When precisely is Workers Compensation Insurance Required in California?

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When precisely is Workers Compensation Insurance Required in
Operating a small business in California can be really challenging and confusing expertise
because of California's complex legal code. While there is several legal needs small business
house owners will definitely want to become acquainted and compliant with, understanding the
California workers compensation requirements to be a top priority. And according to the
California labor code, failure to comply the state's workers' compensation requirements may
result during a misdemeanor, fines of up to $100,000 and up to 1 year in jail. Additionally,
California's workers compensation laws are amongst the foremost strictly enforced laws in the
state. And California's Department of Industrial Relations makes it quite clear when an employer
is needed to hold workers compensation insurance.
In California, any business with employee's, is required to purchase California workers
compensation insurance. Also, if you're a roofer and you have got no employee's, you're still
required to hold workers compensation. As workers compensation is needed for all employees,
it's usually not needed for owners or workers that are independent contractors. Be careful, as the
line between classifying an employee as an independent contractor instead the employee is very
fine and making a judgment error on this subject can be very expensive.
The definition of an employee can be found under California Labor Code3351, but you need to
consult with an attorney to ensure any independent contractors that you may be using can be
usually legally classified in this manner. Improper worker classification is most prolific in the
construction industry as a result of relatively higher prices for workers compensation insurance
as well as the prevailing use of temporary and contract labor. Also, a business selection of legal
structure can even have an impact on workers compensation requirements. Typically, it's
incorrectly assumed that company officers or directors of an organization aren't needed to be
covered by workers compensation insurance. This is the only truth if the company
officers/directors totally own the business.
The process of determining the workers compensation requirements for several businesses is
comparatively straight forward, however becomes progressively complex when contract workers
get involved. In any event, if you're utilizing labor in your business you ought to ask your
insurance adviser to discuss any potential California workers compensation requirements. If
you're not operating with an insurance adviser or would like to have a second opinion, view
http://www.workerscompensation-california.com/WC_Glossary.html for your California
workers compensation requirements.