Malcolm Rivera
California offers some of the most comprehensive workers' compensation coverage in the US. If an employer has at least one employee, they are required by law to have workers' compensation insurance. This includes undocumented workers, minors, and those who are incarcerated. However, certain categories of employees may not be eligible for coverage, including independent contractors, sole proprietors, business partners, and corporate officers. Additionally, family members employed by a family-owned business may be excluded, and volunteers are generally not covered unless they work for certain nonprofit organizations. Understanding worker classification is crucial, as it determines eligibility for benefits.
| Characteristics | Values |
|---|---|
| Employees | All employees are covered, including undocumented workers, minors, incarcerated individuals, and green card holders. |
| Independent contractors | Generally not eligible for workers' compensation. |
| Sole proprietors | Not covered, but can elect to be included. |
| Business owners | Not covered, but must provide coverage for employees. |
| Corporate officers and directors | Can be excluded if they fill out a waiver and meet certain stock ownership requirements. |
| Volunteers | Generally not covered, but some may be eligible for coverage under specific state provisions. |
| Domestic workers | Not covered if working less than 52 hours within a 90-day period, but must be covered if exceeding this threshold. |
| Family members employed by a family-owned business | May be excluded from coverage, depending on the business entity and their roles. |
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Independent contractors
In California, independent contractors are generally not eligible for workers' compensation coverage. Independent contractors are considered self-employed and are responsible for their own insurance and tax liabilities. They do not receive benefits like traditional employees but can successfully complete the work needed by the company.
To be classified as an independent contractor in California, an individual must meet the following requirements outlined by California Assembly Bill 5:
- The worker is free from the employer's control and direction in the performance of services.
- The worker is performing work outside the usual course of the business of the hiring company.
- The worker is customarily engaged in an independently established trade, occupation, or business.
This clarification is important because some employers may misclassify employees as independent contractors to avoid providing benefits such as workers' compensation insurance, minimum wage, and payroll taxes. Failing to understand the correct classification can cause workers to miss out on benefits they are entitled to.
It is worth noting that there is an exception for roofers who work as independent contractors. Due to the dangerous nature of the job, California law requires these workers to carry workers' compensation.
In California, workers' compensation is a comprehensive program, and while the majority of workers are entitled to benefits, certain categories of employees may not be eligible, including sole proprietors, business owners, and partners.
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Business owners
As a business owner in California, it's important to understand the state's workers' compensation laws and how they apply to you and your employees. Workers' compensation provides financial support and medical care for employees who suffer work-related injuries or illnesses, and it's a vital part of your business insurance portfolio.
Firstly, let's address who is considered an employee under California law. The definition is quite broad and includes full-time and part-time employees, green card holders, and even undocumented immigrants. However, independent contractors, who are self-employed and negotiate their terms of employment, are generally not considered employees and are not eligible for workers' compensation coverage. If you, as a business owner, have misclassified your employees as independent contractors, they may be missing out on essential benefits.
Now, let's discuss who is exempt from workers' compensation. In California, sole proprietors, partners, and owners of a business are generally excluded from workers' compensation coverage. Additionally, corporate officers and directors can choose to be excluded by submitting a valid written waiver. However, if they perform dangerous work, such as roofing, they may be required to carry workers' compensation, even if they are independent contractors.
While it is not mandatory, some business owners choose to opt into workers' compensation coverage for themselves. This can provide peace of mind and ensure they are protected in the event of a work-related injury or illness. However, some insurers may not offer coverage for sole shareholders or business owners, so it's important to explore your options.
Lastly, it's important to understand that while certain family members employed by a family-owned business may be excluded from coverage, this is not automatic and depends on the type of business entity and their roles within the company. For example, a corporation may be required to provide coverage for all employees, regardless of their familial relationship, while a sole proprietor may have the option to exclude immediate family members.
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Volunteers
Some volunteers, such as volunteer firefighters, may be eligible for coverage under specific state provisions. Additionally, certain nonprofit organizations may choose to provide workers' compensation coverage for their volunteers, even though it is not legally mandated.
In California, individuals who provide volunteer services for a non-profit organization that is exempt from federal income tax and who receive no compensation other than meals, lodging, or transportation, are not covered by workers' compensation under state law. This includes volunteers who work as ski patrol workers or at ski areas, as well as those who volunteer at sporting events, such as Little League coaches or ushers at major sports stadiums.
It is important to note that while volunteers may not be covered by workers' compensation, they can still seek legal guidance if they have suffered a workplace injury. An experienced attorney can help individuals understand their rights and options for recovering compensation.
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Family members
In California, workers' compensation insurance is mandatory for most employers, and employees are broadly defined as any person in the service of an employer. However, there are some exemptions to the workers' compensation system.
Family-owned and operated businesses in California can often get exemptions for employees who are immediate family members, such as spouses, children, and siblings. However, it's important to note that not all insurers will provide a policy that covers a sole shareholder/business owner's spouse. In the case of a married sole proprietor, the spouse is typically considered a co-owner and excluded from workers' compensation. But if the spouse is not a co-owner and is on the payroll, they must be treated as an employee and included in the workers' compensation policy.
For example, if you "hire" your son to sweep the driveway, he is not considered an "employee" by the state of California, and you do not need to get workers' compensation coverage for him. However, if you own a restaurant and hire your son to sweep the floors, he would be considered an employee and would need to be covered unless he is an owner, officer, member, or partner.
It's important to consult with a workers' compensation lawyer to determine whether your specific situation qualifies for these exemptions, as the requirements may vary depending on the insurance company and the laws in California.
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Domestic workers
In California, workers' compensation is a mandatory insurance policy for employers with one or more employees. The state offers some of the most comprehensive workers' compensation coverage in the US, with even undocumented workers, minors, and incarcerated individuals covered.
However, there are several exemptions to the workers' compensation system. Domestic workers, such as housekeepers, nannies, and caregivers, are exempt from workers' compensation coverage under certain circumstances. In California, an employer is not required to provide coverage for domestic workers who work less than 52 hours within a 90-day period. If a domestic worker exceeds this threshold, the employer must provide workers' compensation coverage.
Other exemptions include independent contractors, such as app-based delivery drivers, freelance illustrators, and consultants. Sole proprietors and partners of a business are also exempt, as are certain agricultural workers and family members employed by a family-owned business. However, this exclusion for family members is not automatic and depends on the type of business and their roles within the company.
Volunteers are also generally exempt from workers' compensation, although there are exceptions, such as volunteer firefighters. Additionally, those who work for religious, charitable, or relief organizations and are paid in kind (e.g., with meals or housing) are not covered by workers' compensation.
It is important to note that employers cannot deliberately misclassify their employees as independent contractors to avoid workers' compensation obligations. Understanding one's classification is crucial to ensuring access to entitled benefits.
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Frequently asked questions
In California, independent contractors are generally not eligible for workers' compensation coverage. These individuals are considered self-employed and are responsible for their insurance and tax liabilities. Sole proprietors and partners of a business are also not automatically covered by workers' compensation insurance. Additionally, family members employed by a family-owned business may be exempt, although this depends on the type of business and their roles.
Corporate officers and directors can choose to be excluded from workers' compensation coverage. However, they must own at least 10% of the company stock or at least 1% if a family member owns 10%. They must also be covered by a separate health insurance policy and sign a written waiver.
Yes, volunteers are generally not covered by workers' compensation laws in California, unless they are volunteer firefighters or work for certain nonprofit organizations that choose to provide coverage. Additionally, domestic workers who work less than 52 hours within a 90-day period are exempt, but coverage is required if they exceed this threshold.
