What fines or penalty do employers face under the Unemployment Insurance Code for misclassifying employees?

In addition to exposure to employee’s civil lawsuit, if EDD finds that workers are misclassified as independent contractor(s) when they should be classified as employee(s), employers face significant risks related to failing to comply with their obligations under the Unemployment Insurance Code.

These risks include under-paying their taxes and having to pay their employees’ share of payroll taxes, both of which may result in incurring penalties and interest.

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