Jackson's sprawling ranch in the central California foothills has been closed, at least temporarily, by an agent of the State Labor Commissioner after the office discovered that his worker's compensation policy had lapsed in January. Meanwhile Jackson has been fined $US169,000 ($A230,700).
"We went out there this morning and issued a stop order to the security guard at the front gate," state Department of Industrial Relations spokesman Dean Fryer said.
"We asked to be escorted in to meet management, but we were refused and turned away, so we gave the order to (the guard)."
Mr Fryer said local animal welfare officials had been asked to care for the inhabitants of Neverland's zoo.
He said Jackson could reopen the ranch if he obtains workers compensation insurance but may face legal action by the state if he fails to pay the back wages.
Jackson was cleared last June of criminal charges that he sexually abused a young boy at Neverland.
Since then has spent much of his time in Bahrain and was not at his ranch when authorities arrived. His representatives could not immediately be reached for comment.
The order prohibits Jackson from employing anyone at the 2,800-acre ranch until the insurance issues are resolved.
"So it looks like this would mean for Neverland Valley Ranch that they would be closed down."
Jackson was fined $US69,000 ($A94,191), or $US1,000 ($A1,365) for each employee, for allowing his insurance to lapse.
Earlier this week, authorities cited him for violating state labor law by failing to pay at least 30 employees since December of 2005.
A letter for that citation imposes a $US100,000 ($A136,509) fine and demands that he make good on $US306,000 ($A417,718) in unpaid wages.