Your Liability When You Hire An Unlicensed Contractor
If you hire someone to perform work at your house for which a contractor’s license is required (any improvement to your home over $500) and that person is not licensed by the CSLB or an employee of a licensed contractor you become the employer. As such, you may be liable for any potential lawsuits for personal injuries and lost wages should someone be injured while working on your property.
When a California homeowner hires a properly licensed contractor to work on a home the homeowner generally will not be liable for accidents or injury to the contractor or any workers. By law all licensed California contractors that have employees must purchase a workers’ compensation insurance policy. The policy provides the contractor’s employees with medical and wage replacement benefits for injuries that arise from workplace accidents.
However, if a homeowner hires an unlicensed contractor (think cash payment for labor) on a home construction project this may result in the inadvertent transformation of the unlicensed contractor or its worker into an employee of the homeowner. This change to the employment relationship opens up the homeowner to a potential lawsuit for personal injuries and lost wages.
It’s the burden of the homeowner to determine if a contractor is licensed. A homeowner may be held liable even if he or she was unaware the contractor was unlicensed. To protect oneself the homeowner should hire only a contractor who holds a license appropriate to the work to be performed and who has a worker’s compensation policy that is in force. That way, the homeowner avoids unwittingly becoming an employer and a target of a personal injury lawsuit.
To check if a contractor is properly licensed and has an active worker’s compensation insurance policy visit the Contractor’s State License Board website, click on the ‘Consumers’ tab and scroll to the ‘Check a License’ link.