This report examines the issue of misclassification of workers as independent contractors in the janitorial services, construction, and trucking industries in California. The practice of misclassification has been ongoing for years and is estimated to affect between 10% and 30% of audited employers. Misclassification allows employers to avoid payroll taxes, unemployment insurance, and workers' compensation payments, as well as shift operating costs and legal risks to workers. The report highlights the significant drain on government resources, with the state and federal government losing at least $3,000 per misclassified worker. The authors recommend improved coordination, outreach, and targeting to better detect and prevent misclassification.
