Business Law

Legal Reasoning Project |

Business Law |

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Misclassifying workers is one of the many ways that companies are able to take advantage of their employees. The difference between an employee and a contractor is more than just the financial paperwork. Contractors have more of a choice in not only the procedures that they follow, but also their wages. Most contractors set their own terms depending on the job that they are taking on. In cases that the employer is taking advantage of the employee, the employer is dictating what the “contractor” does and how they do it while paying them unreasonable wages based on the fact that they are employed as a contractor, an agreement that they were probably forced into in order to work at all.

When a worker is misclassified as an independent contractor in the state of California, the worker is not subject to California minimum wage and overtime protection laws. The worker has no worker’s compensation coverage in the event of on the job injuries, no family leave, unemployment insurance, legal right to join a union, and no protection against employer retaliation. Misclassifying an employee as independent contractor creates an unfair playing field for responsible employers who honor lawful obligation to employees. This misclassification of workers results in a loss of payroll tax revenue, estimated at seven billion per year, and increased reliance on the public safety net by workers who are denied access to work-based protections.

Two Janitorial Companies Cited More Than $1.5 Million for Multiple Wage Theft Violation

A Los Angeles news release on May 8, 2014, stated California Labor Commissioner, Julie A. Su, cited two janitorial companies more than $1.5 million for multiple wage theft violations. Two janitorial companies worked together to supply janitorial services in Los Angeles and Orange Counties, intentionally misclassified their staff of 52 workers as...