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California Signs Misclassification Agreement

February 10 2012

California became the 12th state to sign a memorandum of understanding with the U.S. Department of Labor to work together to root out misclassification of independent contractors.

“California is proud to enter into this partnership with the U.S. Department of Labor to work together to attack the problems of the underground economy,” said California Labor Commissioner Julie Su. “Gov. Brown just signed an important law that went into effect on Jan. 1, increasing penalties for willful misclassification. With the Labor Department, we are poised to use all the tools in our arsenal to lift the floor for hardworking employers and employees throughout the state.”

Other states with similar memorandums of understanding include Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington.

The Department of Labor collected more than $5 million in back wages in 2011 for minimum wage and overtime violations that resulted from employees being misclassified as independent contractors or otherwise not treated as employees.

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