Construction Industry May See Changes To Workers’ Compensation

April 05, 2019
Sacks & Zolonz, LLP
employers workers compensation defense

Legislators in the state of California are considering making changes when it comes to determining whether or not construction workers qualify as independent contractors or not.

Why does this matter?

There is a big difference between what an employer would have to pay towards worker benefits and what they would pay to an independent contractor. In many cases, businesses save significant amounts of money by using independent contractors to do work for their company. However, this can also be used as abuse towards workers, according to legislators.

At Sacks & Zolonz, LLP, we know that this can be the confusing territory for business owners to navigate. Today, we want to discuss the proposed changes and how they may affect you. If you need a Los Angeles employers workers compensation defense attorney, contact us today.

What Is Going On?

The proposed legislation would require employers to use the “ABC Method” when determining whether or not a worker should be classified as an independent contractor or an employee. The California Supreme Court has upheld the use of this method and it says that a worker may be classified as an independent contractor if they:

  • Are free from the control and direction of the employer as it relates to the performance of the work;
  • Perform work that is usually outside of the scope of work for the hiring contractor;
  • Is usually engaged in the same type of work as part of the business.

Why does this matter?

The University of California Berkley Labor Center says that construction workers are one of the three occupations in the state that are most commonly misclassified. Across the US, construction leads the way with misclassification. Because of this, many workers are not receiving their rightful employee benefits.

  • 26% of the state’s labor force are classified as independent contractors.

This Is Important

By changing state laws, legislators could change the way many businesses in California operate. In many cases, independent contractors are necessary, but hiring those contractors needs to be done legally. Keep in mind that you should always ensure that the contractors you hire have workers’ compensation insurance for themselves and their employees.

There are significant penalties for employers who do not pay proper worker benefits. Not having workers compensation coverage for employees is a misdemeanor crime that is punishable with jail time and significant fines. It also opens employers up to personal injury lawsuits by anyone injured while working. This can lead to significant judgments that would cost much more than workers’ compensation would have.

How We Can Help

If you have been accused by the state of California of not properly identifying workers as employees, you may need to seek legal assistance. Misclassification of employees may lead to you being accused of not paying workers’ compensation insurance, leading to criminal charges. When you need a Los Angeles employer’s workers’ compensation defense attorney, Sacks & Zolonz, LLP is ready to help. You can contact us for a consultation by clicking here or calling 310-216-7778.

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