February 21, 2025 | Sacramento, CA — MedLegalNews.com — In a landmark enforcement action highlighting caregiver misclassification in California, the Labor Commissioner’s Office (LCO) has fined Amity In-Home Care Services over $2.3 million for illegally misclassifying caregivers as independent contractors. This case marks the first citation issued under Assembly Bill 594, a law designed to strengthen penalties for worker misclassification.
Previously, penalties for such violations were payable only to the state. However, under Labor Code Section 181, the state can now directly compensate affected workers with these collected fines. This shift ensures that employees who were wrongly classified receive the wages and protections they were unlawfully denied.
Labor Commissioner: Employers Must Be Held Accountable
California Labor Commissioner Lilia García-Brower condemned the violation, stating:
“Misclassifying workers is not a simple paperwork error. It is a deliberate violation of the law that denies employees earned wages, protections, and benefits they are legally owed. My office is committed to holding employers accountable and ensuring all workers, especially caregivers, receive the pay they deserve.”
Investigation Uncovers Widespread Violations
The LCO launched an investigation after receiving a caregiver misclassification referral from Bet Tzedek Legal Services in April 2023. In response, officials conducted a worksite inspection, which revealed numerous labor law violations, including:
- Failure to pay overtime wages, leaving workers uncompensated for extra hours.
- Lack of workers’ compensation insurance, putting employees at financial risk if injured.
- Failure to provide accurate wage statements, making it difficult for workers to track their earnings.
Due to the severity of these infractions, the LCO issued an immediate Stop Order Penalty Assessment, effectively halting Amity In-Home Care Services’ operations until it complied with labor laws.
Breakdown of Financial Penalties
Total Penalty: $2,327,257, which includes:
- $422,033 in unpaid minimum wages*
- $424,809 in unpaid overtime wages*
- $165,162 in meal and rest period premiums*
- $550,000 for willful worker misclassification
- $81,673 for failing to provide workers’ compensation insurance
- $422,033 in liquidated damages
- $108,094 in waiting time penalties
- $27,400 in wage statement violations
- $18,950 in additional civil penalties
(*Amounts include interest payable to misclassified employees.)
Worker Misclassification: A Costly and Illegal Practice
Caregiver misclassification occurs when employers label caregivers as independent contractors to avoid legal obligations such as paying overtime and providing essential worker protections. This practice, classified as wage theft, deprives workers of crucial rights and benefits. Specifically, misclassified employees lose access to:
- Health and safety protections, increasing their risk of workplace injuries.
- Overtime pay and meal breaks, leading to financial instability.
- Unemployment benefits, leaving them vulnerable in case of job loss.
- Family leave rights, preventing them from taking time off for personal or medical needs.
By misclassifying workers, employers gain an unfair competitive advantage while leaving employees exposed to financial and legal hardships.
What Workers Can Do If Misclassified
Employees who suspect they have been misclassified or denied fair wages should take action. They can file a wage claim with the California Labor Commissioner’s Office to recover lost earnings and secure the benefits they are legally entitled to.
🔗 Source: California Labor Commissioner’s Office.
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FAQs: About the Caregiver Misclassification
What does caregiver misclassification mean?
Caregiver misclassification occurs when employers label caregivers as independent contractors instead of employees to avoid paying overtime, benefits, and other worker protections.
How did Amity In-Home Care violate California’s worker laws?
Amity In-Home Care misclassified caregivers, failed to pay overtime and provide workers’ compensation insurance, and was fined $2.3 million under California’s new labor enforcement law.
What are the penalties for caregiver misclassification in California?
Penalties for caregiver misclassification can include unpaid wages, overtime, waiting time penalties, and civil fines — as seen in the $2.3 million fine against Amity In-Home Care.
What should caregivers do if they suspect misclassification?
Caregivers who believe they are misclassified can file a wage claim with the California Labor Commissioner’s Office to recover unpaid wages and obtain legal protection under state law.