California’s New Law and Worker’s Compensation Insurance

30 January 2020
Comments: Comments Off on California’s New Law and Worker’s Compensation Insurance
Category: Blogs
30 January 2020, Comments: Comments Off on California’s New Law and Worker’s Compensation Insurance

A controversial new law went into effect in California on January 1st, 2020.   California’s “Gig-Worker Law” makes it more difficult for businesses to treat workers as independent contractors.   As a result, more workers will now fall under the Worker’s Compensation Insurance coverage of their employer.

Under the new law, a worker is considered an Independent Contractor, only if he or she can satisfy 3 separate conditions:

(A) They must be free from control of the hiring entity

(B)  They must work outside the hiring firm’s usual business

(C)  They must have a business separate and independent of the hiring entity

If all three of the above conditions are not met, the person is considered an “Employee” of the hiring entity.   Being an employee, requires the hiring entity to cover that person under their Worker’s Compensation Insurance.

Obviously, the above law could have a major impact on a firm’s bottom line, especially if a worker’s compensation audit picks up payroll of previously classified IC’s, that a business owner was not expecting.

If you have questions of how this might affect your insurance, please do not hesitate to reach out to your insurance professional at Hatter, Williams & Purdy Insurance 760-795-2002.

Comments are closed.

Due to Governor Newsom’s “Stay at Home” order, our offices will be closed. If you have a claim to file, please note the carriers claims phone numbers listed under “Client Services”. Also, if you have a critical insurance issue, and leave a voice message at the main phone line, we will get back to you as soon as we can. We are working to have our employees set up remotely to assist you. We appreciate your patience during this critical time.
+