State complaint filed against San Jose mayoral candidate
San Jose Councilmember Matt Mahan announced his mayoral campaign in September 2021. File photo.

San Jose Councilmember Matt Mahan’s mayoral campaign is at the center of a complaint filed Friday with the state labor commissioner, three days after San José Spotlight reported potential labor law violations.

The freshman councilmember is being accused of misclassifying campaign workers as independent contractors.

A San José Spotlight investigation earlier this week revealed that Mahan’s campaign this year classified 18 campaign workers as consultants, filling roles such as volunteer coordinator, deputy field director, communication director and campaign manager. More than half are high schoolers, in college or recent grads. None own campaign consultancies or firms.

That appears to violate Assembly Bill 5, a state law approved in 2019 that requires many companies to classify workers—including campaign staff—as employees instead of independent contractors. The law is meant to crack down on employers misclassifying workers to skirt paying benefits, payroll taxes and higher wages.

A complaint filed Friday with the California Department of Labor claims Mahan’s campaign is violating AB 5 by treating workers as contractors instead of employees. The complaint came from Kevin Smith, a local prosecutor and San Jose resident.

“I implore you to conduct an investigation into these suspected labor law violations and to notify the proper authorities of these violations to prosecute the Mahan campaign for their labor law violations and to seek protection for the workers who are being exploited,” Smith wrote in the complaint obtained by this news organization. “Our politicians, candidates, and their campaigns cannot be held to different standards than businesses and must remain accountable for complying with California’s employment practices.”

Mahan is competing against Santa Clara County Supervisor Cindy Chavez to replace outgoing Mayor Sam Liccardo.

Matthew Quevedo, Mahan’s campaign manager, called the complaint a “coordinated effort” from the Chavez camp to distract from her “failed record.” He also questioned the credibility of Smith, the complainant.

“No Kevin Smith filed a complaint when Chavez was accused of lobbying the District Attorney not to prosecute a corrupt politician,” Quevedo said. “No Kevin Smith filed a complaint when Chavez diverted COVID-19 relief funds to bonuses for high-paid bureaucrats. An attorney named Kevin Smith has donated multiple times to Chavez. An attorney named Kevin Smith is head of the Santa Clara County Government Attorneys’ Association, a longtime Chavez ally. No Mahan campaign staffer has filed a complaint and no Kevin Smith has ever been associated with our campaign, meaning he has no knowledge at all of the true facts.”

Quevedo previously told San José Spotlight the campaign is reviewing its hiring records.

The complaint also lists three other people paid by Mahan’s campaign for “phone banking” as consultants.

Employees, not contractors

The complaint says all workers should be classified as employees—and provided benefits like sick leave and overtime pay. If Mahan’s campaign wants to list them as contractors, the campaign must prove the workers qualify under AB 5’s standards. Civil penalties for misclassification range between $5,000 and $25,000, according to California law. The attorney general, district attorney or city attorney could also investigate misclassification claims and prosecute violators.

Two labor and employment attorneys who reviewed the situation told San José Spotlight they see a case for misclassification.

To be classified as an independent contractor under AB 5, a worker must pass a three-prong test. They must be free from control and direction of their employer, the work is outside of the workplace’s usual course of business and the worker has routinely engaged in an independent trade, occupation or business they are hired to do.

“All three conditions must be satisfied to classify campaign workers as independent contractors,” Smith’s complaint says. “It is very likely Mahan can make no such showing.”

The complaint argues campaign workers often follow direction from the campaign manager—meaning they’re not free from their employer’s control. Workers are also hired to do political campaign-related tasks, such as canvassing and attending community events for voter outreach. The complaint says those jobs falls within the usual course of business of Mahan’s campaign.

Campaign consultants, election attorneys and pollsters with their own firms are typically considered independent contractors and exempt from AB 5, but workers who don’t work campaign-related jobs outside of Mahan’s campaign—or own a business—shouldn’t be classified as contractors either, the complaint says.

“Our public safety infrastructure is harmed when employers don’t pay their fair share of taxes and employees are exploited when they don’t have disability protection, sick leave or other basic benefits to manage an injury or sickness,” Smith told San José Spotlight. “Assuming these allegations are true, Matt Mahan must explain why he chose not to follow the law like everyone else. This does not bode well for his stewardship of a budget the size of San Jose’s if he can’t get his own financial house in order.”

Contact Tran Nguyen at [email protected] or follow @nguyenntrann on Twitter.

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