Understanding who qualifies as an employee under California law for workers’ compensation claims is crucial for workers and employers. Workers’ compensation is a form of insurance that provides financial assistance and medical care for employees who sustain injuries while on the job. This coverage is a fundamental right for employees within an organization, allowing those injured to receive the support they need without the burden of excessive medical bills or lost wages.
However, the application of this coverage is not always straightforward. Sometimes, business owners may not recognize certain workers as employees, such as family members, or they may intentionally misclassify individuals as independent contractors. This misclassification can be an attempt to bypass the obligation of securing workers’ compensation coverage for them, which, while financially beneficial for the employer in the short term, can lead to significant legal and financial repercussions.
If you are navigating the complexities of a workers’ compensation claim in Glendale or believe that you have been misclassified, call Wax & Wax, A Law Corporation at (818) 247-1001 or contact us online to discuss your case.
Understanding California Labor Code § 3351
California Labor Code § 3351 delineates who is considered an employee for workers’ compensation purposes. This legal framework is crucial for allowing individuals injured on the job to receive appropriate medical care and financial support.
According to this section, an “employee” encompasses anyone in the service of an employer under any appointment or contract of hire, irrespective of the legality of the employment. This broad definition extends protections to a wide range of workers, ensuring that they are covered under workers’ compensation insurance if they sustain work-related injuries or illnesses.
It’s essential to break down the critical components of this statute to understand the full scope of who is considered an employee under the law:
- Persons, regardless of citizenship status
- Minors
- Elected and appointed paid public officers
- Officers and members of boards of directors
- Incarcerated individuals engaged in assigned work
- Persons holding the power to revoke a trust
- Persons committed to a hospital facility while engaged in assigned work
By including various categories of workers, the law acknowledges the diverse nature of employment and the importance of providing comprehensive protections to all individuals engaged in labor, regardless of their position, status, or circumstances.
Does My Employer Need Workers’ Comp Coverage for Just One Employee?
Yes. California law requires nearly every employer to carry workers’ compensation insurance the moment they hire a single employee. Unlike states that exempt small businesses below a certain headcount, California Labor Code § 3700 sets no minimum employee threshold — a business with even one part-time or seasonal worker must have a policy in place.
This requirement applies regardless of whether the employee works full-time, part-time, seasonally, or on a short-term basis. Employers who fail to secure coverage can face criminal misdemeanor charges, civil penalties from the state, and the loss of the “exclusive remedy” protection that normally shields employers from personal injury lawsuits — meaning an uninsured employer can be sued directly and be liable for damages beyond what workers’ comp would have covered.
If you believe your employer should have carried coverage but did not, an attorney can help you determine your options, which may include filing a claim with California’s Uninsured Employers Benefits Trust Fund (UEBTF) or pursuing a civil claim.
Independent Contractors vs. Employees
Independent contractors are individuals or entities that provide goods or services under terms specified in a contract or agreement. They do not work regularly for an employer but operate under their own business or trade.
Three primary factors differentiate independent contractors from employees, notably in California, which adheres to a specific set of criteria known as the “ABC” test:
- Autonomy from control. An individual is an independent contractor if they operate free from the direct control and direction of the hiring entity in connection with the performance of the work.
- Business operation. The work performed by the individual is outside the usual course of the hiring entity’s business.
- Customarily engaged. The person regularly operates within an independently established trade, occupation, or business closely related to their tasks.
The ABC test was established by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court (2018) and was later codified into state law through Assembly Bill 5 (AB 5), effective January 1, 2020. Under this framework, a worker is legally presumed to be an employee — the burden falls on the hiring business to prove all three prongs of the test to classify someone as an independent contractor instead.
| ABC Test Factor | Points Toward EMPLOYEE | Points Toward INDEPENDENT CONTRACTOR |
| A — Control | Business directs how, when, and where the work is done. | Worker sets their own hours, methods, and work location. |
| B — Business Scope | The work is part of the company’s usual business (e.g., a delivery driver for a delivery company). | The work is outside the company’s usual business (e.g., a plumber fixing pipes at a law firm). |
| C — Independent Trade | Worker only performs this type of work for one company. | Worker independently markets the same services to other clients or the public. |
This delineation holds significant implications for workers’ compensation insurance. Unlike employees, independent contractors are not covered under workers’ compensation in California.
The misclassification of workers as independent contractors instead of employees can be contentious. Some employers may deliberately misclassify employees to sidestep the financial and administrative responsibilities associated with workers’ compensation, unemployment insurance, and other employee benefits.
Those who believe that they have been incorrectly classified can:
- Research and document. Gather information and documentation that supports their position as an employee according to the criteria set forth by the ABC test. The State of California Department of Industrial Relations outlines the three-factor test to help determine a worker’s correct status.
- Seek legal advice. Consult with a lawyer who deals in labor law. An experienced attorney can analyze the situation in-depth and determine a practical action.
FAQs
Does California Labor Code § 3351 Cover Undocumented Workers?
Yes. Under California Labor Code § 3351, an employee is anyone in the service of an employer under any appointment or contract of hire, regardless of citizenship status or the legality of the employment. This means undocumented workers are still entitled to workers’ compensation coverage if they’re injured on the job.
Are Family Members Who Work for a Business Considered Employees?
Yes. California’s definition of “employee” is broad enough to include family members who perform work that contributes to the business, regardless of their relationship to the owner. Employers must provide workers’ compensation coverage for them just as they would for any other worker.
What Is the “ABC” Test, and How Does It Determine Employee Status?
The ABC test is the standard California uses to distinguish employees from independent contractors. A worker is presumed to be an employee unless the hiring entity can show all three of the following: the worker is free from the company’s control, the work falls outside the company’s usual business, and the worker is independently engaged in a similar trade or occupation on their own.
Can I Get Workers’ Comp If I Was Misclassified as an Independent Contractor?
Yes. If an employer wrongly labels a worker as an independent contractor to avoid providing benefits, the worker may still be entitled to workers’ compensation once the misclassification is proven. Gathering documentation under the ABC test criteria and consulting a labor attorney are key steps toward correcting the classification and recovering benefits.
How Many Employees Does a Business Need Before Workers’ Comp Is Required in California?
Just one. California requires nearly all employers with at least one employee — full-time, part-time, or seasonal — to carry workers’ compensation insurance. There is no small-business exemption based on headcount, and non-compliant employers face criminal and civil penalties.
Are Volunteers Covered by Workers’ Compensation?
Generally, no. Unpaid volunteers typically fall outside the Labor Code § 3351 definition of “employee” and are not covered by an organization’s workers’ compensation policy. Some nonprofits and public agencies purchase separate volunteer accident insurance, which is different from workers’ compensation coverage.
Family Members Working in the Business
Again, the definition of an employee in California is broad, encompassing anyone engaged or permitted to work by a business. Every employer using employee labor must secure workers’ compensation insurance, irrespective of the worker’s relationship to the business owner.
Essentially, if a family member performs tasks that contribute to the business, they are considered an employee for the purposes of workers’ compensation. This inclusion is crucial for safeguarding family members against the financial hardships from work-related injuries or illnesses.
Are Volunteers or Gig Workers Considered Employees?
Generally, unpaid volunteers are not considered employees under California law and are not covered by workers’ compensation. Gig economy workers — such as rideshare and delivery drivers — fall into a more complex category shaped by Proposition 22, which classifies many app-based drivers as independent contractors with limited benefits rather than full employees.
If you were injured while working as a gig or app-based worker, or as an intern or domestic employee, your classification may not be as clear-cut as it first appears. See our related guides:
- Are Interns Eligible for Workers’ Compensation?
- Are Food Delivery Drivers Eligible for Workers’ Comp?
- Why You Need Workers’ Comp Insurance for Your Domestic Employee
Protecting Rights and Navigating Claims
Workers are encouraged to familiarize themselves with their rights under California’s workers’ compensation laws. Knowledge of one’s status as an employee or independent contractor and the accompanying rights to compensation and medical care in the event of a work-related injury is essential for safeguarding one’s well-being and financial stability. Moreover, for those who may find themselves in ambiguous employment situations or suspect they have been misclassified, seeking clarification and legal recourse is a critical step toward fair treatment and access to entitled benefits.
The complexities of workers’ compensation law necessitate professional guidance and support. Schedule a consultation with Wax & Wax, A Law Corporation to discuss your case. We provide representation in Glendale.
