EmploymentQuestion 687 of 1605
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.Eligible to be classified as an independent contractor if they hold a city business license
b.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
c.Outside the workers' compensation system entirely
d.Presumptively an independent contractor
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 1605 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)