Worker’s Compensation and the Homeowner

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Worker’s Compensation and the Homeowner

You want to protect your biggest investment from angles, don’t you? You have fire, earthquake, and standard homeowner’s policies, you pay for pest control services to keep bugs from ruining your home, and you have an umbrella policy on top of your auto policies. In other words, you want to guard your castle from any possible type of invader. Have you thought about worker’s compensation laws and how they affect you as a homeowner?

I recall the movie “Hot Shots” with Charlie Sheen, and he uttered the line to an actress, “I’m falling for you like a blind roofer”. Yes, funny – however I immediately recalled a well-to-do family I knew that lived in the exclusive neighborhood of Holmby Hills, California – yes, that same exclusive area where the infamous Playboy Mansion has been located for decades. And, what wasn’t funny, was that they hired a roofer – and guess what – he fell off the roof, and severely hurt himself. And, not having worker’s compensation insurance, he sued the family, who were ordered to pay a fortune in medical bills and lost wages for the worker.

So, as homeowners, what are our concerns when hiring a worker on our properties?

California Homeowners need to be aware of the workers’ compensation guidelines to avoid fines, penalties and huge legal entanglements. Workers’ compensation laws protect workers who are injured while working – and the laws are designed to make sure that employees who are injured or disabled are provided with fixed monetary amounts, removing the need for litigation.
The California Labor Code states that anyone working for a homeowner will be an employee unless you can prove otherwise. Further, California Laws tell us employers, the homeowner in this case, that they must purchase workers’ compensation insurance when any employee works for them. So yes, we have to make sure that our workers have this – it’s not a policy for which WE pay, but we have to make sure that THEY have it.

We can only hire licensed and insured contractors who have their own workers’ compensation insurance, as well as other service providers who are licensed, if appropriate, and insured.
How to know if they are insured?  Before any company, organization, business or contractor begins work for you, ask them to provide you with a Certificate of Insurance which will list all of their insurance policies. This certificate will indicate a list of the insurance policies these business has in place listing their insurance companies, the amounts and types of insurance, and the dates the policy started and are to end. If they can’t provide you with this, you must assume that they don’t have it – and don’t hire them, regardless of how “reasonable” their fees are.

However, there are some interesting points – when we hire a worker at your house for a one-time job of casual domestic work lasting less than fifty two (52) hours, they are excluded from the Labor Code definition of our employee. However, if they are unlicenced and performing work for which a license is required, the status becomes less clear.

As to long term workers, such as a cook or chef, housekeeper, child care worker, elder care worker, or gardener, the Labor Code definition of “Employee” includes 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, unless that person is excluded under the “52 hours in 90 days” exclusion of Lab.C. § 3352(h).

Insurance Code § 11590 provides that every homeowner’s comprehensive personal liability insurance policy issued or renewed in California after 1977 is required to have, or will be imputed to have, coverage for worker’s compensation benefits for “Employees” as defined in the Labor Code, if they are not covered by other compensation insurance.

However, when you hire someone for a longer term project, such as a home remodel,  construction of additional rooms or a pool, or any job not “incidental to the ownership, maintenance, or use of the dwelling” you must ensure that such persons are properly licensed and insured. If they are not, you could become their employer and be responsible for the equivalent of worker’s compensation benefits in the event anyone is injured.

OUR SUGGESTION: You absolutely must check on the license status of any contractor you hire before they  begin any sort of work, and insist on proof of current and valid worker’s compensation insurance. Keep a photocopy of the insurance certificate and a printout of the contractor’s license status. The license status of a contractor can be checked on the website of the State Contractor’s Licensing Board.

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