Homeowner is Employer of Uninsured Licensed Contractor’s Worker – Employment Law Weekly

Homeowner is Employer of Uninsured Licensed Contractor’s Worker

Kenneth Harlan was employed by Affordable Plumbing and Rooter for six or seven months until he was injured on August 3, 2010 while performing plumbing work at a new construction project, in Torrance California. He was injured while capping a sewage pipe that was placed in a three foot trench. He was paid in cash, depending on the type of job.

Hiroshi Tange was the homeowner who owned the property in Torrance, and had a homeowners policy of insurance with Farmers at the time of this injury.

During the first day of trial, Affordable was shown to have a Contractor’s License but was uninsured for workers’ compensation. With this additional information the case was set for second day of trial.

Hiroshi Tange, the homeowner testified that he had no recollection of seeing applicant work at the property at any time. He did not hire a plumbing contractor. The plumbing work was done by his brother-in-law, a handyman, who was not a licensed contractor, and a tile setter. The handyman did most of the plumbing under the house. The homeowner could not recall who dug the trench and laid the pipe to the sewer which was being capped by applicant.

The WCJ found that Harlen was an employee of the homeowner, Hiroshi Tang, at the time of the injury. Farmers Insurance and Hiroshi Tange petitioned for Reconsideration which was denied for the reasons stated in the WCJ’s report, which was adopt and incorporated in the panel decision of Harlan v Affordable Plumbing – ADJ7507358 (April 2023)

In his Report the WCJ noted that the type of work being performed (Plumbing) requires a license in good standing in California (Business and Professions Code Section 7000 et. seq.).

A contractor’s license is suspended, as a matter of law, at the time of hire of an employee in the absence of compensation insurance (Labor Code Section 3700; Business and Professions Code Section 7125.2).

The burden of proof on an issue lies with the party having the affirmative of the issue (Labor Code Sec. 5705). The applicant has the affirmative on the issue of employment and must prove the elements by a preponderance of the evidence.

Labor Code Section 2750.5 provides in pertinent part as follows: “There is a rebuttable presumption affecting the burden of proof that a worker performing services for which a license is required pursuant to Chapter 9 (commencing Section 7000) of Division 3 of the Business and Professions Code, or who is performing such services for a person who is required is an employee rather than an independent contractor…”

The WCJ noted that “Applicant’s testimony is more plausible than that of the homeowner on several points. … None of the work being done on the construction site was performed by contractors who were insured for workers’ compensation. … Review of this record shows that the testimony of the applicant has a greater likelihood of truth than that of the homeowner.”

Thus the WCJ concluded that “Affordable was doing work which required an active license. The license was suspended due to the lack of workers’ compensation insurance. As an employee of the unlicensed contractor Harlan is presumed to be the employee of the person or persons who benefitted by his labor and has control over the project” citing (Laeng v. Workmen’s Comp. Appeals Bd. (1972) 6 Cal. 3d 774 37 CCC 185).

The WCAB panel agreed with this conclusion stating “We have given the WCJ’s credibility determination great weight because the WCJ had the opportunity to observe the demeanor of the witnesses. (Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312, 318-319 [35 Cal.Comp.Cases 500].) Furthermore, we conclude there is no evidence of considerable substantiality that would warrant rejecting the WCJ’s credibility determination(s).”

Homeowner is Employer of Uninsured Licensed Contractor’s Worker

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