Ways Employers Can Try to Avoid Worker’s Compensation Laws in California

Worker’s compensation laws are a particularly confusing and complicated set of regulations that attempt to ensure workers receive fair payment from employers when they are injured or become sick on the job. California has some of the most comprehensive worker’s compensation in the country but that has not stopped some employers from trying to get around worker compensation laws. These shady tactics do not only harm individual employees, but all residents of the state as they result in higher medical insurance premiums and a less healthy state overall. That being said there are certain things employees can look out for in order to protect themselves from how employers can potentially get around the worker’s compensation laws in California.

Paying in Cash

One of the most common ways that employers in California attempt to bypass worker’s compensation laws is by using a cash based payroll. Employers will try to spin this as in the best interest of employees by claiming that it will allow them to avoid paying taxes on their income. However, and as Kenton’s Law Office explains this is an attempt to avoid having to keep actual records of employment which can be used to prove that a worker was employed by the firm. Additionally, this tactic lets the employer avoid obtaining worker’s compensation insurance coverage, so even if the employee proves they were a worker the firm may close, leaving the employee with little or no recourse.

Issuing Stock

Another common method that employers use to avoid having to pay workers compensation claims or obtain workers compensation insurance is by issuing stock and empty titles to employees. California has an exception built into its workers compensation laws that state that company owners do not have to be covered by workers compensation insurance. As a result some firms issued stock and gave false titles to workers in injury prone professions, such as cooks and security guards. Remember, if something sounds too good to be true it probably is, so an offer to be the vice-president of a company with stock options when your duties include being a line cook should immediately jump out as a warning flat to employees.

Contractor/Freelancer Deception

Employers will also attempt to claim that a worker’s 1099 status means that they do not qualify for workers compensation if they are injured. This premise is false on its face, as anyone acting under the guidance of a group for money or wages must be covered by an employer’s worker’s compensation insurance. Do not let an employer tell you that because you do not meet the legal definition of “employee” that you cannot be covered by worker’s compensation laws.