Legal Question in Employment Law in California

Re: Hire subcontractor vs. paying workers comp

You are entering a mine field. If you intend to dictate hours, etc., etc., (call to discuss) must be employee, unless you retaine someone from an employment agency who then is responsible for such payments.

Re: Hire subcontractor vs. paying workers comp

You probably can not legally do so. If you do and run afoul of the Labor Code or WCAB rules, you could end up owing penalties, interest, all unpaid contributions and taxes.

Re: Hire subcontractor vs. paying workers comp

You are headed for A LOT of trouble. Workers compensation was intended as a "bargain" between employees and employers. Employers promised to maintain workers compensation insurance, which would provide immediate medical payment to injured employees and LIMITED money to injured employees. In return, employees gave up the right to sue their employers in court -- for monies, including pain and suffering. (In Workers comp. the insurance company pays only for the value of the injury, computed by certain formulas. . . .) If you do what you want to do -- meaning, you do not maintain insurance, in California, an employee can then sue you in regular court (not workers comp court) -- AND, most importanly, you will have to prove that you were not negligent. (In most lawsuits, it is the plaintiff who has to prove that, but the burden would be switched to you because you did not buy the insurance.)

There are various tests to determine whether someone is really an employee -- these tests are under state and federal law. Suffice it to say that in the situation you describe, this person is an employee, not a contractor. If you choose to call him/her a contractor, you will expose yourself to possible tax liabilities as well -- both federal and state.

Here is a good article on the subject -- discusses NY law and federal law, but CA law on the subject is consistent.

http://www.ebglaw.com/article_171.html