California Caregiver Misclassification Lawsuit

The California Labor Commissioner’s Office cited Hart Placement Agency Inc., along with principals Annie Ghaw and Hartmann Ghaw, for allegedly misclassifying 144 caregivers who worked in homes throughout Los Angeles County. State investigators concluded the workers should have been treated as employees under California law rather than independent contractors.

According to investigators, the alleged scheme operated from October 2022 through December 2024 and required caregivers to obtain business licenses, register fictitious business names and open business bank accounts to create the appearance that they were independent businesses. At the same time, investigators found Hart Placement allegedly controlled worker schedules, duties and compensation — key indicators of employee status under California’s strict ABC test.

The ABC test places a heavy burden on companies seeking to classify workers as independent contractors. To legally maintain contractor status, employers generally must show:

• A: the worker is free from company control,
• B: performs work outside the usual course of the hiring entity’s business
• C: operates an independently established trade or business. Home caregiving agencies frequently face scrutiny under this framework because caregiving is central to the business itself and agencies often direct assignments, schedules and rates of pay.

Home caregiving agencies frequently face scrutiny under this framework because caregiving is central to the business itself, while agencies often direct assignments, schedules and rates of pay.

The independent contractor caregivers allegedly did not receive accurate wage statements, benefits or paid sick leave despite performing the same duties as traditional employees. And they were instructed to falsify timesheets to conceal shifts extending beyond 12 or even 24 hours—without overtime pay.

Of the total $4,423,450 in citations, approximately $4.27 million is reportedly owed directly to affected workers for unpaid wages and related labor violations. The company and its principals have appealed the citations, and a hearing remains pending.

Worker Advocacy

The case highlights how aggressively California regulators continue to pursue worker misclassification claims — particularly in industries dependent on vulnerable immigrant labor and around-the-clock caregiving services.

And it underscores how worker advocacy groups play a central role in triggering labor enforcement actions. The investigation reportedly began after a referral from the Pilipino Workers Center of Southern California, which helped identify witnesses and support caregivers cooperating with investigators. Worker advocates say immigrant caregivers are particularly vulnerable to misclassification schemes because many workers are unfamiliar with labor protections or fear retaliation tied to immigration concerns or financial insecurity.

Many of the 144 caregivers were reportedly Filipino. According to US.Inquirer.net, prosecutors recently accused a California couple of forcing three undocumented Filipino caregivers to work shifts lasting up to 24 hours a day at elder care facilities in North County. Prosecutors alleged the caregivers, despite lacking proper qualifications, were required to care for more than a dozen patients on their own while performing duties including feeding, bathing and changing residents’ diapers.

Rolando “Bobby” Solancho Corpuz, 57, and Maria Elsabel Sio Corpuz, 41, pleaded not guilty to human trafficking and wage theft charges.

Misclassification Disputes

Worker misclassification remains a major issue in the home healthcare and caregiving industries. As the U.S. population ages and demand for caregivers grows, critics say the industry increasingly relies on low-paid workers performing physically and emotionally demanding jobs without the full legal protections afforded to employees.

Misclassification disputes have become a recurring enforcement priority because labeling workers as independent contractors can allow employers to avoid payroll taxes, overtime obligations, workers’ compensation coverage and other employment-related costs.

California regulators have repeatedly emphasized that simply requiring workers to sign independent contractor agreements or obtain business licenses does not determine legal classification. Courts and enforcement agencies instead focus heavily on the practical realities of the relationship, including who controls schedules, assignments, supervision and compensation.

The Hart Placement case may also signal continued scrutiny of caregiving agencies that rely on extended shifts and live-in arrangements.

For employers, the case serves as another warning that California continues to maintain some of the nation’s toughest worker-classification standards. For workers and plaintiffs’ attorneys, it demonstrates how state agencies and community organizations are increasingly collaborating to identify industries where alleged labor abuses may otherwise remain hidden behind contractor agreements.