The California Agricultural Labor Relations Board issued civil penalties in a decision that could have substantial impact on the Golden State’s agriculture industry and increase the stakes for employers that misclassify employees and independent contractors. The July 28 decision marks the first time the ALRB has assessed penalties for willful misclassification of farmworkers as independent contractors.

This case involves an employer, Cinagro Farms Inc., that admittedly misclassified its workers as independent contractors and instructed its bookkeeper to treat them as “vendors.” A crew of workers complained about not receiving proper paystubs with their weekly paychecks for tax purposes, proof of medical insurance, or proof of Medi-Cal eligibility for their children. The ALRB held that the Ventura County, California-based vegetable grower unlawfully terminated the crew in retaliation for their complaints that their paystubs did not have the legally required employee deductions in formation, which was a result of willfully misclassifying them.

In the decision, the board ruled that misclassification of workers may constitute a standalone unfair labor practice in violation of Labor Code section 1153(a), declining to apply a National Labor Relations Board decision that misclassification alone does not violate the federal National Labor Relations Act.

The ruling also recognized an exception to the general rule that the protections of the Agricultural Labor Relations Act do not extend to supervisors. The board established that prospectively, the protections of the act extend to supervisors in instances when the supervisor serves as a conduit for employee complaints regarding misclassification.

The agricultural industry and farm labor contractors should “take notice” of the decision, Ana Padilla, executive director of the UC Merced Community and Labor Center, told The Fresno Bee. The decision sets “a very important, and I would even say, profound, precedent around the issue of misclassification in the ag industry,” Padilla said during an interview with the newspaper.

The ALRB deployed a powerful weapon in its arsenal for the very first time — and created another pathway for supervisors to also recover for certain workplace wrongdoings, according to a JD Supra blog post by Heather Domingo and Rebecca Hause-Schultz of law firm Fisher Phillips.

“Though the statute for authorizing penalties for willful misclassification has been around since 2012, the board actually issued those civil penalties to an agricultural employer for willful misclassification of its crew members for the first time, demonstrating once again the serious consequences of worker misclassification,” the blog stated.

The board, which is the agency established to enforce California’s Agricultural Labor Relations Act of 1975, held that it was “not only authorized, but obligated” to issue the penalties even though neither the charging party nor the administrative law judge included an assessment for those penalties in the initial charge or order.