State Spotlight: California Workers’ Compensation – Common Questions
Small businesses in California employ half, or 6.5 million, of the state’s private workforce, and account for 99.2 percent of all employers in the state.1 Like most states, California employers are required to carry workers’ compensation insurance to cover medical expenses and wage replacement costs should a worker become injured or ill on the job.2 Workers’ compensation insurance also helps protect business owners from potential lawsuits should an employee get sick or hurt while working.
Here are answers to five common questions about workers’ compensation insurance in California.3
1. What do California’s workers’ compensation insurance laws require?
All California businesses with at least one employee are required to carry workers’ compensation insurance.
Failure to have workers’ compensation coverage is a criminal offense – a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. California issues penalties of up to $100,000 against illegally uninsured employers.4
If you have a work-related injury or illness and your employer is not insured, your employer is responsible for paying all bills related to your injury or illness.
California requires that all businesses provide workers with information on their workers’ compensation benefits, as well as their right to work in a safe environment. Employers are required to post this information in places where all employees can see it. The State of California Department of Industrial Relations provides an online poster of this information at no charge.5 Failure to post this notice is a misdemeanor that can result in a civil penalty of up to $7,000 per violation.6
2. What happens if an employee gets sick or hurt on the job?
If an employee gets sick or hurt at work, the employer must provide immediate, appropriate, medical care. The employer must also provide him or her with a workers’ compensation claim form within one business day after the employer is notified of the incident.7 The form includes sections for the injured employee and for the employer to complete.
3. What benefits does workers’ compensation provide?
Workers’ compensation may provide the following benefits to workers who become ill or injured on the job as allowed under the California Workers’ Compensation code:
- Prompt, effective medical treatment
- Temporary disability benefits if an employee is unable to work while recovering
- Permanent disability benefits if an employee does not fully recover
- Supplemental job displacement benefits to help pay for retraining or skills enhancement if an employee cannot return to work
- Death benefits paid to an employee’s spouse, children or dependents, if needed
4. How much does workers’ compensation cost?
Workers’ compensation insurance is regulated by the state, and premium costs vary. Many factors determine a business’s workers’ compensation premium, including its risk classification rate (which varies from state to state), total payroll, the employer’s claims history and any credits or discounts.
5. How can California business owners select the best workers’ compensation carrier?
Employers should look for an insurance provider that has experience in their industry and experience in California. Other important services to look for include loss control support, an anti-fraud program, a network of care partners, return-to-work support, efficient claim handling, flexible payment options and online self-service capabilities such as updating policy information, scheduling automatic payments and downloading claims history reports (aka loss runs reports).
For more information on California workers’ compensation requirements, including resources for both employers and employees, consult the State of California Department of Industrial Relations or EMPLOYERS® today.8