Which statement about workers' compensation requirements is correct under the Contractors State License Law?
Correct Answer
A) Required for all contractors with employees
B&P Code Section 7125 requires all contractors with employees to maintain workers' compensation coverage.
Why This Is the Correct Answer
B&P Code Section 7125 mandates that all contractors who employ workers must maintain workers' compensation insurance. There is no minimum employee threshold — even one employee triggers this requirement. This is a fundamental protection for workers on construction sites.
Why the Other Options Are Wrong
Option B: Only required for public works projects
Only required for public works projects is incorrect. Workers' compensation is required for all contractors with employees, regardless of whether the project is public or private. The type of project does not affect this obligation.
Option C: Only required for contractors with 5+ employees
Only required for contractors with 5+ employees is incorrect. California law does not have a 5-employee threshold for workers' compensation in construction. Even a contractor with a single employee must carry workers' comp coverage.
Option D: Optional for specialty contractors
Optional for specialty contractors is incorrect. Specialty contractors (C-class license holders) are subject to the same workers' compensation requirements as general contractors. No license classification is exempt.
Memory Technique
Remember: 'Any employee = workers' comp.' Think of it as a 1-to-1 rule: 1 employee = 1 workers' comp policy required. No exceptions in contracting.
More California Questions
A Class C-10 electrical contractor has annual gross receipts of $3.2 million. What is the required bond amount under current California law?
Under B&P Code Section 7125.4, what is the fee for initial Home Improvement Salesperson registration?
According to B&P Code Section 7125, what is the maximum penalty the CSLB can impose for contracting without a license?
A home improvement contract for $8,500 requires a 3-day right to cancel notice. The contract is signed on Tuesday at 2 PM. When does the cancellation period expire?
A contractor employs 15 workers across multiple job sites. The total annual payroll is $850,000 with a workers' comp rate of 4.1%. If they self-insure with a deposit requirement of 125% of estimated annual premium, what deposit is required?
A C-10 electrical contractor wants to perform plumbing work valued at $8,000 as part of a larger electrical project. Is this permissible under CSLB regulations?
A homeowner discovers that an unlicensed contractor performed $25,000 worth of work on their property. Under B&P Code Section 7031, what remedy is available to the homeowner?
A Class B general building contractor wants to perform electrical work valued at $750. According to the B&P Code, this contractor:
A contractor's qualifying individual leaves the company. How many days does the contractor have to replace them before the license becomes invalid?
According to B&P Code Section 7031, what happens to a contractor's right to payment if they perform work while unlicensed?
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
Related Study Resources
Previous Question
A Class C contractor has been cited for performing work outside their license classification. According to B&P Code Section 7028, what is the maximum penalty for this first offense?
Next Question
A contractor employs 8 workers and has an annual payroll of $450,000. The workers' compensation insurance premium rate is 3.2% of payroll. What is the annual premium cost?