2023 Who Can Be Excluded From Workers’ Compensation in California?

Employers are legally required to provide workers’ compensation for all employees, but some workers in California can be excluded from workers’ compensation. In case of an injury at work, it is important to know if you are covered.

When people are injured at work, they are entitled to workers’ compensation to cover the financial cost of their injuries. In many cases, employers are required to provide workers’ compensation for their employees. However, some people in California are excluded from workplace compensation, like independent contractors, executive officers, and sole proprietors. If you or someone you know was injured on the job and are excluded from workplace compensation, a Santa Ana, CA Workers’ Compensation Attorney can help you review your legal options.

Independent Contractors

Independent contracts, also called gig workers, are excluded from workers’ compensation in California. In California, a person is classified as an independent contractor if the hiring entity does not maintain control over the individual’s work, the individual performs work outside that of the hiring entity’s normal work, and the individual customarily engages in the type of work for the hiring entity. If an independent contractor is hurt while working in California, the hiring entity is not legally required to provide compensation for that worker.

If independent contractors hire employees, then they are required to provide workers’ compensation for them. The punishment for not providing workers’ compensation includes fines of no less than $10,000 and jail time.

Sole Proprietors

Sole proprietors are individuals who own their own businesses. Sole proprietors are not required to have workers’ compensation on themselves. However, roofers are an exception, and they are legally required to have worker’s compensation coverage even if they do not hire employees.

While sole proprietors are not required to get workers’ compensation for themselves, they are legally required to provide workers’ compensation for all employees, including any family members that do work for them. The only exception to this is if the family member is the spouse of the sole proprietor. In that case, insurance companies in California will consider the spouse a co-owner of the company, and the spouse can be excluded from workers’ compensation.

Executive Officers and Board of Directors Members

Executive officers of a company or members of the board of directors can be exempt from workers’ compensation insurance under certain conditions. The individual must own 15% or more of that company’s stock, and the company has to be a closed corporation, which means that the stock is only open to executive officers and directors, and no more than six people can be excluded.

Domestic Workers

Domestic workers, such as housekeepers and caregivers, are usually not excluded from workers’ compensation in California, but there are some exceptions to this. If a domestic worker works for less than 52 hours in a period of 90 days, the employer is not required to provide workers’ compensation.

Volunteer Workers and Workers With Non-Monetary Compensation

Any person who is a volunteer and performs a service without receiving compensation for it is also excluded from workers’ compensation in the state of California. Sometimes volunteers receive a stipend for necessities like food, but they are still excluded from worker’s compensation in this case. In California, deputy clerks or sheriffs may work as volunteers, and if so, they are also excluded from workers’ compensation.

Some non-profit organizations may decide to prove workers’ compensation for their employees, but they are not legally required to. Volunteers should check with the organization they are performing services for to understand what they are entitled to.

In addition, any individual who works in California in exchange for forms of non-monetary compensation, such as food or housing, is excluded from worker’s compensation. This category includes people who participate in sports or athletic activities without compensation, such as university students.

FAQs About Who Can Be Excluded From Workers’ Compensation in California

Who Is Exempt From Workers’ Comp in California?

Several groups of individuals are exempt from workers’ compensation in California, including independent contractors, executive officers, sole proprietors (except roofers), volunteers, and some domestic workers. There are some stipulations to each situation. For instance, in order for executive officers to be exempt, they must own 15% or more of a closed corporation’s stocks. Also, independent contracts and sole proprietors must provide workers’ compensation for their employees, including family members.

What Employees Are Generally Excluded From the Coverage of a Workers’ Compensation System?

Exclusion from workers’ compensation varies by state, but independent contracts and sole proprietors are often excluded from the coverage of a workers’ compensation system. Volunteer workers and individuals who work in exchange for non-monetary compensation are also generally excluded from workers’ compensation.

Do You Need Workers’ Comp for Family Members in California?

Yes, employers need to provide workers’ compensation for family members in California if the family members are performing services for the company. Business owners and independent contractors must provide workers’ compensation for all employees, regardless of their relation to them, and failing to do so can result in high fines and jail time. The only exception to the family member rule is if an individual is married to a sole proprietor. In this case, the spouse will be considered a co-owner and therefore is excluded from worker’s compensation.

If I Am Self-Employed, Do I Need Workers’ Compensation?

Individuals who run their own businesses do not need to get workers’ compensation in California. However, if the self-employed individual is a roofer who works as an independent contractor, then they are required to get workers’ compensation. In addition, self-employed individuals who hire employees need to provide workers’ compensation for each employee. Failing to provide workers’ compensation for employees can result in fines and jail time.

A Workers’ Compensation Attorney Can Help

If you or a loved one has been injured in a workplace accident in California, or you are unsure what your workers’ compensation rights are, speaking to a workplace compensation attorney can help you better understand your legal options. Contact an attorney with over 20 years of experience at Leviton, Diaz & Ginocchio, Inc.