EmploymentQuestion 999 of 1605
A contractor with three employees carries no workers' compensation insurance. Under Labor Code §3700.5, failing to secure the required coverage is:
a.A criminal misdemeanor punishable by fine and/or imprisonment
b.A simple paperwork violation with no real penalty
c.Permitted as long as employees sign a waiver
d.Allowed if the contractor deposits money in a savings account instead
Explanation
Labor Code §3700.5 makes it a misdemeanor for an employer to be illegally uninsured, punishable by imprisonment in county jail, a fine of not less than $10,000, or both. Employees cannot waive their right to coverage.
Law Reference: Labor Code §3700.5Practice all 1605 questions free — no signup required.
Related questions on this topic
- Under California Labor Code §3700, when is a contractor legally required to carry workers' compensation insurance?
- California's workers' compensation system is described as a 'no-fault' system. What does this mean?
- Who is responsible for paying workers' compensation insurance premiums?
- An employee of an illegally uninsured contractor is injured on the job. What special legal right does the injured worker gain because the employer had no coverage?
- When the Division of Labor Standards Enforcement discovers an employer operating without required workers' compensation coverage, one immediate enforcement action it can take is to:
- As of January 1, 2026, under the phase-in enacted by SB 216, which licensed contractors must carry workers' compensation insurance?
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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)