California court rulings send clear message to employers who misclassify workers as ‘independent contractors’

SAN FRANCISCO — Two recent and very significant legal victories for California workers send a strong message to employers nationwide: if you misclassify your employees, you will face the consequences.

Misclassification is a practice used by some employers to cut costs by declaring their workers to be independent contractors — ducking their obligations to pay at least the minimum wage and overtime pay, and legally required contributions to unemployment insurance and workers’ compensation funds. These employers also fail to remit payroll taxes, resulting in huge losses to state treasuries, and the federal Social Security and Medicare programs.

The U.S. Department of Labor, which has made combatting worker misclassification a major focus of its enforcement efforts, has announced that federal courts have ruled against two Bay Area companies and sided with their employees after investigations revealed that the companies deliberately misclassified the workers as independent contractors to cheat them out of their wages and other critical workplace benefits.

Continue reading at http://www.dol.gov/opa/media/press/whd/WHD20151324.htm.