Who needs Workers’ Compensation Insurance?
California Law requires real estate brokers to provide Workers’ Compensation Insurance coverage
for their real estate sales agents, even when those agents are independent contractors. For
purposes of Workers’ Compensation Insurance, the relationship between a real estate broker and a
real estate salesperson is governed by Section 3200 et seq. of the California Labor Code,
available at www.leginfo.ca.gov
Stiff penalties for uninsured Brokers!
If an agent gets injured while working and cannot collect benefits through the broker’s policy as
they are entitled, the agent receives benefits from the state’s Uninsured Employers Fund,
administered by the Department of Industrial Relations Division of Workers’ Compensation. In
turn, the DWC makes every attempt to reclaim benefits paid using the same methods the state
uses to collect overdue taxes, child support and student loans which includes liens against real
property and asset attachments. Additionally, when an investigation determines an employer is
illegally uninsured, the Department of Industrial Relations Division of Labor Standards
Enforcement will issue orders stopping the employer from conducting business and issuing civil
citations up to $100,000 until the broker is fully compliant. Some brokers erroneously require
agents to provide their own workers’ compensation insurance; thereby opening themselves up to
potential claims and lawsuits from current and former agents and fines.