California Workers Compensation Legal Issues
Workers compensation is a no-fault system of benefits provided by States to most workers who have job-related injuries. If your company has employees, you are required by California law to buy workers compensation insurance. Sole proprietors with no employees are not required to carry CA workers comp insurance. Your employees should be covered for any work related injury or illness. Some states do allow people to opt out of the system if they can prove financial responsibility, but that is only in two or three states in the entire country. If you have employees, you are most likely required to carry workers’ compensation.
One question we often get asked is, what is an employee? An employee can be a full-time or part time person, working on behalf of the company. Temporary and seasonal staff can also be defined as an employee. Many people seem to think that just because someone isn’t a full-time employee they don’t need to have workers’ compensation coverage. Not true! Under all these cases you are required to have workers’ compensation insurance.
The way you pay your employee does not impact whether or not they are considered an employee. You can 1099 somebody and have him or her withhold his or her own taxes and you are still required to carry workers’ compensation coverage on that person. Don’t confuse tax laws and California workers’ compensation laws. These laws and statutes are completely unrelated.
What Does Workers Comp. Cover?
Mostly all injuries or illnesses that are caused by, through or on the job, are covered under workers compensation laws. Typically the benefits are defined as:
- Medical – cost of medical treatment.
- Time loss – lost wages.
- Disability/rehabilitation- total or partial disability which may require re-training or rehabilitation to return to work.
What about independent contractors?
An independent contractor is someone who owns their own business, so they control their own working hours. They control how they get the job done. They are the people to which you give a project, they return a completed project, and they are usually completely unsupervised by you. So, if you have someone who fits into this definition, you probably don’t need to carry workers’ compensation coverage on that person. However, it’s a good idea to contact us, so we can help with your business needs.
At Roussel Insurance we have access to a multitude of insurance companies with a wide range of products from business, professional to personal needs. It’s our job to shop around and secure the most competitive rates and the most appropriate coverage for you. We work for you, not the insurance companies!
This information is intended for the client, individual or entity to which it is addressed. These articles contain concepts and opinions, and are not intended to represent the consensus of the insurance or risk community, nor to provide professional legal or tax advice. Please seek professional legal or tax counsel before making any decisions. The information provided does not change or modify any insurance policy, only the actual terms of the in-force policies will govern claim settlements.