SB 459 became law January 1, 2012. The bill mandates that any person (manager or management company for example when advising their HOA client) who, for compensation, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status shall be jointly and severally liable with the employer if the individual is not found to be an independent contractor.
It adds Sections 226.8 and 2753 to the Labor Code which prohibits willful misclassification of individuals as independent contractors. It prohibits charging individuals who have been mischaracterized as independent contractors a fee or making deductions from compensation where those acts would have violated the law if the individuals had not been mischaracterized. The bill authorizes the Labor and Workforce Development Agency (LWDA) to assess specified civil penalties from, and take other specified disciplinary actions against, persons or employers violating these prohibitions. This new legislation authorizes the Labor Commissioner to issue determinations that a person or employer has violated these prohibitions with regard to an individual filing a complaint, and to assess civil and liquidated damages against a person or employer based on a determination that the person or employer has violated these provisions.