EmploymentQuestion 687 of 690
Under Labor Code §2750.5, a worker performing services for which a contractor's license is required (Bus. & Prof. Code §7000 et seq.) and who is UNLICENSED is:
a.Presumptively an independent contractor
b.Outside the workers' compensation system entirely
c.Presumed to be an EMPLOYEE of the hiring entity for workers' compensation, wage-and-hour, and tax purposes, regardless of any independent-contractor agreement — because Labor Code §2750.5 makes licensure a prerequisite to independent-contractor status when a license is required
d.Eligible to be classified as an independent contractor if they hold a city business license
Explanation
Labor Code §2750.5 creates a STATUTORY presumption that a person performing services for which a contractor's license is required is an EMPLOYEE rather than an independent contractor, unless the person holds a valid CSLB license and meets the additional ABC/§2781 criteria. The California Supreme Court in State Compensation Insurance Fund v. WCAB (Mary M.) (2018) reaffirmed that §2750.5 supplements (not replaces) other tests. The hiring entity becomes responsible for workers' compensation, payroll taxes, and Labor Code obligations. City business licenses do not satisfy §2750.5; only the CSLB classification license does.
Law Reference: Labor Code §2750.5Practice all 690 questions free — no signup required.
Related questions on this topic
- Under Labor Code §2781 (the construction-subcontractor exception to AB-5), a bona fide business-to-business relationship requires, among other things, that the subcontractor:
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- Under Labor Code §226.8, a contractor who willfully misclassifies an employee as an independent contractor faces a civil penalty of:
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- IWC Wage Order 16 (on-site construction, drilling, logging, mining) addresses rest periods for non-exempt workers. The general rule under Wage Order 16 is:
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