The classification of an employee compared to an independent contractor can be complex. Indeed, there are times when a person seems to be a quintessential independent contractor but is actually an employee. The resolution of this issue can have a significant impact on the ability of an injured employee to obtain compensation.
Let’s take the following hypothetical: A homeowner hires a tree-trimming company to cut some branches off a large tree in his front yard. The owner of the tree-trimming company assures the homeowner that he has done this many times and is licensed to do this kind of work. An employee of the tree-trimming company climbs the tree to perform the work. While perched in the tree twenty feet off the ground, the worker falls out of the tree and is seriously injured. It turns out that the tree-trimming company’s license was expired at the time.
The homeowner would likely be surprised to know that he may be liable for the injury suffered by the tree trimmer because he is actually considered an employee of the homeowner in this circumstance.
In California, there is a presumption that any person performing work for which a contractor’s license is required is an employee rather than an independent contractor (California Labor Code section 2750.5). “So what,” thinks the homeowner. “Doing some yard work doesn’t require a contractor’s license.” Not so fast.
Tree trimming is one of numerous activities that requires a contractor’s license. Pursuant to California Business and Professions Code Section 7026.1, Subsection (d), a contractor’s license is required for any person who performs “tree removal, tree pruning, stump removal, or engages in tree or limb cabling or guying.” However, gardeners doing routine pruning of trees less than fifteen feet in height are excluded from this license requirement.
To complicate matters further, a valid license is a condition of being classified as an independent contractor (California Labor Code Section 2750.5; see State Compensation Ins. Fund v. Workers’ Comp. Appeals Bd.  40 Cal.3d 5, 15; Chim v. Namvar  166 Cal.App.4th 994, 1004 [“the presumption ((of employment)) cannot be rebutted as to persons who do not have a valid contractor’s license”]; Mendoza v. Brodeur  142 Cal.App.4th 72, 77 [“the presumption that the person who employs the unlicensed contractor is the employer is conclusive”]). This “conclusive presumption” of employee status “is dependent upon only one factor: failure to secure the requisite license” (Neighbours v. Buzz Oates Enterprises  217 Cal.App.3d 325, 331). Thus, because the tree-trimming company did not possess a valid license to be classified as an independent contractor, the employee who fell is considered an employee of the homeowner.
Moreover, the fact that the owner of the company represented that he was licensed does not absolve the homeowner of liability (Rosas v. Dishong  67 Cal. App. 4th 815, 819-823 quoting State Compensation Ins. Fund v. Workers’ Comp. Appeals Bd., supra, 40 Cal.3d at 13 [“It is not unreasonable for the Legislature to conclude that effective implementation of a system of providing for workers’ injuries requires liability on the part of the ultimate hirer and that he should not be able to avoid liability on the ground that he dealt with a contractor when the contractor lacked a required license”]).
Thus, an unlicensed worker or company, who would otherwise be an independent contractor, can become an employee of the person who hired him or her. This is a significant issue with respect to liability, and the ability to recover compensation for work-related injuries. Employees have a right to workers compensation coverage, and if none exists, they have the right to bring a civil action, often with a presumption of negligence (See Labor Code §3708).
If you have been injured working for an unlicensed contractor, it is important to consider if the work required a license and, if so, who hired the contractor. Proper analysis of this issue can make the difference between finding a culpable party able to compensate for an injury and going without compensation for an injury. This is one of many reasons that, if you have suffered a serious injury on the job, it is often a good idea to consult with an attorney about your options for recovery.
(This is an attorney advertisement by Joshua Haffner)