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Tina
Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33166
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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Woker compensation for constrtuction: I am California Contractor

Customer Question

Woker compensation for constrtuction: I am California Contractor that is license and being audit by worker compensation. I am being audit by my workercomp regarding subcontractors. I give 1099 so I don't want to get in trouble. I hired these helpers based on projects to help me out. Now my workercomp is asking me are they licensed? Am I in trouble? I thought by putting on my payroll giving 1099 will avoid problems or audit. What should I do and how should I answer her regarding these workers that I hire to help on project. Most of these helper got 1099 from us that we pay them is more than $ 600 a year. Is there any way to that I won't get in trouble by my workercomp company audit.
Submitted: 3 years ago.
Category: California Employment Law
Expert:  Tina replied 3 years ago.

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. I am sorry to hear of your difficult situation. Before I can give you an accurate answer to your question, please provide the following additional information:

Do these workers perform a type of work which requires licensing by the state?

I look forward to assisting you as soon as I have received this information. Thank you.

Customer: replied 3 years ago.

If we sub out our jobs to subcontractors then they have to be licensed in the state of CA. Some of the workers are hire to do temporary work for us like cleaning and throwing trash out for our customer project. If it is framing, then both of us are working on the project.

Expert:  Tina replied 3 years ago.

Hello again, Davis, and thank you for clarifying that for me.

The fact that the worker's comp insurer is performing an audit is not by itself very troubling. The issue they are likely concerned about is whether the independent contractors should actually be treated as employees.

Under CA law, workers are typically assumed to be employees and entitled to worker's comp coverage and the other benefits employees are entitled to. Where a company has independent contractors, the burden is typically on the company to prove they are not employees but independent contractors. This can be done by setting out facts which show they are not employees, by evaluating:

  • 1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
  • 2. Whether or not the work is a part of the regular business of the principal or alleged employer;
  • 3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
  • 4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
  • 5. Whether the service rendered requires a special skill;
  • 6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  • 7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
  • 8. The length of time for which the services are to be performed;
  • 9. The degree of permanence of the working relationship;
  • 10. The method of payment, whether by time or by the job; and
  • 11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Here is a link which sets out these factors which courts use to determine whether a workers is an employee or IC under CA law:

 

http://www.dir.ca.gov/dlse/faq_independentcontractor.htm

 

 

 

I hope this helps clarify the situation for you. My goal is to provide you with excellent service – if you feel you have received anything less, please reply back as I am happy to address follow-up questions. Kindly rate my service when I have answered your questions so I will be compensated for my time assisting you. Thank you!

Tina

 

Expert:  Tina replied 3 years ago.
Hello again Davis,
I wanted to thank you for using JustAnswer, and to inquire whether my answer was helpful in clarifying your understanding of the law even though it may not have resulted in the outcome you were hoping it would.

I also wanted to make sure that you did not have any further follow-up questions for me with regard to the legal question I answered for you. If not, kindly provide a positive rating so I will be compensated for my time assisting you.
If you do not require further legal information at this time, please feel free to bookmark my profile so you can request me when you do have another question. Here is a link to my profile: http://www.justanswer.com/law/expert-tina/
Thank you very much and all the best to you.
Tina
Customer: replied 3 years ago.

What is the difference between independent contractor vs handyman? Are they the same?

Expert:  Tina replied 3 years ago.
Hello again, Davis.

Handyman is not a classification used by the authorities in determining what rights workers are entitled to typically. Workers are either independent contractors or employees as I indicated above.

A WC insurer would normally be interested first in determining whether a worker is an employee or not. If they are an employee, then state law dictates they are entitled to WC coverage and then they are classified into categories according to the tasks they normally perform to determine the rate of insurance which should be paid.

I hope this helps clarify the situation for you. My goal is to provide you with excellent service – if you feel you have received anything less, please reply back as I am happy to address follow-up questions. Kindly rate my service when I have answered your questions so I will be compensated for my time assisting you. Thank you!

Tina

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