EmploymentQuestion 687 of 1632

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.A contractor if he has a city business permit
b.Presumed an employee of the hiring entity
c.Outside the workers' compensation system
d.Presumptively an independent contractor

Explanation

Labor Code §2750.5 makes holding the required contractor's license a prerequisite to independent-contractor status for any work for which a license is required, so an unlicensed worker is presumed an employee of the hiring entity for workers' compensation, wage-and-hour and payroll-tax purposes, whatever the parties signed. (a) is the license substitution error: a city business tax certificate is a municipal revenue document and satisfies nothing in §2750.5 - only a CSLB classification license does. (d) is the pre-1990 default that §2750.5 reversed. (c) reads the absence of a policy as an absence of coverage; the opposite follows, because the hiring contractor's own carrier picks up the injury and the contractor absorbs the exposure.

Law Reference: Labor Code §2750.5; Business & Professions Code §7000 et seq.

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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
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