State to Enforce Workers' Compensation Laws

State to Enforce Workers' Compensation Laws

Realegal(R) A Legal Update From The California Association of REALTORS(R) Friday, April 16, 2004

The California Labor and Workplace Development Agency has informed C.A.R. that it intends to take aggressive action against any real estate broker that does not carry workers' compensation insurance on its salespersons, even if they are independent contractors. The Agency is responding to a complaint alleging that real estate brokers are failing to carry workers' compensation insurance, and has announced that it will take this sweeping action to enforce the workers' compensation requirement within sixty days (i.e., by June 15, 2004). The Agency says that, for enforcement purposes, it is able to access and compare databases of those brokers carrying workers' compensation insurance against a list of all real estate licensees.

C.A.R. has always recommended that brokers carry workers' compensation insurance, even though some older cases indicate that it may not be necessary under some circumstances. The penalties for noncompliance, coupled with the potential enforcement action by California Labor Agencies, make the risk of not carrying insurance extremely high. The California Labor Agencies have been consistent over the decades in insisting that all real estate brokers carry workers' compensation insurance, and have backed this position with aggressive enforcement actions dating back to 1978.

The penalties for not carrying workers' compensation insurance on covered workers include:

    * A misdemeanor punishable by up to one year in jail and up to $10,000 in fines
    * Citations and enforcement issued by the California Labor and Workplace Development Agency
    * Issuance of a stop order prohibiting further operation of the business or use of "employee labor"
    * Private actions based on other statutes
    * Finally, the law does not allow an employer to make the employees pay for workers' compensation insurance.

In light of these risks, C.A.R. urges all real estate brokers to take immediate action to verify that they have obtained workers' compensation insurance for all of their salespersons, even if they are independent contractors.

C.A.R. currently endorses the State Compensation Insurance Fund as its carrier, but they are only writing new policies for those who have been declined by three different insurance carriers. Therefore, check with your insurance agent first and if you have three declines, then call State Fund at 877-405-4545. When completing the application, note the California Association of REALTORS(R) as the group (C.A.R. Group #206). We will continue to keep you posted as other options develop.

Realegal(R) is published by the CALIFORNIA ASSOCIATION OF REALTORS(R), a trade association representing more than 135,000 REALTORS(R) statewide.


Return to Local Resources

 

Quick Quote

Get your FREE
quote in just
seconds!

clock

 
 
No errors
 
 
No errors
 
 
No errors
 
 
 
No errors
 
 
No errors
 
 
No errors
 
 
No errors
 
 
 
secure

Trusted. Experienced. Secure.

 
 
 

Merchant Marketplace