A general contractor misclassifies several framers as independent contractors to avoid payroll taxes and workers' compensation. Which is a likely consequence?
Explanation
Misclassifying employees as independent contractors exposes the contractor to EDD assessments for back payroll taxes and contributions, Labor Code liability for unpaid overtime and minimum wage, and civil penalties under §226.8 of $5,000 to $15,000 per willful violation. (a) understates it: CSLB discipline under B&P §7110 is possible but is not the main exposure, and it does not displace the tax and wage liability. (c) inverts the remedy - misclassification does not extinguish the workers' claims, it is the reason they have them. (d) is the 'it's my business, I choose' belief; classification is decided by the ABC test in §2775, not by the parties.
Law Reference: Labor Code §226.8; §2775This 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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