BILL NUMBER: SB 459 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 2, 2011
AMENDED IN ASSEMBLY AUGUST 15, 2011
AMENDED IN ASSEMBLY JULY 12, 2011
AMENDED IN SENATE MAY 27, 2011
AMENDED IN SENATE MARCH 23, 2011
INTRODUCED BY Senator Corbett
FEBRUARY 16, 2011
An act to add Sections 226.8 and 2753 to the Labor Code, relating
to employment.
LEGISLATIVE COUNSEL'S DIGEST
SB 459, as amended, Corbett. Employment: independent contractors.
Existing law prescribes comprehensive requirements relating to
minimum wages, overtime compensation, and standards for working
conditions for the protection of employees applicable to an
employment relationship.
This bill would prohibit willful misclassification, as defined, of
individuals as independent contractors . The bill also would
prohibit charging individuals who have been mischaracterized as
independent contractors a fee or making deductions from compensation,
as specified, where those acts would have violated the law if the
individuals had not been mischaracterized . The bill would
authorize the Labor and Workforce Development Agency to assess
specified civil penalties from damages
against , and would require the agency to take other specified
disciplinary actions against, persons or employers violating
the bill these prohibitions . It would also
require the agency to notify the Contractors' State License Board of
a violator that is a licensed contractor, and require the board to
initiate an action against the licensee. The bill would
authorize an individual to file a complaint, as specified, to request
the Labor Commissioner to issue a determination that a person or
employer has violated these prohibitions with regard to the
individual filing the complaint. The bill would authorize the Labor
Commissioner to assess civil and liquidated damages against a person
or employer based on a determination that the person or
employer has violated these prohibitions.
This bill would provide that a person who, for money or other
valuable consideration, knowingly advises an employer to treat an
individual as an independent contractor to avoid employee status for
the individual shall be jointly and severally liable with the
employer if the individual is not found to be an independent
contractor. This bill would exempt from the provisions regarding
joint and several liability a person who provides advice to his or
her employer or an attorney who provides legal advice in the course
of practicing law.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 226.8 is added to the Labor Code, to read:
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
the employer would have been in violation of
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
any of its departments, divisions, commissions, boards, or agencies,
or a court finds 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) shall be assessed against the person or
employer for each violation, in addition to any other
penalties or fines permitted by law.
(c) If the Labor and Workforce Development Agency , or
any of its departments, divisions, commissions, boards, or agencies,
or a court finds 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 behaviors, 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) shall be assessed against the person or
employer for each violation, in addition to any other
penalties or fines permitted by law.
(d) (1) If the Labor and Workforce Development Agency ,
or any of its departments, divisions, commissions, boards, or
agencies, or a court finds issues a
determination that a person or employer that is a licensed
contractor pursuant to the Contractors' State License Law has
violated subdivision (a), the agency, in addition to any other remedy
that has been ordered, shall transmit a certified copy of the
finding order to the Contractors' State
License Board.
(2) The registrar of the Contractors' State License Board shall
initiate disciplinary action against a licensee within 30 days of
receiving a certified copy of an agency or court finding
order that resulted in disbarment pursuant to
paragraph (1).
(e) If the Labor and Workforce Development Agency , or
any of its departments, divisions, commissions, boards, or agencies,
or or a court finds
issues a determination that a person or employer has violated
subdivision (a), the agency or court , in addition to any
other remedy that has been ordered, shall order the person or
employer to display prominently on its Internet Web site, in an area
which is accessible to all employees and the general public, or,
if the person or employer does not have an Internet Web site, to
display prominently in an area that is accessible to all employees
and the general public at each location where a violation of
subdivision (a) occurred, a notice that sets forth all of the
following:
(1) That the Labor and Workforce Development Agency or a court, as
applicable, has found that the person or employer has committed a
serious violation of the law by engaging in the willful
misclassification of employees.
(2) That the person or employer has changed its business practices
in order to avoid committing further violations of this section.
(3) That any employee who believes that he or she is being
misclassified as an independent contractor may contact the
Division of Labor Standards Enforcement, the Employment Development
Department, or the Franchise Tax Board Labor and
Workforce Development Agency . The notice shall include the
mailing address, e-mail address, and telephone number of
each the agency.
(4) That the notice is being posted pursuant to a state order.
(f) In addition to including the information specified in
subdivision (e), a person or employer also shall satisfy the
following requirements in preparing the notice:
(1) The chief executive officer, president, or other highest
ranking officer shall sign the notice.
(1) An officer shall sign the notice.
(2) It shall post the notice for two years
one year commencing with the date of the final decision and
order.
(3) If the person or employer does not have an Internet Web site,
it shall post a copy of the order at each place where its employees
report for work within the state, and that order shall be prominently
displayed in an area which is accessible to all employees and the
general public.
(g) (1) In accordance with the procedures specified in Sections 98
to 98.2, inclusive, the Labor Commissioner may issue a determination
that a person or employer has violated subdivision (a).
(2) If, upon inspection or investigation, the Labor Commissioner
determines that a person or employer has violated subdivision (a),
the Labor Commissioner may issue a citation to assess damages set
forth in subdivisions (b) and (c) in addition to any other penalties
or damages that are otherwise available at law. The procedures for
issuing, contesting, and enforcing judgments shall be the same as
those set forth in Section 1197.1.
(3) The Labor Commissioner may enforce this section pursuant to
Section 98 or in a civil suit.
(g)
(h) Any administrative or civil penalty
pursuant to subdivision (b) or (c) or disciplinary action pursuant to
subdivision (d) or (e) shall remain in effect against any successor
corporation , owner, or business entity that satisfies
both of the following:
(1) Has one or more of the same principals or officers as the
person or employer subject to the penalty or action.
(2) Is engaged in the same or equivalent trade or
activity a similar business as the person or
employer subject to the penalty or action.
(h) For purposes of this section, "willful" means voluntarily and
knowingly to avoid employee status for that individual.
(i) For purposes of this section, the following definitions apply:
(1) "Determination" means an order, decision, award, or citation
issued by an agency or a court of competent jurisdiction for which
the time to appeal has expired and for which no appeal is pending.
(2) "Labor and Workforce Development Agency" means the Labor and
Workforce Development Agency or any of its departments, divisions,
commissions, boards, or agencies.
(3) "Officer" means the chief executive officer, president, any
vice president in charge of a principal business unit, division, or
function, or any other officer of the corporation who performs a
policymaking function. If the employer is a partnership, "officer"
means a partner. If the employer is a sole proprietor, "officer"
means the owner.
(4) "Willful misclassification" means avoiding employee status for
an individual by voluntarily and knowingly misclassifying that
individual as an independent contractor.
(i)
(j) Nothing in this section is intended to limit any
rights or remedies otherwise available at law.
SEC. 2. Section 2753 is added to the Labor Code, to read:
2753. (a) A person who, for money or other valuable
consideration, knowingly advises an employer to treat an individual
as an independent contractor to avoid employee status for that
individual shall be jointly and severally liable with the employer if
the individual is found not to be an independent contractor.
(b) This section does not apply to the following persons:
(1) A person who provides advice to his or her employer.
(2) An attorney authorized to practice law in California or
another United States jurisdiction who provides legal advice in the
course of the practice of law.