California contractors must carry workers' compensation insurance if they have even one employee. Scope of Cover found that state penalties for being uninsured can reach $100,000. Coverage must be continuous to avoid license suspension. Failing to carry required coverage is a criminal offense under the California Labor Code.
Key figures
Source quote
Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.Open the source
#Who Needs Workers Comp Insurance in California?
California law mandates that employers, including those in the construction industry, must have workers' compensation insurance. This requirement applies even if the business has only one employee.
The rule requiring all California employers to provide workers' compensation benefits is found in Section 3700 of the California Labor Code.
#What Happens If My Coverage Lapses?
Workers' compensation coverage in California must be continuous. A failure to maintain the required insurance will lead to the suspension of a contractor's license.
Any work a contractor performs while the license is suspended is considered unlicensed work. This may result in further disciplinary action.
#What Are the Penalties for Being Uninsured?
Failing to have workers' compensation coverage is a criminal offense, as outlined in Section 3700.5 of the California Labor Code. The state can issue penalties of up to $100,000 against illegally uninsured employers.
If an employee sustains a work-related injury or illness while the employer is uninsured, the employer is liable for all costs associated with that injury or illness.
Frequently asked questions
Does a contractor with only one employee need workers' comp in California?
Yes, California law requires employers, including contractors, to carry workers' compensation insurance even if they have only one employee.
What happens if a contractor's workers' comp insurance lapses?
Failure to maintain continuous workers' compensation coverage will lead to the suspension of the contractor's license.
Is it a crime to not have workers' compensation insurance in California?
Yes, under Section 3700.5 of the California Labor Code, failing to have workers' compensation coverage is a criminal offense.
What is the maximum state penalty for being an uninsured employer in California?
The state can issue penalties up to $100,000 against illegally uninsured employers.
What happens if an employee gets hurt and my business is uninsured?
If an employee has a work-related injury or illness and the employer is uninsured, the employer is liable for all costs associated with that injury or illness.
Sources
- CSLB: Workers' compensation insurance for licenseesContractors State License Board · retrieved
- California DIR: Workers' compensation FAQCalifornia Division of Workers' Compensation · retrieved
Spot an error or an out-of-date figure? Report a correction and we will review it against the source.