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One of the most common questions we get from Santa Clarita business owners is “do I need to carry Workers Compensation Insurance?”

If you have employees, the answer is yes. Whether you have one part-time employee or hundreds of employees, the law requires you to carry Workers Compensation Insurance.  The primary exceptions to this rule are:

·      The business is a partnership and the only employees are the partners, or

·      The business is incorporated and the only employees are also corporate officers that together own 100% of the company. 



What About 1099 Workers?


A common myth is workers are independent contractors if you pay them with a 1099, and therefore, Workers Compensation is not needed.   This is not true.  Paying a worker with a 1099 does not make that person an independent contractor.  There are several different guidelines used to define an independent contractor.  The California Department of Labor uses one set of guidelines, while the I.R.S. uses a different set.   Some of the questions to determine if a worker is an employee include:

·      Does my worker perform the services that my business primarily offers to my clients?

·      Who owns the equipment my worker uses?

·      Who sets the working hours for my worker?

·      Who determines how my worker accomplishes their tasks or results?

·      Do my workers work primarily at my business location?  

The more of these questions you answer “Yes”, the higher likelihood you have an employee versus an independent contractor.  If you are not sure, we recommend consulting with a labor specialist (attorney or HR specialist) to clarify your situation. 


JS insurance cservices specializes in providing coverage for small medium size businesses and families in the sound read about.G Insurance Services specializes in providing insurance coverage for small and medium size businesses and families in the Santa Clarita Valley.  With over 25 years of insurance industry experience, our mission is to educate our clients, explain how their insurance works, and help them make better informed decisions.

JSG Insurance
27433 Tourney Rd. #280
Santa Clarita, CA 91355

Posted 4:05 PM

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