State of California Signs Agreement with DOL to Reduce Employee Misclassification

February 20, 2012

Earlier this month, the U.S. Department of Labor (DOL) issued a press release that our Santa Ana, California attorney Vincent Howard has been following, announcing the signing of a joint memorandum of understanding between Nancy J. Leppink, the deputy administrator of the DOL's Wage and Hour Division (WHD) and Mary Morgenstern, California's Secretary of Labor--regarding the ongoing problem of employee misclassification.

At a press conference held on February 9th, Leppink and Julie A. Su, the Labor Commissioner for California, discussed how the DOL and the state of California will work together to implement new efforts guided by this memorandum--in order to protect the wage and hour rights of employees, to properly classify independent contractors, and to level the playing field for honest employers who are threatened by the practice of employee misclassification.

Labor Commissioner Su stated that California is proud to work in partnership with the DOL in order to attack the illegal practice of employee misclassification--and to address the problems of the underground economy. Su also claimed that her team is ready to work with the DOL in order to raise the labor conditions for hardworking employees and employers across the golden state.

As our Anaheim labor and employment lawyers blog previously discussed, Governor Jerry Brown recently introduced Senate Bill 459--a bill that took effect on January 1, 2012--and punishes employers who engage in the willful practice of employment misclassification with harsh penalties. Last year CA Representative Lynn Woosley introduced a reinvigorated bill from 2010 that also aims to eliminate employee misclassification--the Employee Misclassification Prevention Act (EMPA) of 2011.

As Vincent Howard discussed in a previous Orange County wage and hour blog entry, employee misclassification is a raging problem in workplaces throughout the state of California and the country. In 2011, nearly 6,800 wage and hour violation lawsuits were filed, and the DOL's WHD collected over $5 million in back wages for overtime and minimum wage violations under the Fair Labor Standards Act (FLSA) that stemmed from employees being misclassified as independent contractors instead of employees.

The act of employee misclassification presents a serious problem for employees, as they are often denied access to important employee benefits and protections that they are legally entitled to, such as minimum wage payment, overtime compensation, family and medical leave, and unemployment Insurance. Misclassifying employees also poses a threat to honest employers who often struggle to be competitive against dishonest employers, who gain an unfair competitive advantage by violating FLSA laws and regulations. The DOL states that employee misclassification also creates massive losses for state workers' compensation funds and unemployment insurance, and according to the IRS, the act of employee misclassification costs the U.S. Treasury over $1 billion per year.

These state government memorandums of understanding stem from the DOL's Misclassification Initiative, which was launched under Vice President Biden's Middle Class Task Force, with the aim of detecting, preventing, and eliminating employee misclassification in workplaces across the country. This month, California joins Colorado, Connecticut, Illinois, Maryland, Utah, Hawaii, Massachusetts, Missouri, Minnesota, Montana and Washington--all states that have signed similar agreements.

Our Riverside employment attorneys, led by managing attorney Vincent Howard, represent employees who have been improperly classified in the workplace, or who have experienced violations of the Fair Labor Standards Act, or California Labor Codes violations in cities throughout Orange County, or Southern California. Contact Howard Law, PC today, for a complimentary consultation about your wage and hour rights.

US Labor Department, California sign agreement to reduce misclassification of employees as independent contractors, U.S. Department of Labor Press Release, February 9, 2012

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

Related Blog Posts:

Temp Agency to Pay Nearly $250K for Wage and Hour Violations, Employee Misclassification, California Employment Lawyers Blog, February 15, 2012

DOL Continues Long Island Wage and Hour Enforcement Initiative to Stop FLSA Violations, California Employment Lawyers Blog, December 3, 2011

EMPA of 2011 Aims to Stop Employee Misclassification, Invigorate National Economy, California Employment Lawyers Blog, October 26, 2011

California Representative Lynn Woosley Re-introduces Employee Misclassification Prevention Act, California Employment Lawyers Blog, October 24, 2011

CA Governor Jerry Brown Approves Bill to Increase Willful Employee Misclassification Penalties, California Employment Lawyers Blog, October 21, 2011

DOL and IRS Combine Forces to Combat Employee Misclassification, California Employment Lawyers Blog, September 26, 2011

DOL Continues to Track Down Federal Wage and Hour Law Violations in the Workplace, California Employment Lawyers Blog, September 8, 2011

New Act to Combat Employee Misclassification and Payroll Fraud, California Employment Lawyers Blog, May 4, 2011

Senator Harkin Introduces Payroll Fraud Prevention Act in Congress, California Employment Lawyers Blog, April 28, 2011

"White Collar" Exemptions under the FLSA , California Employment Lawyers Blog, November 12, 2010

NY Governor Signs Employee Misclassification Act into Law, California Employment Lawyers Blog, October 29, 2010

New State Legislation Holds Employers Accountable for Employee Misclassification, California Employment Lawyers Blog, October 25, 2010

Missouri Falls Behind Other U.S. States in Identifying Employee Misclassification, California Employment Lawyers Blog, October 13, 2010

Senator Harkin Aims to "Level the Playing Field" to Protect Workers And Businesses from Employee Misclassification, California Employment Lawyers Blog, June 23, 2010

California Rep. Lynn Woolsey Fights Employee Misclassification with EMPA, California Employment Lawyers Blog, May 27, 2010

Hablamos español. Llámenos ahora al 888-983-3285. Para ver nuestro sitio web en español, haga clic aquí