Q: Several years ago, you wrote a column that was partially prompted by email about the dangers of hiring unlicensed contractors. Now that the home improvement season is upon us, the Contractors State License Board is warning about another danger to homeowners: lack of workers’ compensation insurance.

I’ve noticed advertisements for many licensed home improvement contractors, spanning many crafts from landscape to drywall and painting, who don’t carry workers’ compensation insurance.

I think you may remember the story I mentioned before about the roofer who picked up a worker outside a local home improvement store only to have that worker fall off the homeowner’s roof and suffer serious injuries. The worker ended up suing the homeowner for compensation. –John Motroni, San Francisco

A: We certainly do remember the story and the events leading to it. We wrote that hiring unlicensed workers was OK, providing the homeowner was aware of the risks. Motroni, who at the time was a producer for "7 on Your Side," a consumer protection TV segment on the KGO news, took issue.

After several email exchanges, we came to the shared conclusion that hiring a worker for "a little government work" was probably OK provided the homeowner knew the worker and realized that he, the homeowner, was taking on the role of contractor, with all the responsibilities that entails.

That means that if the job wasn’t done right, there is no recourse against the unlicensed worker and that the homeowner is responsible to provide workers’ compensation insurance or suffer the legal consequences should the worker get hurt.

The Contractors State License Board provides this 10-point checklist for hiring a contractor.

  • Hire only state-licensed contractors.
  • Ask to see a copy of the contractor’s license and insurance and check that the contractor’s license is in good standing at www.cslb.ca.gov.
  • Get at least three bids.
  • Get references from each bidder and take the time to check out their work.
  • Make sure the details of the project and the payment terms are in writing.
  • Confirm the contractor’s liability and workers’ compensation policies are active and the coverage amounts are adequate by calling the insurance companies.
  • Don’t pay more than 10 percent of the contract price or $1,000; whichever is less, as a down payment.
  • Progress payments should not get ahead of the work.
  • Keep a job file containing all relevant paperwork, including the contract and record of payments.
  • Do not make the final payment until you’re satisfied with the job, including cleanup.

California recently has been cracking down on unlicensed and underinsured contractors. In February, the Contractors State License Board, in conjunction with the Alameda County District Attorney’s Office, conducted a sting in the Berkeley Hills.

The board solicited bids for flooring, painting, glazing and landscaping projects on a 2,500-square-foot home. The sting netted 12 unlicensed contractors, four of whom did not have workers’ compensation insurance for their workers.

A tradesman doing a job for less than $500 in labor and materials is not required to be licensed. A solo licensed contractor doing his own work without any employees is not required to carry a workers’ compensation policy.

So if you’re hiring a contractor for a job costing more than $500 or he has employees, make sure he has the proper license and adequate insurance or realize you may have to pay the piper.

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