Insurance & LiensQuestion 1567 of 1605
A contractor hires day laborers and pays them cash, believing they are 'independent contractors,' and carries no workers' compensation. If a laborer is injured, the contractor most likely:
a.Only owes the CSLB a small fine
b.Has no exposure because they were independent contractors
c.Faces liability as an uninsured employer, since misclassified workers are often deemed employees requiring coverage
d.Is protected by the general liability policy
Explanation
Labeling workers 'independent contractors' does not avoid the duty to carry workers' compensation if they are, in substance, employees. Misclassified workers are frequently deemed employees, exposing the contractor to uninsured-employer liability, penalties, and license suspension under Labor Code §3700 et seq.
Law Reference: Labor Code §3700Practice 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)