Workers’ Compensation in California

Workers’ Compensation Insurance In California

Workers' compensation insurance is required for all California businesses that have employees.

Who needs workers’ comp insurance in California?

Every state has different requirements for workers’ compensation insurance. In California, workers’ compensation is mandatory for all employers, even if the company only has one employee. California law requires a business owner to carry workers’ comp insurance for employees who regularly work in California, even if the business is headquartered in another state.

This coverage isn’t just something you need to have, it’s something both you and your employees will appreciate having. This insurance gives benefits to your employees for work-related injuries or illnesses. The benefits can help:

  • Recover most of your employee’s lost wages while they recover
  • Cover your employee’s medical expenses
  • Provide your employee’s family with death benefits if they pass away

Workers’ comp insurance can help protect your employees if they:

  • Get sick after working with chemicals all day
  • Slip on ice outside your office and break their wrist
  • Get a needlestick injury while working on a patient

Even if you offer your employees health insurance coverage, it doesn’t cover a work-related injury or illness. To cover these claims and help protect your injured workers, you’ll need to have workers’ compensation insurance.

Is workers’ comp required for part-time employees?

How many hours an employee works does not affect their entitlement to workers’ compensation. It’s possible to get an independent contractor workers’ compensation waiver, but California law presumes anyone who works for an employer to be an employee.

If a claim is filed, the burden is on the employer to prove that someone is an independent contractor and not an employee.

Do you need workers’ compensation if you are self-employed?

Sole proprietors typically don't need workers’ compensation insurance unless they are a roofer or in some other hazardous line of work. In that occupation, you are required to carry workers’ comp for yourself, even if you don’t employ anyone else.

Whether or not you’re able to get workers’ compensation depends on the type of business and the ownership structure. Regardless, if you’re self-employed, it’s a good idea to check with the California Department of Industrial Relations to determine what your rights and liabilities are so that you can be sure that you’re properly insured.

How much does workers' compensation insurance cost in California?

Estimated employer rates for workers’ compensation in California are $1.70 per $100 in covered payroll. Your cost is based on a number of factors, including:

  • Payroll
  • Location
  • Number of employees
  • Industry and risk factors
  • Coverage limits
  • Claims history

Often, the employer, employee, and workers’ comp insurer can reach an agreement without difficulty. However, the California DWC Information and Assistance Unit can help settle disputes and guide the parties through litigation if an issue cannot be resolved any other way.

The California Department of Industrial Relations regulates workers’ comp insurance. California employers and workers can find resources for all aspects of workers’ compensation claims and laws through the agency’s Division of Workers’ Compensation (DWC).

What are the penalties for not having workers' comp insurance?

Failure to carry workers’ compensation insurance in California is a criminal offense. The penalties include:

A stop order is typically issued to the business, violation of which could result in a fine of $10,000 or more and imprisonment in county jail for up to one year.

The Uninsured Employer’s Benefit Trust Fund could file a lien against an employer’s property if it needs to pay benefits to an injured worker of an illegally uninsured employer.

A penalty assessed by the Division of Labor Standards Enforcement could be twice the amount the employer would have paid in premiums during the time of uninsurance or $1,500 per employee during the period of uninsurance.

If a worker is injured and the employer did not have workers’ comp, the employer could be liable for a penalty of $10,000 per employee at the time of injury if the case is compensable, or $2,000 per employee at the time of injury if that particular case was found to be non-compensable. The maximum penalty is $100,000.

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We know that getting workers’ comp insurance can seem complex. Our specialists can answer your questions and help you obtain workers’ compensation insurance. Get a workers' comp quote today or give us a call at 323-563-6146. Our team is here to help you get the coverage you need to protect your business.

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