CSLB Law & Business ExamEmployment RequirementsHard
The Labor Commissioner finds that a contractor willfully misclassified several employees as independent contractors, with no prior pattern of such conduct. Under California Labor Code Section 226.8, what is the civil penalty range per violation?
- A$25,000 to $50,000 per violation
- B$5,000 to $15,000 per violation
- C$1,000 to $5,000 per violation
- D$500 to $1,000 per violation
Show answer & explanationAnswer & explanation
Correct answer: B. $5,000 to $15,000 per violation
Labor Code Section 226.8 imposes civil penalties of $5,000 to $15,000 per violation for willful misclassification of employees as independent contractors. If the Labor Commissioner finds a pattern or practice of such violations, the penalty increases to $10,000 to $25,000 per violation.
Why the other options are wrong
- A. This higher range applies only to a pattern or practice of willful misclassification, not a single violation.
- C. This range does not match the statutory penalty for willful misclassification.
- D. This range is far too low for the statutory penalty under Section 226.8.
Willful Misclassification Penalty (Labor Code §226.8)
California imposes civil penalties of $5,000 to $15,000 per violation for willfully misclassifying employees as independent contractors, rising to $10,000–$25,000 for a pattern or practice.
- Applies to willful misclassification, not good-faith errors.
- Also prohibits charging misclassified workers fees or deductions they wouldn't face as employees.
- Penalties are assessed by the Labor Commissioner or a court.
Memory trick: Willful mislabeling costs five to fifteen grand a head.