J & N REALTY, INC.

Independent Contractor – Workers Compensation Coverage  

Insurance Code section 11590 requires comprehensive personal liability insurance policies to include a provision for workers' compensation for "any person defined as an employee by subdivision (d) of Section 3351 of the Labor Code."  

Section 3351, which defines "employee" for purposes of workers' compensation, provides in subdivision (d) that an employee is "any person employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant."  

Section 3352 excludes certain persons from the section 3351 definitions of "employee," and thus excludes them from workers' compensation coverage.  The exclusion pertinent here is section 3352(h), which excludes from the definition of employee a person defined by section 3351(d), but who was only employed less than 52 hours in the 90 calendar days prior to the injury.    

Section 3706 authorizes an employee who is not excluded from compensation coverage to sue his employer in tort if the employer does not have workers' compensation insurance.  The statute provides: "If any employer fails to secure the payment of [workers'] compensation, any injured employee or his dependents may bring an action at law against such employer for damages, as if this division did not apply.”  The reference "this division" is to Division 4 of the Labor Code, which governs workers' compensation.  (§ 3200 et seq.)   

Finally, section 2750.5 creates a rebuttable presumption that a worker performing services for which a license is required is an employee and not an independent contractor.  The statute also makes a valid license a condition of independent contractor status.  The Supreme Court has interpreted this statute to provide that "the person lacking the requisite license may not be an independent contractor.”  (State Compensation Ins. Fund v. Workers' Comp. Appeals Bd. (1985) 40 Cal.3d 5, 15 (State Fund);  Cedillo v. Workers' Comp. Appeals Bd. (2003) 106 Cal.App.4th 227, 233 (Cedillo).  "Accordingly, the presumption that the person who employs the unlicensed contractor is the employer is conclusive.”  (Cedillo, supra, at p. 233.)  

Section 2750.5 is not a part of the workers' compensation law, but is contained in Division 3 of the Labor Code--which deals with the employer-employee relationship.  However, by its own terms the statute supplements, and applies to, workers' compensation law.  (State Fund, supra, 40 Cal.3d at pp. 9-15; Cedillo, supra, 106 Cal.App.4th at pp. 232-234.)