California Workers Compensation: Key Information & Tips

California Workers Compensation: Key Information & Tips

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Workers compensation benefits mean workers are protected if they become ill or injured as a direct result of their jobs. These benefits include medical care, physical therapy, disability payments, lost wages and death benefits.

California adopted workers compensation laws in the 1910s along with most other states. Workers comp is based on a no-fault system, which means that an injured or ill employee does not need to prove that the injury or illness was someone else’s fault in order to receive workers compensation benefits.

Each state has its own workers compensation insurance laws. If you run a business in California, here’s what to know.

Workers Comp Is Required in California

All California employers must provide workers compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, the business must provide workers compensation coverage for each of those employees.

In California, workers compensation benefits cover all workers including part-time employees.

Failure to have workers compensation insurance in California is a criminal offense.

When an employer cancels a workers compensation policy in order to get insurance from another company or to close the business, the insurance company will return a pro-rated refund amount to the employer.

California Workers Compensation Benefits

There are five basic types of workers compensation benefits in California:

  • Medical care
  • Temporary disability benefits
  • Permanent disability benefits
  • Supplemental job displacement benefits
  • Death benefits
  • Where to Get Workers Comp Insurance in California

    California employers must purchase workers compensation insurance from either a licensed insurance company or through California’s State Compensation Insurance Fund.

    Information on insurance companies licensed to sell workers compensation insurance in California and an online rate comparison of the top 50 workers compensation insurers in California can be found on the California Department of Insurance website.

    The State Compensation Insurance Fund sells workers compensation coverage on a non-profit basis. This fund competes with private insurance companies for workers compensation coverage for employers. The State Compensation Insurance Fund also operates as an insurer of last resort when private insurance companies are not willing to offer workers comp to a business.

    10 Largest Workers Comp Insurance Companies in California California Workers Comp Insurance Cost

    The cost of workers compensation insurance will vary among insurance companies. Shop around for the company that best meets your needs. Cost is one thing to consider but you’ll also want to keep in mind the services provided, ease of access to claims adjusters and how familiar the insurance company is with your industry.

    How much you’ll pay for workers compensation insurance will be determined based on factors such as the classification of your industry, your company’s past history of workers comp claims and your payroll.

    The cost of workers comp insurance in California ranges from 40 cents per $100 in payroll for a low-risk clerical job to $33.57 per $100 in payroll for a high-risk labor job, according to Cerity.

    When to Report a Workers Compensation Claim

    As soon as you can report the injury or illness to your employer. You may lose your rights to workers comp benefits if you don’t give your employer written notice within 30 days.

    Employers should file a claim within one working day of finding out about an employee’s illness or injury.

    Workers Compensation Posting Requirements For Employers

    California employers must place a poster in the work site giving information on the company’s workers compensation coverage and where to get medical care for work injuries.

    Failure to post this notice is a misdemeanor that can result in a civil penalty of up to $7,000 per violation.

    Employers also must provide newly hired employees with a workers compensation pamphlet explaining employee rights and responsibilities.

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    What Happens If You Don’t Purchase Workers Compensation in California

    Employers that fail to purchase workers compensation insurance are in violation of the California Labor Code. The Division of Labor Standards Enforcement could issue a stop order against any employer that is uninsured for workers comp. A stop order closes down business operations until workers compensation insurance can be purchased. The Division of Labor Standards Enforcement can also assess fines.

    Failing to have workers compensation coverage is a criminal offense. Either or both of these punishments may apply:

  • Imprisonment in the county jail for up to a year
  • A fine that’s up to double the amount of the workers compensation premium that would have covered the uninsured period
  • If an employee gets injured or sick because of work and the employer is not insured, the employer is responsible for paying all the bills related to the illness or injury. The employee may also file a civil action against the employer in addition to filing a workers compensation claim.

    Where to Report California Workers Comp Claim Issues

    The Division of Workers Compensation assists employers and employees with workers compensation claims. If you have a question or issue, contact the Information and Assistance Unit of the Division of Workers Compensation.

    The California Department of Insurance also deals with workers compensation issues such as:

  • Audit disputes
  • Broker-agent handling
  • Cancellation and nonrenewal notices
  • Classification disputes
  • Dividend plans
  • Failure to provide loss history reports
  • Insurance fraud
  • Insurer compliance
  • Rating errors
  • If you have any of these issues regarding your worker compensation coverage, reach out to the California Department of Insurance for assistance.

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