Domestic Referral Agencies in California: Interview with Attorney Susan Zeme
- Diem Martin
- Feb 16, 2020
- 2 min read
Updated: Apr 14
If you’re operating a cleaning referral agency in California, compliance matters.
And it can feel confusing.
There are:
State laws
Federal guidelines
Industry-specific rules
In this interview, California employment attorney Susan Zeme breaks down how Domestic Referral Agencies (DRAs) operate within California law.
This is not general advice for all states — this is specific to California.
Who This Is For
This is for you if:
You’re starting or running a referral agency in California
You’re unsure about compliance with independent contractor laws
You want to understand audit risk and how to operate properly
Watch the Interview
In this video, attorney Susan Zeme answers common questions about operating a compliant Domestic Referral Agency in California:
What This Interview Covers
Compliance & Classification
How federal (IRS) and California laws interact
Common conflicts in classifying independent contractors
Required filings (including DE542)
What services DRAs can and should refer out
Audits
What can trigger an audit
Who can audit your business
What auditors look for
Common mistakes referral agencies make
Potential costs and consequences
When to involve an attorney
Legal Representation
When you may need legal support beyond audits
Types of cases DRAs encounter
Whether attorneys can support clients outside California
Transitioning to the Referral Model
How to move from an employee-based cleaning business
Whether to keep or change your business entity
Risks to be aware of during transition
If you’re still deciding between models:👉 Cleaning Company vs Referral Agency
Subscriber Questions Answered
Are video interviews allowed?
Are electronic contracts valid?
Can you use non-solicitation or non-compete agreements?
What does California Civil Code actually require?
Is it true that 1099 models aren’t allowed in cleaning?
Important Notes
This interview was recorded in 2019 and does not address AB5 directly.
However, additional guidance has been provided through the California Coalition of Domestic Referral Agencies (CCDRA), including memos related to updated laws.
Helpful Resources
California Civil Code Sections 1812.500 – 1812.5095 outline the legal framework for operating a Domestic Referral Agency in California.
Why This Matters
Compliance isn’t something to guess your way through.
When your business is structured correctly:
You reduce risk
You operate with confidence
You avoid costly mistakes
If you’re still learning how to structure your agency properly:👉 Be Transparent. Let Clients Know You're a Referral Agency Working with Independent Cleaners
Want to Learn How This Model Works?
If you want a clear breakdown of how to start and structure a cleaning referral agency:
Ready to Build This Step-by-Step?
If you want the systems, structure, and guidance to build your agency the right way:
Want Personalized Help With This?
If you want help reviewing your structure or navigating your next steps:
Want to See How Others Are Doing This?
I share real experiences and discussions inside the community:
FAQ
Does this apply outside of California?
No. This interview is specific to California law.
Do I need an attorney to start?
Not always, but it’s helpful when dealing with compliance or audits.
Is the referral agency model legal in California?
Yes, when structured properly under the Domestic Referral Agency framework.
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