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 their salespersons even if they are independent contractors. The agency said it will take sweeping action within sixty days, or by June 15, 2004 to enforce the insurance requirement. Penalties for not carrying workers' compensation on covered workers is a misdemeanor punishable by up to one year in jail and up to a $10,000 fine. Enforcement may including citations and work stop orders with penalties as well as the issuance of a stop order prohibiting further operation of the business or use of "employee labor."
The law does not allow an employer to make the workers pay for workers' compensation insurance. The department is particularly focusing on this issue of charge-backs to employees. In light of this risk, C.A.R. urges all real estate brokers to take immediate action to verify that they have obtained workers compensation insurance for all of its salespersons, even if they are independent contractors. C.A.R. currently endorses the State Compensation Insurance Fund as its carrier but private sources are also available through insurance brokers. State Fund is at (877) 405-4545; ask for C.A.R. Group #260 coverage