New employment laws that went into effect on January 1 will impact California startups and small businesses. One of the new laws that businesses won’t want to ignore is SB 459, which imposes heavy penalties of between $5,000 and $25,000 for the “willful misclassification” of employees as independent contractors. The law is designed to crack down on the common employer practice of classifying employees as independent contractors (which have much fewer tax and legal requirements), and reflects the trend towards increased scrutiny of worker classification.
Other laws that went into effect expand health benefits for women on pregnancy disability leave, prohibit some employers from doing credit checks on certain workers or job applicants, and increase disclosure requirements for employers hiring non-exempt workers.
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