Which California code section primarily governs workers' compensation insurance requirements for construction contractors?
Correct Answer
C) California Labor Code Section 3700
California Labor Code Section 3700 requires employers to secure workers' compensation coverage and is the primary statute governing workers' compensation insurance requirements.
Why This Is the Correct Answer
California Labor Code Section 3700 is correct. This section mandates that every employer in California secure the payment of workers' compensation benefits for their employees, either through an admitted insurer, a self-insurance certificate, or a legally permissible alternative. It is the foundational statute for workers' compensation insurance obligations.
Why the Other Options Are Wrong
Option A: California Revenue and Taxation Code Section 23038
California Revenue and Taxation Code Section 23038 is wrong. This section relates to corporate franchise taxes and tax exemptions, not workers' compensation insurance requirements.
Option B: California Corporations Code Section 17701.04
California Corporations Code Section 17701.04 is wrong. This section pertains to the formation and definition of Limited Liability Companies (LLCs) under California law, not workers' compensation.
Option D: California Business and Professions Code Section 7125
California Business and Professions Code Section 7125 is wrong. While this section does relate to contractors and workers' compensation (requiring licensees to maintain coverage as a condition of licensure), it is the CSLB licensing requirement, not the primary statute governing workers' compensation itself. Section 3700 is the source law.
Memory Technique
Labor Code 3700 = 3700 workers protected. Think of 3700 workers on a job site — they all need workers' comp. The LABOR code protects LABOR (workers).
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