Both the state and federal governments have been cracking down on independent contractor status. They call it “misclassification” of employees as independent contractors. In their eyes all workers are employees; none are “independent contractors.” Essentially any worker who performs work for your business and who doesn’t clearly have their own separate business will be considered your employee.
In 2012, California made it a crime for someone to “willfully” misclassify a worker as an independent contractor (Labor Code section 226.8). California also made it a crime for anyone other than a lawyer to advise an employer to treat a worker as an independent contractor to avoid employee status (Labor Code section 2753).
Both the employer and the person who advised the employer are “jointly and severally” liable if the worker is found not to be an independent contractor. This means both the employer and the advisor can be held liable for the misclassification. The stakes for “misclassification” issues are high.