For good or bad, the use of AI is already prevalent and its potential uses are expanding quickly, including to the workplace.  LinkedIn is currently suing a competitor, hiQ Labs, for use of information “scraped” from the social network’s site and used for AI analysis.  hiQ uses the information gleaned from LinkedIn to predict whether employee are likely to leave their jobs.  While the issue in the lawsuit is whether outside companies have the right to use information made public on social media sites and does not involve any employment work-place privacy issues, the lawsuit has disclosed how AI is currently being used and in the workplace.  AI is quickly being adopted, and its effects will have huge ramifications for employers and employees.  This Friday’s Five discusses five impacts AI will have in the employment context:

1. Predictions of whether employees are likely to leave their jobs.

The analysis being done by hiQ Labs is a prime example of information that would be highly relevant to employers, employer’s competitors, recruiters and others.  As the Wall Street Journal article notes:

Among its services, hiQ monitors and analyzes LinkedIn profile pages to see who is polishing their résumés and liable to be poached, assigning so-called flight-risk scores to individual employees.

LinkedIn’s primary argument in suing hiQ to stops its “scraping” of LinkedIn’s information is that if LinkedIn users understood that their data was being gathered and used in this manner that they would be reluctant to share information and update their profiles.  This illustrates that there is value in the information being shared on LinkedIn when AI can analyze user’s data.  Regardless of which company has access to it, the fact that LinkedIn is suing over who has access to this data establishes how valuable the data is.  Employers are likely to begin using this data to evaluate their workforce in the near future, if it is not already occurring.

2. Set pay and performance standards.

One positive use of AI in the workplace could be as an aid to highlight good performers in a company and remind the managers to provide positive feedback or raises to high performing employees to increase employee retention.  Another potential use is analyzing data to set pay scales commensurate with the market for a particular locale or skill set.

3. Predictions of potential litigation.

Just as AI has been used to predict future mechanical failures of engines or other devices based on data history and monitoring the device, AI will likely be used to highlight employees who may pose a litigation risk.  Just as hiQ sets flight-risk scores, it is conceivable to set litigation-risk scores based on data.  Not commenting on whether this is appropriate (or legal) to do, the reality is that AI can and will be used for this analysis.

4. Help evaluate candidates interviewing for a job.

AI will likely be used in helping companies evaluate candidates for a job.  AI could evaluate education, experience, and other data obtained through the internet to predict an employee’s likely fit with the company as well as skill set.  There are laws already in place about employer’s use of certain public information, such as credit history and criminal backgrounds that must be excluded from such analysis, employers would have to approach this type of analysis cautiously to ensure compliance with existing laws.

5. Will there be a backlash for use of AI in the employment context, and will it be regulated?

Employers are already regulated on how they can use background information about candidates and employees under the Fair Credit Reporting Act (FCRA) and California’s Investigative Consumer Reporting Agencies Act (ICRAA).  Similarly, AI is using background information known about a person and comparing that data to a wide data set to glean likely future outcomes.  There could be a case made that just as the FCRA and ICRRA create obligations to provide notice to employees about the background information that an employer is relying upon to make an employment decision for the employee to correct any mistakes in that information, employees should be able to see the data being relied upon in the AI analysis.  However, given that AI can gather and process a huge amount of data, it might be impossible to review all of the data.  Moreover, the data relied upon by AI about the employee’s background may be very accurate, but the algorithms relied upon by the AI might weight information in a way that does not result in accurate predictions.  Don’t forget, AI predictions are just that – predictions.  Nevertheless, employers are always looking for a small advantage over competitors, and AI may be one additional tool to do this.  However, like many other areas of technology, the legal system is slow to adopt to technical advancements.  AI in the workplace exists and is being used, employers and the legal system needs to start considering it ethical and legal parameters.

Fingerprint scans, facial recognition, and retinal scans only a few years ago sounded like farfetched futuristic technology, but given the quickly advancing technology, these items are being used more and more in the workplace.  Today’s Friday’s Five discussed five items California employers should know about their legal obligations regarding the employee’s biometric information obtained during employment:

1. California Labor Code section 1051 – prohibition on employers from sharing biometric information with third parties.

This little known Labor Code section prohibits California employers of obtaining fingerprints or photographs from employees and then sharing this information to a third party.  Violation of the section is a misdemeanor.  Therefore, employers are not prohibited from collecting fingerprint information from employees, but are restricted from sharing this information with an outside third party.

2. Biometrics in timekeeping systems.

While there is no prohibition in using biometrics such as finger prints or hand prints in time keeping systems to verify an employees’ identity, employers must use caution in implementing these types of systems.  As discussed above, Labor Code section 1051 prohibits employers from sharing this information with a third party.  Therefore employers must take steps to ensure the vendor providing the technology does not have access to the biometric information.  Moreover, employers that obtain this information must be careful to protect the information from inadvertent disclosures to third parties.  Disclosures from from being hacked or unintentional inadvertent disclosure by the employer would likely be actionable under Labor Code section 1051 and California’s constitutional right to privacy.

3. Cost of photographs for employment must be paid for by employer.

Labor Code section 401 prohibits employers from requiring employees to submit a photograph from an applicant or an employee without paying for the cost of the photograph.  Obviously employers cannot discriminate against applicants based on race, gender, age, or other protected categories, but just as this information could be learned from a photograph, it would likewise be learned by the employer during a face-to-face interview.  Therefore, other than having to pay for the costs of the photograph, employers may ask for or take photographs during the hiring process as long as all prohibitions against discrimination are likewise followed.

4. Use of photographs of employees.

California Civil Code Section 3344, prohibits the use of a person’s “name, voice, signature, photograph, or likeness” in advertising or selling a product without the person’s prior consent.  Penalties under this section are the greater of $750 or actual damages suffered by the person as a result of each unauthorized use, any profits that are attributable to each unauthorized use, and attorneys’ fees and costs.  Punitive damages are also available to the prevailing party.  Therefore, employers who use the employee’s likeness in any advertising materials should consider obtaining written consent from employees to use their likeness in any marketing or advertising literature.

5. Employers must be careful to comply with other states’ biometric laws.

Facebook, Google and other technology companies are quickly learning about the intricacies of Illinois’ Biometric Information Privacy Act (BIPA).  The companies have been subject to litigation for alleged violation of the Illinois’ law on the grounds that Facebook and other tech companies’ using facial recognition in pictures stored to its software do not comply with the notice and consent requirements of the BIPA.  The law, passed in 2008, requires anyone gathering biometric information to provide certain notifications to the person whose data is being collected, and written permission to collect the information.  Facebook, for example, has asked for the case to be dismissed since its terms of service establishes that California law applies to any dispute.  Therefore, Facebook is arguing that because California does not have a similar law to Illinois’ BIPA, the case should be dismissed.  So far, that argument has not been successful and the case is proceeding against Facebook.  Employers operating in multiple states should pay careful attention to state statutes to ensure they are compliant with any applicable laws.  It is also likely that more and more states will enact similar laws to Illinois’ BIPA in the near future given the quickly advancing technology.

Photo: Toshiyuki IMAI

A lot was happening this week in California’s employment law.  This week’s Friday’s Five is a round-up on the highlights:

1.       Los Angeles City Council votes to require employers to provide 6 days of paid sick leave.

The LA City Council approved a measure to require employers to provide employees up to six paid sick days per year.  This is double the requirement under California state law that went into effect July 1, 2015.  It is likely that the law will go into effect July 2016.  The rules do not apply to small businesses with 25 employees or less until July 2017.  The law still must be drafted by the city attorneys.

2.       Uber settles class action cases for $100 million.

The settlement was reached this week by Uber to settle two class actions, one pending in California and the other in Massachusetts.  The class actions alleged that Uber improperly classified drivers as independent contractors rather than employees, and was seeking damages resulting from the misclassification.  The settlement provides $84 million to be distributed to the drivers “in California and Massachusetts who have used the Uber App at any time since August 16, 2009” until the court approves the settlement agreement.  The settlement resolves these cases, but Uber will likely have to continually fight this issue.  For more on the factors a court would look to in determining if an independent contractor has been misclassified, see my previous articles here.

 

 

3.       “Restrictive” Scheduling bill is working its way through California’s legislature.

Senate Bill 878 proposes to require retail establishments, grocery stores, and restaurants to set employees schedules 28 days in advance, and impose penalties on the employer if the schedule is modified by the employer.  In addition to the “modification pay” the employer would be required to pay to the employee, if the employer does not comply with the proposed law, the bill also adds a $4,000 penalty for failing to accurately provide “modification pay”, another $4,000 penalty for any harm that results to the employee or “another person” due to a violation of the law, and the ability for the employee to bring suit under the Private Attorney Generals Act (PAGA), among other penalties.

4.       California HR consulting company cited for $1 million for misclassification of exempt employees.

TriNet Human Resources Corp. provides outsource human resources solutions for small and medium sized business, was cited by the U.S. Department of Labor for failing to pay time and a half to 267 employees who worked more than 40 hours per week.  The case shows how often times the test to determine if an employee is exempt or nonexempt is not black or white.  If an HR company can get into legal trouble over the issue, it shows that employers must approach the exempt classification of employees very carefully.

5.       Reminder that California regulations may require an update to sexual harassment policies.

As I’ve written about previously, new regulations issued by California’s Fair Employment and Housing Counsel set for additional steps employers should consider in regards to their discrimination, harassment, and retaliation policies.   These regulations are effective April 1, 2016.

If you know Garyvee, you may be asking yourself how could an employment law blog rely upon advice from someone who has not only admitted, but takes pride in, the fact that he checked out of school in the third grade, does not read books, and uses language that makes most standup comedian’s performances seem tame?  However, to underestimate Gary is a huge mistake, and he brings a refreshing and realistic view of the workplace as it exists in 2016, that many companies could learn some important lessons from.

Gary is an entrepreneur who has a noted career in growing his family wine business from $3M to a $60M business in five years.  After that, he started Vayner Media, a digital marketing company, that now employees over 600 employees.  His is also an angel investor and venture capitalist.  I’ve recently listened to the audio version of his new book, The #AskGaryVee Book, twice in the last couple of weeks.  In listening to the book, I realized that his perspective on the workplace is the modern perspective that I’ve often advocated for on this blog.

For today’s Friday’s Five, here are five lessons from The #AskGaryVee Show (Gary’s Youtube channel) that employers must understand:

1)      Where are the best place to hire employees these days?

Search key terms on twitter search and do the homework.  Do the work.  Search terms about the items the employee would be doing, going to the person’s home page, and then email them asking if they are looking for a job.  It takes time, but you have to put in the work.

 

2)      How do you handle “Eeyore” employees?  The one that always sound like they’re whining and pessimistic.

Fire them.  Energy is very important, and dragging down the team is bad.  Not having the smarts is better than being a downer on the team.  It is pretty easy to see who is enthusiastic about their work.  Also, it is incredible how a small group of employees can affect the company.  Managers have to be careful not to confuse this with being an introvert.  Being introverted is something that needs to be recognized, and not looked down upon.  Moping is different than being quiet and introverted, and being introverted is not necessarily a bad quality to have.

 

3)      On your team, is it better to have employees that specialize in one thing or someone who can wear multiple hats?

Both work, but Gary is a fan of a jack of all trades.  He hates when people use the excuse that they are great at one thing to stop from getting better at another thing.

 

4)      Would you support Vayner employees writing their own books and curating their own content streams/personal brands?

Yes.  You cannot say you want to build around the employees, and then suppress them.  Leaders have to believe so much in themselves that they are not afraid to help employees grow.

 

5)      As a guy who loves hustle and people, what is the “unforgivable sin” one of your employees could make?

Gary is not worried about people’s work ethic.  While hustle may be the leader’s skill, and being able to work long hours, it does not have to be the skill of employees.  The only sin is to not figuring out a way to play nice with the boys and girls they work with.  Being disrespectful or being selfish is completely unacceptable, as is creating conflict.

Today’s Friday’s Five focuses on five aspects of responding to employee’s complaints made on social media.  Yelp has been in the news recently (Another ex-Yelp worker is calling the company out after being fired, CNNMoney; Yelp’s Tweet About Fired Employee Could Spell Legal Trouble, Inc.com [I was quoted in this article]), for how it responded to two former employees’ complaints on social media about the company.  The incident is a great learning opportunity for employers.  Employers need to understand that this is the new reality, employees feel that they need to voice their concerns very publicly on social media, and these complaints can spread quickly.  Employers also need to plan ahead and have a system and policies in place before they are confronted with this type of situation so their response can protect the company without creating legal liability.  Here are five lessons for employers about responding to employee’s complaints on social media:

Gary Vaynerchuk discusses how he uses social media to engage with his 500 or so employees and addresses the risks on The Ask Gary Vee Show, episode 176 (video below).   Gary made his career using social media, and continues to do so in running his digital media company, Vayner Media.  So it does not come as much of a surprise that he embraces using social media to engage with employees.  He is correct in his position that “intent trumps everything.”  He means that if employers have a good intent in engaging employees via social media, there will be less risk of litigation from its use.  Gary is also correct in his position that employees can make up anything or sue on anything, and if being afraid of litigation is the standard about whether to engage in certain conduct, employers would have a very difficult time running a business.  Gary notes also that employees are happy when he engages with them on social media, but he notes he does engage with respect, and does not want to make anyone uncomfortable.

I generally agree with Gary’s position, and employers should feel free to engage employees on social mediation as long as they understand the general rules of employee privacy issues that arise (and as noted below, this is nothing new with the development of social media).

California’s right to privacy

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. A person’s privacy expectation in their social media posts is very low since it is posted for the general public. But one could argue that off-work conduct (which includes social media activity) is part of the employee’s privacy right recognized in the California Constitution.

Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

Indeed, employees have successfully alleged claims that an employer’s use of off-work conduct was used in making an employment decision that violated the employee’s privacy.  For example, in Rulon-Miller v. IBM Corp. (1984) an IBM employee was terminated for an alleged conflict of interest due to her dating a manager of an IBM competitor.  IBM warned the employee to stop dating the manager of the competition, and when she protested IBM terminated her employment.  The court found that IBM violated the employee’s right to privacy in terminating her employment due to off-work conduct, and the jury awarded her $300,000.

Unreasonable intrusion into an individual’s private affairs

There is also a potential for employees to argue that it is intrusion into their private affairs.  To be unlawful conduct in California, an intrusion into someone’s privacy must be an unreasonable intrusion into one’s seclusion or private affairs that is highly offensive to a reasonable person.  A plaintiff can state a cause of action when their privacy is invaded in an offensive manner without consent, and it does not matter if the information was disclosed after the invasion.  See Shulman v. Group W Prods. Inc. (1998).  However, because an employer is following an employee’s posts on social media, it would be very difficult for an employee to establish that such an invasion occurred because the employee is posting the information publically.

So can employers use social media to follow and communicate with employees?

There is nothing illegal about employers or supervisors from following employees on social media.  The information posted by the employees is publically shared, so it would be very difficult for employees to state that the employer somehow intruded upon their privacy by following or commenting about the information posted by the employee.  However, employees do have a privacy interest in their off-work conduct and as established by the IBM case above, and employers must be careful in making employment decisions based on this information.  So is social media off limits to supervisors or companies?  No necessarily so as Gary states.  Indeed, the IBM case above was decided in 1984, well before social media existed.  Employers, managers, and supervisors always had to manage this risk – even before social media.  Therefore, it is not per se illegal that companies follow and engage their employees on social media, as many companies are probably feeling to pressure to do so as this is becoming the standard way many people communicate.  As Gary discusses, the fact that a company is engaging its employees on social media can be a huge employee morale boost, and a way to establish that the company cares about employees and is communicating with them on a less formal basis.  Companies should approach the sensitivity of the information and privacy of employees just as they would have prior to the invention of social media.

With more employers moving to digital personnel files, there is some concern about whether certain documents can be stored electronically or if the original document is necessary.  Generally, with the passage of the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) by most states, e-signatures are given the same force and validity as traditional “wet” signatures.

Given the strict rules employers must comply with in completing and maintaining the Forms I-9 for employees, can employers implement an e-signature solution for the I-9 and can the I-9 be stored electronically?

The U.S. Citizenship and Immigration Services provides that employers can implement electronic signatures on the Form I-9:

Q.  How can I add an electronic signature field to Form I-9?

A.  The Form I-9 posted to the USCIS website does not currently have an electronic signature function and must remain locked to ensure its integrity. Employers who wish to implement an electronic Form I-9 with an electronic signature function may re-create a Form I-9 that includes such a function, as long as the form looks the same and contains all the data elements and language as the Form I-9 posted to the USCIS website. See 8 CFR 274a.2 (a)(2). The electronic Form I-9, which includes any electronic signature function an employer implements, and the system used to generate and store it must comply with regulations found at 8 CFR 274a.2 (e)-(i). See pages 23-26 of the Handbook for Employers: Instructions for Completing Form I-9 for more information.

In addition, employers may store the Forms I-9 electronically if certain requirements are met:

Employers may use a paper system, an electronic system or a combination of paper and electronic systems to store Forms I-9. An electronic storage system must:

Include controls to ensure the integrity, accuracy and reliability of the electronic storage system.

Include controls to detect and prevent the unauthorized or accidental creation of, addition to, alteration of, deletion of or deterioration of an electronically stored Form I-9, including the electronic signature, if used.

Include controls to ensure an audit trail so that any alteration or change to the form since its creation is electronically stored and can be accessed by an appropriate government agency inspecting the forms.

Include an inspection and quality assurance program that regularly evaluates the electronic generation or storage system, and includes periodic checks of electronically stored Forms I-9, including the electronic signature, if used.

Include a detailed index of all data so that any particular record can be accessed immediately.Produce a high degree of legibility and readability when displayed on a video display terminal or reproduced on paper.

This week, a federal court in northern California certified portions of a class action Picture - driverbrought by Uber drivers who worked in California since 2009 (click here for the decision [PDF]).  Over 160,000 drivers have worked for Uber in California during this time period, and while the case is making a lot of news, what are the key issues employers should understand about the ruling?  Here are five takeaways for employers from the decision:

1.     Employers must understand the class action procedure

Employers with more than 30 or so employees should understand what a class action is, and the procedural issues of a class action.  It is important to understand that while the court certified certain portions of the plaintiffs’ case (and refused to certify others), this does not mean that Uber has lost the case.  Class certification is not a ruling on the merits of the case, but only whether the case is one that there a sufficient similarities between all of the class members’ claims that enable to court to decide the matter on a class wide basis.  The court explained:

The merits of the case are not currently at issue. Rather, the Court needs to consider only two questions at this juncture; whether the case can properly proceed as a class action, and, if so, how. While answering both of those questions necessarily requires the Court to perform a rigorous analysis of a number of legal issues, the parties correctly recognize that one threshold issue is of paramount importance to the success or failure of Plaintiffs’ class certification motion: as to whether drivers are Uber’s employees or independent contractors under California’s common-law test of employment, will “questions of law or fact common to class members predominate over any questions affecting only individual members” of the proposed class?

….

That is, are the drivers’ working relationships with Uber sufficiently similar so that a jury can resolve the Plaintiffs’ legal claims all at once? This question is of cardinal importance because if the Plaintiffs’ worker classification cannot be adjudicated on a classwide basis, then it necessarily follows that Plaintiffs’ actual substantive claims for expense reimbursement and conversion of gratuities cannot be adjudicated on a classwide basis either.

The court ruled in plaintiffs favor in certifying the class action because Uber treated all of the drivers the same:

As other courts weighing certification of employment misclassification claims have recognized, however, there is inherent tension between this argument and Uber’s position on the merits: on one hand, Uber argues that it has properly classified every single driver as an independent contractor; on the other, Uber argues that individual issues with respect to each driver’s “unique” relationship with Uber so predominate that this Court (unlike, apparently, Uber itself) cannot make a classwide determination of its drivers’ proper job classification.

Uber also made the argument that the class should not be certified because many drivers did not support the lawsuit, as demonstrated in 400 declarations it offered from the drivers.  The court noted that class member’s opposition to the class action does not necessarily bar class certification.  The court explained that it “must be mindful” of the fact that “‘the protections conferred by [these laws] have a public purpose beyond the private interests of the workers themselves.’”  In addition, the court explained that if class members do not agree with the class action, they are free to opt-out of the class action.

2.     The Borello test determines if workers are properly classified as independent contractors

The “most significant consideration” is the putative employer’s “right to control work details.”  S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations (Borello), 48 Cal. 3d 341, 350 (1989).  Recently, the California Supreme Court noted that under the right-of-control test, it is “not how much control a hirer [actually] exercises, but how much control the hirer retains the right to exercise.” Ayala, 59 Cal. 4th at 533.

The second set of factors that the court will look at under the Borello test are as follows:

a) whether the one performing services is engaged in a distinct occupation or business;

(b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;

(c) the skill required in the particular occupation;

(d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;

(e) the length of time for which the services are to be performed;

(f) the method of payment, whether by the time or by the job;

(g) whether or not the work is a part of the regular business of the principal; and

(h) whether or not the parties believe they are creating the relationship of employer-employee.

Finally, the Borello test has five additional factors borrowed from the Fair Labor Standards Act (FLSA) in making a determination of a worker’s classification:

(i) the alleged employee’s opportunity for profit or loss depending on his managerial skill;

(j) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers;

(k) whether the service rendered requires a special skill;

(l) the degree of permanence of the working relationship; and

(m) whether the service rendered is an integral part of the alleged employer’s business.

The court analyzed these factors and held that a class action was appropriate in this case “because all (or nearly all) of the individual elements of the Borello test themselves raise common questions which will have common answers.”

3.     It is the employer’s burden to prove the workers are independent contractors, so proceed with caution

The court noted that because Uber drivers “’render service to Uber,’ they are presumptively employees as a matter of law.  Thus, the Plaintiffs have proved their prima facie case, although the ultimate question of their employment status will need to be decided by a jury.  Therefore, the burden will be on Uber at trial to ‘disprove an employment relationship.’”

4.     Understand obligations to reimburse employees for work related expenses

The plaintiffs were also seeking to certify a class of drivers who incurred business expenses and were seeking reimbursement for these expenses under Labor Code section 2802.  While plaintiffs were not entirely clear on what items they were seeking reimbursement for, the court concluded that it appeared the main reimbursement items were for vehicle operating expenses, such as gas, maintenance, and wear and tear.  Plaintiffs, therefore, waived reimbursement claims for other items such as water, gum, and mints for passengers, and clothing costs.  I’ve written previously about employer’s obligations to reimburse drivers for mileage here.

The court noted that these reimbursement claims “can sometimes be problematic to certify as class actions because ‘there may be substantial variance as to what kind of expenses were even incurred by [the workers] in the first place” and “it may be challenging to determine on a classwide basis whether a particular expense (or type of expense) was ‘necessary’ or incurred in ‘direct consequence’ of the employee’s duties.”  The court held that it would not certify the reimbursement class at this point in time because the plaintiffs did not demonstrate that by dropping the reimbursement claims in addition to the mileage reimbursement claim was in the best interest of the class.

5.     Businesses need to be careful about how they characterize tips or service charges to customers, and understand the difference

Plaintiffs also assert that because the drivers should have been classified as employees, Uber violated Labor Code section 351, which precludes employers from taking employee’s tips.  The court granted plaintiffs’ motion for class certification on this issue based on Plaintiffs’ evidence that Uber informed its customers in advertisements that a tip for the driver was included in the cost of the fares (“When the ride is over, Uber will automatically charge your credit card on file.  No cash is necessary.  Please thank your driver, but tip is already included”; “All Uber fares include the tip….”)  Employers must be mindful about how they characterize tips and service charges, and must understand the difference between the two under the law.

Earlier this week Uber appealed a California Labor Commissioner ruling against it holding that a driver was misclassified as an independent contractor.  In this video, I briefly discuss the ruling and the lesson it holds for employers.

Misclassification of employees as independent contractors can carry many damages and penalties.  For example, Sections 226.8 and 2753 of the Labor Code impose a civil penalty of $5,000 to $25,000 depending on whether the misclassification is willful.  In addition, the misclassified worker can recover back unpaid overtime wages, unpaid minimum wages, and expense reimbursement.  Therefore, employers need to be extremely cautious in classifying workers as independent contractors.

For more information about the factors that differentiate an employee from an independent contractor click here.

The Labor Commissioner’s can be viewed here: