Employers Face Rising Staffing Costs Nationwide After California’s Chaotic Legislation

By | Business, Employment, Independent Contractor, Misclassification

For the last year, the advocacy group Californians for the Arts has been working to create exemption language for arts industries and educate the legislature on the common arts employment model, which is run largely on independent contractors. “In a highly creative industry, we’re really not the kind of employment models where you fit into this neat box,” said Julie Baker, Californians for the Arts’ executive director.

Converting an independent contractor to an employee typically increases staffing costs by 30%, said M.J. Bogatin, an attorney and board member of California Lawyers for the Arts. Those costs include insurance premiums, disability premiums, workers compensation, “a bunch of additional admin and the costs of now administering these people as employees.”

Those who fail to comply with the law face fines. Under AB5, if a court finds a company or small arts organization willfully violating the law, penalties may run from $5,000 to $25,000 per violation.

For arts organizations staying afloat on grants and donations, both options — paying a penalty or facing a 30% increase in costs — could be devastating. Read details here.

Despite AB5 Pause, California Team Drivers Continue “Truck-Friendly” Relocation Search

By | Business, class action lawsuit, Independent Contractor, Misclassification

Truckers are forced to relocate to survive financial hardship. Freight Waves reports below:

California natives Jeff and Elyse Fink are still planning to relocate, but say a federal judge’s pause on the new sweeping labor law, AB5, that was set to take effect in January, has given them a little more time to plan their exit strategy.

“We are continuing with our plans to sell and relocate,” Jeff Fink told FreightWaves. “We want to be in a state that is truck friendly and California has proven to be an anti-truck state.”

The Finks, who currently live in Victorville, California, are team drivers leased to Long Haul Trucking of Albertville, Minnesota. In December, the carrier notified the Finks that they were not going to be able to dispatch them with loads leaving California unless they moved out of the state. Read entire article.

Instacart Defeats Emergency Independent Contractor Reclassification Attempt in San Diego

By | Independent Contractor, Misclassification, Payroll

Read about California state court denying San Diego City Attorney Mara Elliot’s request for an emergency restraining order application to make all Instacart independent contractors employees as reported by the California Globe. Tuesday’s decision is expected to be challenged by the San Diego City Attorney’s Office again in the near future.

New Jersey Enforces $250 per Employee, Increasing to $1,000 Subsequent Violations

By | Business, Human Resources, Independent Contractor, Misclassification, Payroll

Companies that misclassify independent contractors are now subject to increased fines and penalties. Can businesses afford $250 per employee for a first violation and up to $1,000 per employee for subsequent violations? To make matters worse, misclassified employees can be paid up to 5% of the worker’s gross earnings for the past year, and when you need to lay off workers to downsize, mandatory severance pay will break the bank. These major changes are effective immediately in New Jersey, read ReedSmith’s article here.

NJ Legislation Combats Employers Who Misclassify

By | Business, class action lawsuit, Employment, Human Resources, Independent Contractor, Misclassification

Governor Phil Murphy signed a legislative package combatting worker misclassification and exploitation. The bills will crack down on employee misclassification in businesses by allowing stop-work orders against employers violating state wage, benefit, and tax law; providing assessment of penalties for violations in connection with misclassification of employees; and requiring employers to post a notice for their employees regarding employee misclassification, among others. Read about this sweeping legislation and mitigate your risks.

Nannies are Employees Not Independent Contractors

By | Advice, Employment, Independent Contractor, Misclassification

Amidst CA AB5 chaos and springing lawsuits, could your nanny sue? Yes, your nanny is a W-2 employee. Household workers include nannies, in-home senior caregivers, housekeepers, chefs, chauffeurs, estate managers, and others. Taxes are due from their employment.  Click here for AB5 Demystified, the new standard for classifying independent contractors and employees reaches across all companies and populations, not just the gig giants.