We all know that misclassification of Independent Contractors is a problem in California. We also know that there is a lot of confusion by small business owner what constitutes an Independent Contractor and in some cases the definition by EDD and the IRS are different.
SB1490 has been introduced by Senator Padilla. What it does according to the analysis by the Senate Committee on Labor and Industrial Relations
" Requires a person employing labor in California to provide an individual hired as an independent contractor a form developed by EDD that includes 1 a notice that the individual has been hired as an independent contractor 2 the factors EDD uses to determine to determine whether a person is an employee or an independent contractor 3 a statement explaining the impact that the individual's status has on his or her tax obligations and eligibility for labor and employment protections and 4 a notice of the individual's ability to request from EDD a determination as to whether the individual is an employee or independent contractor and means by which this determination may be obtained.
Requires an employer to maintain, for not less than two years, specified records identifying all persons hired as independent contractors and to make those records available for inspection upon request of EDD, a member of the Industrial Welfare Commission, or the Department of Industrial Relations.
Grants an individual hired as an independent contractor the right to request a determination by EDD as to whether he or she is an employee or independent contractor.
Expands the application of existing civil penalty and misdemeanor provision to the compliance requirements for record keeping and access with respect to independent contractors
Gives EDD power to develop the required form, to process the request for a determination, and to take all steps reasonably necessary to carry out the duties relating to independent contractors specified in the bill."
Please let me know your thoughts on this? Do you think this is important to small business. I will be talking to the point person in Senator Padilla's today. Your views will be expressed