How Much Compensation Do You Get For Injured Workers

Workers' compensation in California is specifically established to help workers who suffer work-related injuries or diseases. However, there are particular exceptions that must be learned about by business owners and workers alike. This article discusses those people who are exempt from workers compensation in California, particularly with reference to restaurants and small businesses.

What is Workers Compensation in California?

Workers' compensation is an insurance policy that pays out compensation to workers for any job-related injury or disease. Some of the compensation paid may include medical treatment, disability, and vocational rehabilitation. Workers' compensation is generally a statutory insurance program that requires employers to pay compensation for any workplace injuries.

General Exemptions from Workers Compensation in California

Although most employers are required by law to maintain workers' compensation insurance, California law carves out exceptions to this general rule for the following categories of people and businesses:

1. Sole Proprietors Without Employees

Sole proprietors, meaning those persons owning a business without employees, are exempt from the general requirement that they carry workers' compensation insurance. It's only in these situations, after all, that no one is actually working under a policy; but if they hire a single employee, they need to get workers' compensation insurance.

2. Independent Contractors

Independent contractors are not classified as employees and thus fall outside the scope of workers' compensation laws. Still, employers should be careful to avoid misclassifying a worker as an independent contractor. California's ABC Test under Assembly Bill 5 (AB 5) provides strict guidelines to define an independent contractor.

3. Corporate Officers and Directors

Corporations with officers or directors holding more than 15% of the company's stocks are allowed to opt out of workers' compensation coverage. To qualify for the exemption, they must file a waiver with the insurance carrier, which should state that they have other health insurance and will give up their workers' compensation rights.

4. Family Members

The spouses or children of a business owner may be exempt if they are not receiving a salary and are not considered formal employees of the business. On the other hand, members of the family who render work for wages are classified as employees and are therefore usually covered.

5. Domestic Workers

In certain instances, domestic employees like nannies, housekeepers, and caregivers are excluded from workers' compensation coverage provided they work fewer than 52 hours or receive less than $100 in wages during the last 90 days of an accident.

Industry-Specific Considerations: Workers Compensation for Restaurants in California

Restaurants in California have their own challenges regarding workers' compensation. Generally, restaurant owners are mandated to carry insurance for their employees, but there are certain circumstances where exemptions apply:

1. Small Family-Run Restaurants

Restaurants owned and operated solely by family members who do not receive formal wages may be exempted. However, when non-family employees are hired, the business must comply with workers' compensation laws.

2. Temporary or Seasonal Workers

Restaurants hire temporary or seasonal workers quite often, especially when there are busy periods. Generally, temporary workers are to be covered; however, under specific circumstances, like a short employment period, an exception may apply. Always seek legal experts for proper compliance.

3. Delivery Drivers Classified as Independent Contractors

Some restaurants outsource food delivery to drivers who are classified as independent contractors. Since these are not employees, they are not covered by the restaurant's workers' compensation insurance. However, proper classification is important to avoid penalties and lawsuits.

Legal Penalties for Non-Compliance

If a restaurant does not have workers' compensation insurance when required, there will be grave penalties including:

Fines and Penalties: Employers can be liable for up to $100,000 in fines plus additional penalties for each day without coverage.

Lawsuits: Injured workers may sue non-compliant employers for damages, which far outweigh the cost of insurance.

Criminal Charges: In extreme cases, willful non-compliance could lead to criminal charges.

How to Know If You Need Workers Compensation

Determine if you need to carry workers' compensation by following these steps:

Evaluate Employee Status: Ensure if your employees are classified as employees or independent contractors under the ABC Test in California.

Determine Business Structure: Since you are a sole proprietor who doesn't have any employees then, you might qualify for a claim.

Get Professional Attorneys: Hire professional attorneys to avoid any breaches under California's intricate workers' compensation laws.

Advantages of Workers Compensation Insurance Coverage

You might be qualified to claim an exemption, however getting workers' compensation has so many benefits. One includes:

Employee Satisfaction: The employees will feel secure and thus become loyal and trustful.

Legal Protection: Covering them from costly lawsuits in cases of workplace injuries.

Business Continuity: Insurance provides stability in terms of finance in cases of employee injuries.

Final Thoughts

Understanding who is exempted from workers compensation in California is important for both the employers and the employees. There exist exemptions, but compliance with the law is essential to avoid punishment and protect your workforce. Such industries as restaurants must be even more careful about unique regulations on proper classification and coverage.