The California Labor Code and Workers’ Compensation

California law requires all employers to carry workers' compensation Insurance. Workers' compensation provides injured workers with medical care, disability, vocational retraining, and other benefits. Workers' compensation is the "exclusive remedy" and Workers are protected by this coverage, giving up their right to any other remedy for workplace injury. 

Every staffing company that supplies and every company that utilizes contingent workers in California should be familiar with the California Labor Code. This blog provides information on some of the key sections of the Code with regards to workers’ compensation coverage, which applies to all W-2 contingent workers as well as internal staff.

If you are employing or utilizing contingent workers in California understanding these key sections of the Labor Code in concert with co-employer risks is important for any well run contingent workforce program.

Working with Staffing Companies Who Provide Workers’ Compensation Insurance to Workers as Part of Their Service
(Section 3602)

A client company may secure the payment of workers’ compensation on employees provided to their company by agreement with their staffing company by entering into a valid agreement with the staffing company - under which the staffing company agrees to obtain workers' compensation coverage for those employees.

If both companies enter into this agreement, both employers shall be considered to have secured the payment of workers’ compensation - provided there is a valid legal agreement between the employers to obtain the appropriate level of workers’ compensation coverage and that the coverage remains in effect for the duration of the employment provided.

Non-compliance with the above could result in civil or criminal penalties for failure to provide workers' compensation coverage or legal liability in the event of an employee injury.

Every California Employer Must Secure Payment of Compensation in One of the Following Ways (Section 3700)

A.) By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in California.

B.) By securing a certificate of consent to self-insure either as an individual employer, or as one employer in a group of employers, by the Director of Industrial Relations. To be considered, you must give proof that you have the ability to self-insure and to pay any compensation that might arise to your employees.

Consequences of Failing to Secure the Payment of Compensation (Section 3700.5, Section 3706, Section 3707, Section 3708 )

The failure to secure the payment of compensation is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court; or by both imprisonment and fine.

If the employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against the employer for damages.

If Workers’ Compensation Insurance is not provided, it is presumed by law, that the injury to the employee was a direct result of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence.

The employer may not defend their case by arguing that the employee (or the employee’s co-workers) were guilty of contributory negligence or that the employee undertook certain risks as a necessary part of the job.

Emergent  (www.emergent.com) takes care of employer obligations including Workers’ Compensation Insurance, for temporary workers. Please contact us at info@emergent.com or on 855 250 5000 for a free consultation today! 

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