California Labor Commissioner’s office and the U.S. Department of Labor Join Forces to Attack Misclassification of Independent Contractors
The U.S. Department of Labor’s (DOL) Wage and Hour Division, and California’s Labor and Workforce Development Agency (LWDA)are operating together under a memorandum of understanding (MOU). This mutual agreement seeks “to protect the rights of employees and level the playing field for responsible employers by reducing the practice conducted by some businesses of misclassifying employees.”
Other states that are under similar MOU’s with the U.S. Department of Labor include Missouri, Montana, Maryland, Massachusetts, Colorado, Connecticut, Hawaii, Illinois, Montana, Utah and Washington. The hope is that by sharing information whenever possible they will be able to assist each others outreach and education efforts. Also, this should increase taxed revenue for both the state and the federal government along with all penalties acquired as a result of any legal proceeding due to misclassification.
The MOU was announced the day following the decision in the Ruiz v. Affinity Logistics Corporation, vacating the court’s ruling that the employees were correctly classified as independent contractors. In this case the court upheld a contractual provision that would apply Georgia law and in doing so gave status as an independent contractor. Georgia law is very different from California law in that California requires the burden of proof to be on the Employer, not the employee, and Georgia does not. The 9th Circuit opposed the District Court’s decision, finding that California law should apply notwithstanding the parties’ contractual selection of Georgia law, because the Georgia law conflicts with what the 9th Circuit found was a fundamental California public policy. This decision was based on the fact the work preformed was done so in California. The 9th circuit did turn the case back to the district court to reexamine the independent contractors issue.
This issue of misclassification has been a hot topic since our country’s economic issues began; all of the various government agencies are working hard to protect employees from being misclassified as well as ensure that all taxes from these employees and employers are being paid out properly. The main thing to take away from this case is that usually where the work is being preformed dictates the law that can be applied to the situation, and that it’s important to follow the guidelines for independent contractors set forth by that state.
Labor law can be complex should you have any questions regarding your employment it is recommended that you contact a San Francisco labor law attorney who can help you explore your rights and in many cases will review your situation without charge.
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