Independent Contractor v. Employee Bill to Watch In California
Anyone who doubts that California is looking to crack down on companies that are improperly using independent contractors needs to review SB 1583, which is now being debated in the California Legislature. This bill has passed through the California Senate and is now being heard by the Assembly. The bill, if passed in its current form, would add section 2753 to the California Labor Code. The new section 2753 would provide that anybody who, for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status is jointly and severally liable with the employer if the individual is ultimately found not to be an independent contractor. The bill specifically exempts attorneys providing advice in the course of practicing law and anyone who provides advice to his or her employer.
If this bill is passed look for outside accountants and consultants who provide advice on this issue to be roped in to any lawsuits or claims by the state for back taxes or fees for mislabeling a worker as an independent contractor. We expect this bill to pass through the legislature and land on the Governor's desk. To the best of our knowledge, Governor Schwarzenegger has yet to take a position on the bill.