California Labor Code § 226.8 LC prohibits employers from knowingly and voluntarily misclassifying you as an independent contractor if you are an employee. Each violation carries a civil penalty of $5,000 to $15,000 paid to the LWDA (Labor and Workforce Development Agency).
Meanwhile, if a court of law or the LWDA finds that your employer was engaging in a pattern and practice of violating LC 226.8, then each misclassification carries a $10,000 to $25,000 fine.
Frequently-Asked-Questions
Do employers have to announce it when they misclassify me?
What if I was charged for work-related expenses?
If your employer willfully misclassified you as an independent contractor, they cannot charge you any fees – or make deductions from your compensation – for any of the following items arising from your employment:
- goods,
- materials,
- space rental,
- services,
- government licenses,
- equipment maintenance, and
- fines.
LC 226.8 levies fines for employers who willfully misclassify employees as independent contractors.
What is the purpose of California Labor Code § 226.8?
It prohibits employers from willfully misclassifying employees as independent contractors. It aims to protect workers’ rights and prevent employers from evading their legal obligations.
Can I waive out of California Labor Code § 226.8?
No, you cannot waive your rights under LC 226.8. Any agreement to do so would be considered void and unenforceable.
Can I be fired for pointing out a violation?
No, an employer cannot legally fire an employee for pointing out a violation of California Labor Code § 226.8. Such an action would be considered retaliation and is prohibited under California law.
What if the employer did not willfully misclassify me?
Even if an employer did not willfully violate LC 226.8, they may still face penalties. However, the penalties may be reduced if the employer can demonstrate that the violation was unintentional and they took steps to rectify the situation.
Who gets paid the civil penalties?
The civil penalties for LC 226.8 violations are paid to California’s Labor and Workforce Development Agency. A portion of the penalties may also be awarded to you as part of a successful lawsuit.
Legal References
- California Labor Code 226.8 LC – Unlawful activities; Penalties; Disciplinary action; Information to be posted on Internet Web site; Enforcement. The pertinent text of the statute reads as follows:
226.8. (a) It is unlawful for any person or employer to engage in any of the following activities:
(1) Willful misclassification of an individual as an independent contractor.
(2) Charging an individual who has been willfully misclassified as an independent contractor a fee, or making any deductions from compensation, for any purpose, including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment where any of the acts described in this paragraph would have violated the law if the individual had not been misclassified.
(b) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a), the person or employer shall be subject to a civil penalty of not less than five thousand dollars ($5,000) and not more than fifteen thousand dollars ($15,000) for each violation, in addition to any other penalties or fines permitted by law.
(c) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a) and the person or employer has engaged in or is engaging in a pattern or practice of these violations, the person or employer shall be subject to a civil penalty of not less than ten thousand dollars ($10,000) and not more than twenty-five thousand dollars ($25,000) for each violation, in addition to any other penalties or fines permitted by law.See also: Villalpando v. Exel Direct Inc. (N.D. Cal. Mar. 28, 2014) Case No. 12-cv-04137 JCS; Provost v. YourMechanic, Inc. (Cal. App. 4th Dist., 2020) 55 Cal. App. 5th 982; Fed. R. Civ. P. 23(b)(3); Bowerman v. Field Asset Servs., Inc., (9th Cir., 2022) 39 F.4th 652; Jose J. Mejia, et al. v. Roussos Construction, Inc. (Court of Appeal of California, Third Appellate District, 2022) 76 Cal. App. 5th 811.