What is the consequence described for a business that employs someone without workers' comp insurance?

• A. A civil penalty only
• B. No penalty if the employee is a family member
• C. A misdemeanor with arrest, fines, and potential license loss
• D. Only a warning

Answer: (C)

Not having workers’ compensation coverage for employees is illegal in California and carries serious penalties. Employers are required to secure workers’ comp insurance for all workers, and when a business hires someone without that coverage, the conduct is treated as a misdemeanor. That means the business (and often responsible officers) can face arrest, fines, and the potential loss of the license to operate. This reflects the state’s goal of ensuring workers are protected and that businesses actually carry the required insurance.

Civil penalties or warnings alone aren’t the full story here, and there isn’t an automatic exemption just because the employee might be a family member. The law treats failure to secure coverage as criminal misconduct with possible license impact, hence the stronger consequence described.