Which scenario would most likely require workers' compensation coverage under California law?
Correct Answer
B) LLC hiring one part-time helper
Any business that hires employees, even part-time, must carry workers' compensation insurance. Sole proprietors, partners, and corporate officers may be exempt in certain circumstances.
Why This Is the Correct Answer
California law requires any employer that hires even one part-time employee to carry workers' compensation insurance. An LLC hiring a part-time helper creates an employer-employee relationship, triggering mandatory coverage immediately regardless of hours worked.
Why the Other Options Are Wrong
Option A: Partnership with only partners working
A partnership with only partners working has no employees. Partners are not considered employees under workers' comp law, so no coverage is required unless they voluntarily elect it.
Option C: Sole proprietor working alone
A sole proprietor working alone has no employees and is exempt from mandatory workers' compensation coverage. They may opt in voluntarily, but it is not required.
Option D: Corporation with only officer-shareholders
Corporate officer-shareholders of closely-held corporations may be exempt from workers' compensation coverage under California Labor Code Section 3352, provided they meet the qualifying conditions.
Memory Technique
Think: 'One worker hired = coverage required.' The moment money changes hands for labor, the insurance clock starts ticking. Partners and solo owners are owners, not employees — that's the dividing line.
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