Hurt on a Cash or 1099 Construction Job?

Key Takeaways

Being paid in cash, by check or on a 1099 does not decide whether you are covered. The law presumes a person working for someone else is an employee (Lab. Code § 3357).
On construction work that needs a contractor’s license, a worker is presumed to be an employee, and nobody can be an independent contractor for that work without a license (Lab. Code § 2750.5).
Your immigration status does not matter. Workers’ compensation covers people “whether lawfully or unlawfully employed” (Lab. Code § 3351).
If your employer had no workers’ comp insurance, you can still get benefits through a state fund and can also sue the employer (Lab. Code §§ 3706, 3715).
Hired directly by a homeowner? Coverage depends on hours and pay in the 90 days before the injury, and the homeowner’s liability policy may be what pays (Lab. Code § 3352; Ins. Code § 11590).
Tell your employer in writing within 30 days, and file within one year (Lab. Code §§ 5400, 5405).

If you were hurt on a construction job in California, you can usually get workers’ compensation even if you were paid in cash or handed a 1099. How you are paid does not decide whether you are an employee. The law presumes you are one, and on construction work the rules are stricter still: a worker without a contractor’s license generally cannot be an independent contractor at all.

In the state’s 2024-25 fiscal year, California’s Uninsured Employers Benefits Trust Fund paid compensation in 1,451 cases where the employer had illegally gone without insurance, and “laborer” was the most common job on the list, at 465 cases, or 32 percent, according to the Department of Industrial Relations.

Cash, a 1099 or a handshake: none of them decides your status

Labor Code section 3351 defines an employee as anyone in the service of an employer “under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed.” No W-2, paystub or written contract is required.

Section 3357 then puts a presumption on your side: anyone “rendering service for another, other than as an independent contractor,” is presumed to be an employee. The hiring party has to prove otherwise.

Since 2020, that proof has been hard. Under the ABC test in Labor Code section 2775, you are an employee unless the hiring business shows all three of the following:

A. You are free from its control and direction, both on paper and in fact.
B. Your work is outside the usual course of its business.
C. You are customarily engaged in an independent trade or business of the same kind.

A framing crew working for a framing contractor fails part B on its face. Section 3351(i) makes anyone who is an employee under section 2775 an employee for workers’ compensation too. Willfully misclassifying a worker as an independent contractor is itself unlawful, with civil penalties of $5,000 to $15,000 per violation under section 226.8.

Construction has its own, stricter rule

Construction has an older rule that is tougher in one way. Labor Code section 2750.5 presumes that a worker performing services that require a contractor’s license, or working for someone who needs one, is an employee. It then adds a condition that settles most arguments: anyone doing licensed work “shall hold a valid contractors’ license as a condition of having independent contractor status.”

So a drywaller, roofer or concrete finisher with no license of their own generally cannot be an independent contractor on licensed work.

There is a narrow path for genuine subcontractors. Section 2781 lets a contractor use the older test for a construction subcontractor only if the subcontract is in writing, the subcontractor holds a Contractors State License Board license covering the work, has its own business location and the authority to hire and fire, carries its own insurance or bonds, and is customarily in business for itself. A laborer who shows up with a tool belt meets almost none of that.

Common construction pay arrangements and who usually owes workers’ comp
Your situation	Likely status	Who usually pays benefits
Paid cash by a licensed contractor	Employee (§§ 3357, 2750.5)	That contractor’s workers’ comp insurer
Given a 1099, no license of your own	Employee on licensed work (§ 2750.5)	The contractor’s insurer
Licensed sub with a written subcontract and your own business	Possibly an independent contractor (§ 2781)	Your own policy, if you carry one
Hired by an unlicensed contractor	Employee; the hiring chain may be liable	Depends on who hired whom; see below
Hired directly by a homeowner	Covered only above the hours and pay thresholds (§ 3352)	Often the homeowner’s liability policy (Ins. Code § 11590)
Employer had no insurance	Still an employee	The employer, then the state fund (§§ 3715, 3716)

You can look up any contractor’s license, classification and workers’ comp status on the Contractors State License Board’s license check.

If the contractor who hired you was unlicensed

Because an unlicensed contractor cannot be an independent contractor for licensed work, the law can look past them to whoever hired them. California courts have applied section 2750.5 to treat an unlicensed contractor, and in some cases the workers that contractor brought to the job, as employees of the general contractor or owner who hired them. That is often how a larger company’s insurance ends up responsible for a laborer it never paid directly.

One exception matters for small jobs. Business and Professions Code section 7048 exempts work on a single project under $1,000 that needs no building permit, so no license is required for it. That exemption does not apply to someone who “employs another person to perform, or assist in performing, the work.” A handyman who brings a helper is not exempt.

If you were hired directly by a homeowner

People hired straight off a corner or through a neighbor to work on a house fall under a special category. Labor Code section 3351(d) covers people employed by the owner or occupant of a home for work incidental to maintaining it. Section 3352(a)(8) then excludes that worker if, in the 90 days before the injury, the job was, or was contracted to be, for less than 52 hours, or for wages of not more than $100.

Clear both lines and you are covered, and Insurance Code section 11590 generally requires a homeowner’s comprehensive personal liability policy to include workers’ compensation for that kind of employee. If the homeowner has no coverage, the state fund and the presumption of negligence discussed below still reach bigger jobs, such as work expected to last at least 10 working days with at least $100 in labor (§ 3715(b)). Small household jobs generally fall outside both (§§ 3708, 3715(a)).

If your employer had no workers’ comp insurance

Every California employer except the state must carry workers’ compensation insurance or be approved to self-insure (Lab. Code § 3700). Knowingly going without it is a misdemeanor with a fine of at least $10,000 (§ 3700.5). An uninsured employer does not leave you without a remedy. It gives you two.

A workers’ comp claim anyway. Section 3715 lets you file with the Workers’ Compensation Appeals Board against the uninsured employer. If the employer does not pay the award, the Uninsured Employers Benefits Trust Fund does (§ 3716). The Department of Industrial Relations explains the process in its fact sheet on the uninsured employers fund.
A lawsuit. Section 3706 lets you sue the employer for damages “as if this division did not apply.” Under section 3708, the injury is presumed to be the employer’s fault, and the employer cannot argue that you were careless, assumed the risk or were hurt by a co-worker.

Contractors cannot quietly skip coverage either. Business and Professions Code section 7125 makes a certificate of workers’ comp insurance, or a sworn exemption stating the contractor has no employees, a condition of holding a license. Roofers (C-39), concrete (C-8), HVAC (C-20), asbestos abatement (C-22) and tree service (D-49) licensees must carry it regardless. A 2022 law would have required it of every licensed contractor, but a 2024 amendment pushed that date to January 1, 2028. A lapse automatically suspends the license (§ 7125.2).

Five numbers that decide a California construction worker's claim, in the order they usually come up: one working day for the employer to provide a claim form, 30 days to report the injury in writing, a 52-hour threshold for workers hired by a homeowner, one year to file a workers' compensation claim, and two years to sue an uninsured employer or a third party — None of these depends on how you were paid. Source: Labor Code §§ 5401, 5400, 3352, 5405; Code Civ. Proc. § 335.1.

Your immigration status does not change the answer

Section 3351(a) expressly includes people who are not citizens or nationals of the United States. Labor Code section 1171.5 adds that a person’s immigration status is “irrelevant to the issue of liability” when state labor laws are enforced. We cover this in detail in our post on workers’ compensation for undocumented workers. Reporting an injury is not a report to immigration.

When someone besides your employer caused the injury

If another subcontractor’s crew, a general contractor, a property owner or a defective ladder, scaffold or saw caused the injury, Labor Code section 3852 preserves a separate lawsuit against that party, alongside the workers’ comp claim. A third-party claim can recover pain and suffering and full lost earnings, which workers’ comp does not pay. Our San Diego construction accident page walks through who can be liable, and defective equipment claims follow product liability rules. Our post on a death on the job explains how the two claims interact.

What to do this week

Report the injury in writing. A text to the foreman counts as a start, but follow with a signed note. Section 5400 gives you 30 days.
Ask for the claim form (DWC-1). Once the employer knows of an injury that needs more than first aid, it must give you one within one working day (§ 5401).
Save proof you worked there. Texts about shifts, photos of the site and your crew, Zelle or Venmo records, cash envelopes, the job address, and the names of the foreman and general contractor.
Look up every contractor’s license on the CSLB site and screenshot the result, including the workers’ comp line.
Do not sign anything new that calls you an independent contractor. A form signed after the injury does not change what the job was.
Get medical care and tell the doctor it happened at work. Our guide to choosing your own workers’ comp doctor explains your options.

If the employer denies you worked there, or the insurer denies the claim, that is a dispute the Appeals Board decides, not the end of the case. See our post on what to do when a workers’ comp claim is denied. Firing you for filing is illegal too, as our post on getting fired while on workers’ comp explains.

Frequently asked questions

Usually, yes. How you were paid does not decide whether you are an employee. Labor Code section 3351 covers anyone working under an oral or written, express or implied contract of hire, and section 3357 presumes that a person working for someone else is an employee. The employer has to prove you were an independent contractor.

Often, yes, because a 1099 is a tax form, not a legal status. Under the ABC test in Labor Code section 2775, you are an employee unless the business proves all three conditions. On construction work that needs a license, section 2750.5 adds that you cannot be an independent contractor without a valid contractor’s license of your own.

You can still file a workers’ comp claim. Under Labor Code section 3715 the Appeals Board decides it against the uninsured employer, and the Uninsured Employers Benefits Trust Fund pays if the employer does not. You can also sue the employer under section 3706, where the injury is presumed to be the employer’s fault.

An unlicensed contractor generally cannot be an independent contractor for work that requires a license (Labor Code section 2750.5). Depending on who hired whom, that can make the general contractor or property owner responsible as the employer. Look up every company on the job on the Contractors State License Board website and keep a copy.

Sometimes. A worker hired directly by a homeowner is excluded from workers’ comp if, in the 90 days before the injury, the job was for less than 52 hours or for $100 or less in wages (Labor Code section 3352). Above those lines, Insurance Code section 11590 generally makes the homeowner’s comprehensive personal liability policy cover the claim.

Yes. Labor Code section 3351 covers workers “whether lawfully or unlawfully employed” and expressly includes people who are not U.S. citizens or nationals. Section 1171.5 says immigration status is irrelevant to liability when California labor laws are enforced.

Give your employer written notice within 30 days (Labor Code section 5400) and file the claim within one year of the injury in the ordinary case (section 5405). A lawsuit against an uninsured employer or a third party generally must be filed within two years (Code of Civil Procedure section 335.1).

Talk to a San Diego construction injury attorney

Banker’s Hill Law Firm has represented injured workers across San Diego County since 1991. Maxwell Agha and our team handle workers’ compensation claims and the civil claims that go with them, in English or Spanish, including for workers who were paid in cash.

On the workers’ compensation side, there is no upfront cost. In California, workers’ compensation attorney fees are a percentage of your recovery — commonly 9% to 15%, subject to Labor Code section 4906 — and must be reviewed and approved by a workers’ compensation judge. On a lawsuit against an uninsured employer or a third party, there are no upfront costs, and you owe no attorney fees unless we win. Your consultation is free.

If you were hurt on a job site, call (619) 230-0330 or contact our San Diego office. We also serve Chula Vista and the South Bay.

This article is general information about California law, not legal advice. Reading it does not create an attorney-client relationship. Whether you are an employee, and which deadlines apply, depends on the facts of your job, so speak with an attorney about your situation.