Miles Wins Key Independent Contractor Case

Larry Miles, senior attorney with The Miles Law Firm, recently won an important decision for the California auction industry involving the question of whether auto auctioneers are employees or independent contractors.  Arguing that auto auctioneers are sufficiently unique in their skills and independent in their work to justify being deemed independent contractors,  Miles persuaded the Employment Development Department administrative law judge to reject EDD efforts to classify the auctioneers as employees of the auto auction.

The important decision comes on the heels of a new state law, SB 459, that imposes new penalties for businesses that “willfully” misclassify workers as independent contractors.  In addition to penalties of potentially $5,000 to $25,000 per infraction, the new statute requires the offending employer to announce their “willfull” misclassification on their website for a year.  The new penalties are in addition to existing taxes and penalties that are due upon a redetermination by EDD.  The state Labor and Workforce Development Agency will enforce the new law effective January 1.

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The new law raises the stakes for an innocent misclassification of a worker as an independent contractor.  Employers should consult with counsel if they have any questions regarding their current classification of any workers as an independent contractor.

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