For more information on hiring contractors, select your state.
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California Hire licensed contractors who carry their own workers' compensation insurance. Under California law, an individual who hires a contractor to perform services for which a license is required, may become the "employer" of that contractor if the contractor did not have workers' compensation insurance at the time an injury occurred. This risk also extends to other employers of the uninsured contractor. Require every contractor to:
Tip: Use the California state's website, www.cslb.ca.gov, to verify a contractor's valid licensing. Click on "Check a Licensed Contractor." Then enter the contractor's license number and check the status of the license. Independent Contractors vs. Employees Can a contractor file a claim on your workers' compensation policy? It depends. If you pay a contractor who is required to have a license and the contractor is not licensed, that contractor is your employee, according to California labor law. If you hire an independent contractor (who is not required to have a license), answer these questions to determine whether to treat that worker as an employee: Who supplies the tools? Where is the work performed? If you supply the tools and the work is performed on your premises at your direction, this person may be an employee so you should include payments as payroll. Are the services provided an integral part of your business? If so, the person is likely an employee so include payments as payroll. How do you pay the person? Paying a worker by the hour or by commissions or piecework indicates an employee/employer relationship. If paid by the job, this indicates an independent contractor and payments should not be included. Does this person work for other businesses in the same capacity? If so, this is probably an independent contractor and payments should not be included. |
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