Who needs Workers' Compensation Insurance?
There seems to be a lot of confusion regarding worker's compensation insurance. Especially for small businesses who believe that becuase the person working is a family member or because they pay cash they are not required to carry worker's compensation insurance. This is not so.
An employee is defined as someone you engage or permit to work.
As mentioned above, just because you pay someone cash, does not mean they are not considered employees. In handling a matter where employment status is an issue, that is, employee or independent contractor, DLSE starts with the presumption that the worker is an employee California Labor Code Section 3351 defines who is an employee, and therefore who can be covered under a workers’ compensation policy. Whether a business is a sole proprietorship, a partnership, or a corporation, it is beneficial to develop a working relationship with a reliable, competent broker-agent who can explain coverage eligibility issues and present options based on the organization model of a business.