A contractor fails to maintain workers' compensation insurance. The CSLB may suspend the license and impose a penalty of up to:
Correct Answer
B) $15,000
B&P Code Section 7125 allows for penalties up to $15,000 for failure to maintain required workers' compensation coverage.
Why This Is the Correct Answer
B&P Code Section 7125 explicitly sets the maximum civil penalty at $15,000 for failure to maintain required workers' compensation insurance coverage. This reflects the legislature's intent to make non-compliance financially significant enough to deter contractors from going uninsured.
Why the Other Options Are Wrong
Option A: $10,000
$10,000 is incorrect. While a plausible round number, B&P Code Section 7125 sets the ceiling at $15,000, not $10,000. Choosing this confuses the statutory penalty with other CSLB fine amounts used elsewhere.
Option C: $5,000
$5,000 is too low. This figure appears in other contexts (e.g., unlicensed contracting fines in some provisions), but it is not the maximum for workers' comp non-compliance under Section 7125.
Option D: $25,000
$25,000 exceeds the statutory maximum for this violation. It may seem logical that a larger fine would be imposed, but the code caps the penalty at $15,000 for this specific infraction.
Memory Technique
Think '15 for Workers' Safety': workers' compensation is about keeping workers safe — 15 letters in 'workers safety' reminds you the max penalty is $15,000.
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A contractor fails to secure workers' compensation coverage. What is the maximum civil penalty per employee for the first violation?
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