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Author Topic: Unlicensed Contractors are Statutory Employees  (Read 3162 times)
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« on: May 06, 2009, 06:59:53 PM »

The legal source for including unlicensed contractors is found in the California Labor Code section You must login to view links.
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Ā§ 2750.5
(emphasis added):
   In addition to the factors contained in subdivisions (a), (b), and (c), any person performing any function or activity for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code shall hold a valid contractors' license as a condition of having independent contractor status.

What if you find that your policyholder hired an unlicensed contractor that carries workers' comp insurance? 

Years ago, a Bureau attorney told me the two carriers could be held jointly liable for any injuries sustained by employees of the unlicensed contractor and advised me to include the payments to the unlicensed, insured subcontractor.

However, since open rating in 1995, the Bureau no longer has authority over matters of employment status (for a good history lesson and additional resources, see Auditor1's post: You must login to view links.
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WCIRB and C&R Minutes Authority Diminished
).  So check with your underwriting department to see whether they want to cover the unlicensed contractor and open your company up to the potential liability, or simply exclude it.  More than likely, they'll opt for the latter.
« Last Edit: January 05, 2016, 01:07:04 PM by auditor1, Reason: update link » Logged

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