Loranger

Business and Professions Code section 7125.2 provides for the automatic suspension by operation of law of the license of a contractor who fails to obtain or maintain workers’ compensation insurance coverage. In Wright v. Issak (2007) 149 Cal.App.4th 1116 [ 58 Cal.Rptr.3d 1 ] (Wright), the court concluded a contractor who had intentionally and vastly underreported his payroll to the State Compensation Insurance Fund (SCIF) failed to obtain workers’ compensation insurance triggering the automatic suspension of his license pursuant to section 7125.2, and as a result he could not sue for unpaid work that required a license (§7031, subd. (a)) and he could be sued for reimbursement of compensation already paid (§ 7031, subd. (b)).

In this case we consider whether a licensed contractor who has a policy of workers’ compensation covering his employees, who uses a subcontractor not knowing he is unlicensed and knowingly employs his 13-year-old son and his son’s friend, who do not have work permits, as well as another person who does not have a contractor’s license, to help perform construction work, is likewise subject to the sanctions of section 7031, subdivisions (a) and (b),…