$4.4M Worker Misclassification Citation Issued Against California Agency

A California placement agency and its owners are facing a $4.4 million citation after investigators found they engaged in worker misclassification, treating 144 caregivers as independent contractors rather than employees.

The California Labor Commissioner’s Office cited Hart Placement Agency Inc. and its principals, Annie Ghaw and Hartmann Ghaw, $4,423,450 for the alleged violations. Of that total, $4,266,450 is owed directly to the affected workers.

The defendants have appealed, and a hearing date is pending.

Investigation Uncovered Worker Misclassification

Investigators found that from October 2022 through December 2024, Hart Placement required caregivers to obtain business licenses and file fictitious business name statements to create the appearance of independent contractor status. Meanwhile, the agency maintained control over the caregivers’ schedules, duties and compensation, investigators determined.

Moreover, caregivers were required to sign independent contractor agreements without receiving copies and were also instructed to falsify timesheets or sign documents concealing shifts exceeding 12 or 24 hours, investigators determined. Workers also did not receive accurate wage statements or paid sick leave as required under California law.

“Caregivers perform difficult, essential work in people’s homes—bathing, dressing, cleaning and caring for people who cannot care for themselves,” California Labor Commissioner Lilia García-Brower said. Many are already underpaid for this demanding work and misclassifying them compounds the injustice by denying workers the basic protections and rights they deserve.”

What Payroll Teams Should Know

California’s ABC test determines whether a worker is an employee or an independent contractor. In this case, Hart Placement allegedly failed the control prong despite requiring workers to obtain business licenses – a reminder that paperwork alone does not establish contractor status.

Wage statement and paid sick leave violations carry their own penalties under California’s Labor Code, independent of whether worker misclassification is ultimately proven.