Workers' Compensation Coverage Agreements Between Employers

In the past, employers were able to enter into valid agreements to lease employees, and the agreement could be drafted to protect the employer from liabilities including workers’ compensation coverage.

California law imposes liability for the failure to obtain workers’ compensation coverage on both the labor contractor as well as the contracting business.¹

If a staffing agency fails to secure workers’ compensation coverage, you as the contracting employer may be held responsible for an employee’s injury, regardless of whether you controlled working conditions or wages.