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Recently Kevin Price, Host of the nationally syndicated Price of Business Show, interviewed Tamara Kurtzman.

The Tamara Kurtzman Commentaries

California employers face an ever-changing and dynamic regulatory landscape, with new requirements implemented frequently impacting wage laws, worker classifications, discrimination protections, freelance contracting, and workplace safety and more. This year, for example, attorneys throughout California have observed a noticeable uptick in enforcement actions by the California Employment Development Department (EDD), particularly around the classification of workers as independent contractors. Companies that have historically classified certain roles as independent contractors—especially in industries like hospitality, logistics, tech, and gig work—are now finding themselves under review by various California departments. These classification audits can potentially result in significant assessments for unpaid unemployment insurance, disability insurance, and other payroll taxes. In addition to EDD assessments, workers who have been misclassified may generally pursue private claims for unpaid overtime, missed breaks, unreimbursed expenses under the California Labor Code, and, in some cases, even civil penalties under the Private Attorneys General Act. The financial exposure for employers can be devastating, especially when claims reach back years and include attorneys’ fees and interest. What surprises many people is that even if both parties agree to an independent contractor arrangement and sign a contract expressly describing a worker as a contractor, that agreement will not determine the status of the worker for legal purposes rather, agencies and courts will look at the actual working relationship and apply various statutory tests to determine whether a worker is an employee or independent contractor. Even where a worker is truly an independent contractor, new labor laws require that freelance workers being paid $250 or more generally have written contracts with employers. Although the EDD has not confirmed the reason behind this apparent rise in audits and assessments, it is logical to assume that it could (at least partially) be driven by California’s ongoing budget shortfalls, as the state seeks to recover unpaid payroll taxes to help close the gap. Similarly, a new expanded framework for identifying and addressing workplace discrimination went into effect in January and now covers claims based on a combination of protected characteristic.  Under this new farmwork, Golden State employers may now potentially be held liable for discriminatory practices that stem from the intersection of multiple protected characteristics—even if no single characteristic would have triggered a legal violation on its own. New legislation has also expanded the definition of race discrimination (and the list of protected characteristics, generally) under the California Fair Employment and Houston Act (FEHA) to include traits associated with race, including but not limited to, hair texture and protective hairstyles.

As an experienced practicing California corporate attorney and former law professor,  Ms. Kurtzman shares her insight as to how small businesses can approach the ever-changing landscape of California’s employment and labor requirements.

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