.
How do I report employee misclassification?
How do I report misclassification of employees in California?
Report workers’ compensation fraud Report misclassification of an employee as an independent contractor. For misclassification affecting a group of employees within a business, contact the Bureau of Field Enforcement (BOFE).
What are the penalties for misclassifying employees?
If the IRS determines that an individual has been misclassified, it may levy penalties against the employer, including, but not limited to, a $50 fine for each Form W-2 the employer failed to file on such employee, a penalty of up to 3% of the wages, plus up to 40% of the FICA taxes that were not withheld from the …
Can I sue for employee misclassification?
Under California labor laws, a non-exempt employee who is misclassified as exempt may be able to sue their employer for unpaid wages, interest, damages, and attorney’s fees. If you have further questions after reading this article, we invite you to contact us at Shouse Law Group. 1.
Can I classify a worker as an independent contractor?
The safest bet would be to classify and pay this worker entirely as an employee for all the tasks they perform. However, if the employee has an established outside business, and the contracted work doesn’t pertain to this employee’s duties, then you may treat the employee as an independent contractor for that specific work.
Can you sue an employer for employment misclassification?
When a worker is misclassified as an independent contractor and that worker works more than 40 hours per week, that worker may be eligible to file a lawsuit against the employer seeking unpaid overtime and other damages. Employers misclassify for a wide range of reasons.
How do independent contractor misclassification claims arise?
Usually, independent contractor misclassification claims come about by a complaint by the employee to a federal or California agency alleging compensation or employment issues or during an audit by the IRS, California Employment Development Department (EDD) or other California agency such as the Labor Commissioner’s Office.