Notice to real estate industry regarding workers' compensation coverage
California requires real estate brokers to provide workers’ compensation coverage for their real estate sales agents. If an agent of an uninsured broker is injured and cannot collect the workers’ compensation benefits to which they are entitled through the broker’s policy, the agent receives benefits from the Uninsured Employers Fund (UEF). The UEF would, in turn, make every attempt to collect from the broker.
In addition, when an investigation is conducted by the Division of Labor Standards Enforcement and it is determined that an employer is illegally uninsured, then that employer may be liable for up to $100,000 in penalties.
All uninsured employers in the real estate industry are urged to immediately obtain workers’ compensation coverage either through the state-recognized self-insurance program or through a carrier recognized by the California Department of Insurance.
Section 10032.b of the Business and Professions Code provides the following:
A real estate broker and a real estate salesperson licensed under that broker may contract between themselves as independent contractors or as employer and employee, for purposes of their legal relationship with and obligations to each other. Characterization of a relationship as either "employer and employee" or "independent contractor" for statutory purposes, including, but not limited to, withholding taxes on wages and for purposes of unemployment compensation, shall be governed by Section 650 and Sections 13000 to 13054, inclusive, of the Unemployment Insurance Code. For purposes of workers compensation the characterization of the relationship shall be governed by section 3200 and following of the Labor Code.