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California Teams with DOL to Put More Bite in Overtime Pay Laws

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Sacramento, CAOvertime pay laws and employee rights continue under an intensifying spotlight in the state of California. Specifically, the propensity for employers to misclassify employees as independent contractors in an effort to avoid paying overtime and the provision of other benefits normally due a full-fledged employee. Not only is it not fair to the employee, but also to those employers playing by the rules.

That could all change with the introduction last month of a joint partnership between the US Department of Labor (DOL) and California employment officials in an effort to crack down on employers habitually violating overtime laws.

This latest partnership is an adjunct to a bill signed by California Governor Jerry Brown January 1 that increases penalties to employers found to have denied workers overtime pay otherwise their due. This is in addition to a task force the state put together to pursue employers refusing to remit payroll taxes, and skirting around the need for workers' compensation insurance.

Without insurance, workers who otherwise might qualify would be denied workers' compensation settlements.

The partnership between the state of California and the DOL was hailed as a way to strengthen California overtime law. "California is proud to enter into this partnership with the US Department of Labor to work together to attack the problems of the underground economy," said California Labor Commissioner Julie A. Su, in comments published in the Orange County Register (2/11/12).

"Governor Brown just signed an important law that went into effect on January 1st, 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."

It was revealed that federal officials had collected in excess of $5 million in back wages on behalf of minimum-wage earners and misclassified employees who otherwise would have been paid overtime according to overtime pay laws.

"The misclassification of employees as something else, such as independent contractors, presents a serious problem, as these employees often are denied access to critical benefits and protections such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance to which they are entitled," the DOL said in a statement.

"In addition, misclassification can create economic pressure for law-abiding business owners, who often struggle to compete with those who are skirting the law."

The partnership between the state of California and the US Department of Labor is an effort to put more teeth into California overtime law, and mirrors similar partnerships involving several other states, according to the published report.

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