AB 939

Under current law, an employer engaged in the construction of roads, bridges,

highways, sewers, water mains, utilities, public buildings, factories, housing, or

similar construction projects (employer) who misclassifies an employee as a

nonemployee willfully and with intent to evade any requirements of the laws relating

to worker's compensation or unemployment insurance is subject to a $25,000 fine for

each violation.

This bill requires the Department of Workforce Development (DWD), for

purposes of promoting and achieving compliance by employers with certain

employment laws through the proper classification of persons performing services

for an employer as employees and nonemployees, to do all of the following:

1. Educate employers, employees, nonemployees, and the public about the

proper classification of persons performing services for an employer as employees

and nonemployees.

2. Refer complaints of misclassification of employees as nonemployees to other

state or local agencies that administer laws whose enforcement depends on the

proper classification of employees and cooperate with those state or local agencies in

the investigation and enforcement of those laws.

The bill also permits DWD, for purposes of ensuring that an employer is

properly classifying the persons performing services for the employer as employees

and nonemployees, to investigate allegations that an employer is in violation of

certain requirements under the employment laws. Those requirements

(employment law requirements) are as follows:

1. That the employer is maintaining records identifying all persons performing

work for the employer, including the name, address, and social security number of

each of those persons.

2. That the employer is maintaining worker's compensation coverage for its

employees as required under the worker's compensation law.

3. That the employer has provided to DWD the information that employers are

required to provide with respect to newly hired employees.

4. That the employer is maintaining records of the hours worked by its

employees, the wages paid to those employees, any deductions from those wages, and

any other information that the employer is required to keep under rules promulgated

by DWD relating to hours of labor and the minimum wage, and is listing deductions

from wages as required under current law.

5. That the employer is in compliance with the unemployment insurance laws.

If DWD determines that an employer has failed to demonstrate compliance

with the employment law requirements, DWD may serve on the employer a notice

of DWD's intent to issue an order requiring the employer to stop work (stop work

order) at the locations specified in the notice. The notice must advise the employer

that the stop work order will be issued within three business days after the date of