Under Labor Code §226.8, a contractor who willfully misclassifies an employee as an independent contractor faces a civil penalty of:
Explanation
Labor Code §226.8(b) sets a civil penalty of $5,000 to $15,000 for each willful misclassification, and §226.8(c) raises it to $10,000 to $25,000 per violation where the Labor Commissioner or a court finds a pattern or practice. §226.8(d)(1) adds the distinctive remedy: the violator must post a notice of the violation prominently on its public website - or, with no website, in an area of the workplace accessible to all employees and the public - for one year. (a) and (d) understate the penalty by one to two orders of magnitude. (c) treats the back wages as the whole exposure, which misses that the penalty is additional to them. A CSLB licensee also faces discipline under B&P §7110.1.
Law Reference: Labor Code §226.8(b), (c), (d)(1); Business & Professions Code §7110.1This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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