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The Honorable Arnold Schwarzenegger Governor, State of California State Capitol Sacramento, CA 95814 Dear Governor Schwarzenegger: I request your VETO of SB 622 (Padilla), which creates a new excuse to sue employers and exposes them to excessive new penalties for "willful misclassification" of independent contractors without providing clear roadmap for employers to comply. Instead of new violation provisions, penalties and civil lawsuits, contractors, the business community, employees and employers alike would be better served by creating clear and consistent application of factors that define independent contractor. California agencies that address employee versus independent contractor status need to follow uniform and straightforward practices with regards to classification. The current variety of factors used for determining the appropriateness of contracting with an independent contractor versus hiring an employee are confusing, inconsistently applied and ambiguous, subject to a case-by-case interpretation with different conclusions reached by different state enforcement agencies. Because of these facts, it is often impossible to distinguish whether a misclassification is inadvertent or deliberate. We are concerned that without a clear and uniformly-accepted, uniformly–enforced definition of independent contractor, businesses are at risk of enormous penalties in spite of good faith actions. While it is agreed that no one should intentionally misclassify an employee as an independent contractor in order to avoid employment tax, workers’ compensation insurance, unemployment insurance, employee wage and benefit, and other legal obligations, existing federal and state laws and regulations provide government agency audit and enforcement authority, civil actions, as well as the ability to impose fines, penalties and interest to address misclassification violations. For these and other reasons, I strongly request your VETO of SB 622 (Padilla) when it comes before you for consideration.