California Department of Industrial Relations - DIR Fraud Prevention

Misclassification

Misclassification of workers occurs when an employer improperly classifies their employees as independent contractors so that they do not have to pay payroll taxes, minimum wage or overtime, or comply with other wage and hour law requirements such as providing meal periods and rest breaks. When employees are misclassified as independent contractors, they not subject to California minimum wage and overtime protection laws. Additionally, the worker has no workers' compensation coverage if injured on the job, no right to family leave, no unemployment insurance, no legal right to organize or join a union, and no protection against employer retaliation. This is a form of fraud.


 

May 2018