Under California state law, employers are required to obtain workers’ compensation insurance for their employees. The failure to do so could result in an employer facing stiff legal penalties. Among other things, a business or organization may be hit with civil damages, regulatory fines, additional penalty compensation, and potentially even criminal charges.

Most business owners are broadly aware of their duty to obtain workers’ compensation insurance for employees. What you might not know is that it is not always so clear as to who is considered an “employee” under California law. This is a major risk when hiring an unlicensed contractor: They often lack workers’ compensation insurance and may be deemed your “employee” under the law.

Unlicensed Contractors Often Lack Workers’ Compensation Coverage

There are many risks associated with hiring an unlicensed contractor to do a job: These contractors rarely have any liability insurance, they may not comply with the terms of a contract, and it might even be illegal to work with them. Another major problem, that is often overlooked, is that unlicensed contractors almost always lack workers’ compensation insurance.

Lack of workers’ compensation coverage is a major risk. An accident can happen at any worksite, even if the job does not appear to be particularly dangerous. If an accident occurs while an unlicensed contractor is working on your premises, you may face some major liability risks that your business did not anticipate.

Unlicensed Contractor May be Deemed an Employee, Bring Uninsured Employer Claim

California has strict legal rules in place to discourage companies from using unlicensed contractors. Under state law (California Labor Code § 2750.5), an unlicensed worker cannot automatically be deemed an independent contractor. Put another way, an unlicensed contractor can be deemed an employee of the company that hired them. It is important to emphasize what this means: All businesses must obtain workers’ compensation insurance for their workers. Failure to do so could result in serious sanctions.

Defending Uninsured Employer Claims From Unlicensed Contractors

The best way for homeowners, landlords, and businesses to reduce risks is by working with reputable, fully licensed contractors. Find a company that has full liability insurance and carries the proper workers’ compensation coverage for its employees. If you face an uninsured employer claim from an unlicensed contractor, you should take immediate action to protect your interests. Building a defense is a time-sensitive matter.

We offer strong, effective defense in uninsured employer claims  in California. With deep experience representing clients in a wide range of uninsured employer cases, we are ready to help you identify every available defense and minimize legal exposure and the adverse impact. As an example, if the unlicensed contractor represented himself or herself as “fully licensed,” he or she may not be permitted to bring an uninsured employer claim.

We Handle Uninsured Employer Claims Throughout the Central Valley of California

At Yrulegui & Roberts, our California workers’ compensation defense attorneys have extensive experience defending a full range of uninsured employer claims. If you are a landlord or business owner with questions about unlicensed contractors and workers’ compensation, we can help. Contact our law firm today for a confidential initial consultation. We have law offices in Fresno, Bakersfield, and Sacramento and we represent uninsured employers throughout the wider region.