A contractor's employee is injured on a job site. The contractor's workers compensation insurance has lapsed. Under Arizona law, what is the potential penalty range for operating without workers compensation coverage?
Correct Answer
A) $2,000 to $10,000 per employee
Arizona law imposes penalties of $2,000 to $10,000 per employee for operating without required workers compensation coverage.
Why This Is the Correct Answer
Arizona law imposes penalties of $2,000 to $10,000 per employee for operating without required workers compensation coverage. Each uninsured employee represents a separate violation, making the total liability potentially very large for contractors with multiple workers.
Why the Other Options Are Wrong
Option B: $500 to $2,000 per employee
$500 to $2,000 per employee is too low and does not reflect Arizona's statutory penalty range. This range might be confused with minor administrative fines.
Option C: $1,000 to $5,000 per employee
$1,000 to $5,000 per employee is in the right general range but incorrect. The actual minimum is $2,000 and the maximum is $10,000 — this option underestimates both endpoints.
Option D: $5,000 to $25,000 per employee
$5,000 to $25,000 per employee overstates the statutory maximum. Arizona law caps the per-employee penalty at $10,000, not $25,000.
Memory Technique
Think '2K to 10K per worker, no workers comp = no luck' — $2,000 is the floor and $10,000 is the ceiling per employee. The range doubles the lower number five times: 2,000 → 10,000. If you have 5 employees, multiply by 5 — the liability can reach $50,000.
More Arizona Questions
What is the current minimum bond amount required for a residential contractor license in Arizona?
A contractor files a preliminary 20-day notice on January 15th for work that began on January 10th. The preliminary notice was delivered to the owner on January 18th. Under A.R.S. 33-981, is this notice valid for lien purposes?
Under Arizona law, which entity has the authority to investigate complaints against licensed contractors and impose disciplinary actions?
Under Arizona ROC regulations, what is the maximum amount a residential contractor can collect as a down payment before beginning work?
A contractor's license expires on June 30th. The contractor submits a renewal application on July 15th. Under Arizona ROC regulations, what penalty applies?
A contractor's workers compensation policy lapses for 15 days due to non-payment of premiums. Three employees are injured during this period, resulting in $85,000 in medical costs. Under Arizona law, what is the contractor's potential liability?
According to A.R.S. Title 32, which of the following can serve as a qualifying party for multiple contracting businesses?
A residential contractor enters into a contract for $15,000 to remodel a kitchen. Under Arizona law, what is the required down payment limitation?
A residential contractor completed $45,000 in work and materials. The homeowner paid $35,000 but disputes the remaining $10,000. How long does the contractor have to file a mechanics lien after recording the notice of completion?
A contractor has 8 employees working on various projects. The annual workers' compensation premium is $24,000. If the contractor fails to maintain coverage, what is the maximum daily penalty exposure?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass