Workers' Compensation Insurance pays for medical care and physical rehabilitation of employees injured while employed and helps to replace lost compensation while the employee is unable to work. Also, most importantly, Workers' Compensation Insurance protects employers from being sued by injured employees in nearly all cases.

Employers, including Real Estate Brokers, are required by law to purchase Workers' Compensation Insurance for their employees and must be careful not to misclassify workers as independent contractors when they are actually employees. Following are links providing information on the difference between employees and independent contractor and other relevant information.

 

 

Contractors Required to Have Insurance

 

In California, all contractors are required to have workers' compensation insurance, even if they have no employees. Senate Bill 216 (SB 216) phased in requirements starting in 2023 for specific trades, with a full mandate for all active licensees by January 1, 2026, to curb uninsured, on-the-job injuries.

Failure to carry required workers' compensation insurance can lead to immediate license suspension by the Contractors State License Board (CSLB).

Even if you are a sole proprietor with no employees, you must comply with these regulations. If you hire anyone including subcontractors or day laborers, you are considered an employer under California law and must have workers' compensation insurance.

Property owners hiring uninsured contractors may be held liable if a worker is injured on their property.

Non-licensed handyman are considered Non-Licensed Contractors and must still comply with the law.

 

 

Workers' Compensation Questions and Answers for Employers

State Compensation Insurance Fund

Failure to Carry Workers' Compensation Insurance

Unlicensed and Uninsured Contractors - HOAs