Key Takeaways
- California workers' compensation is mandatory for all employers with one or more employees
- California has one of the highest workers' compensation rates in the nation due to high benefits
- The Workers' Compensation Insurance Rating Bureau (WCIRB) calculates advisory pure premium rates
- California prohibits employers from requiring employees to waive workers' comp rights
- The state has specific penalties for uninsured employers including criminal prosecution
California Workers' Compensation Insurance
California has one of the most comprehensive workers' compensation systems in the nation.
Mandatory Coverage
California requires workers' compensation for all employers with one or more employees:
Who Must Be Covered
| Worker Type | Coverage Required |
|---|---|
| Full-time employees | Yes |
| Part-time employees | Yes |
| Seasonal workers | Yes |
| Domestic workers (52+ hours/week) | Yes |
| Independent contractors | Generally no (but classification matters) |
Exceptions
Limited exceptions exist for:
- Sole proprietors (optional for themselves)
- Partners (optional for themselves)
- Corporate officers (may elect exemption)
Obtaining Coverage
California employers have two options for workers' comp coverage:
Coverage Options
| Option | Description |
|---|---|
| Private Insurance | Purchase from admitted insurer |
| State Compensation Insurance Fund (State Fund) | California's public insurer of last resort |
| Self-Insurance | Large employers may self-insure with CDI approval |
State Fund
The State Compensation Insurance Fund is:
- A public enterprise fund (not tax-supported)
- Required to accept all applicants
- Competitive with private market
- The largest workers' comp carrier in California
Rate Setting
California uses an advisory pure premium rate system:
WCIRB Role
The Workers' Compensation Insurance Rating Bureau (WCIRB):
- Calculates advisory pure premium rates
- Maintains class codes and experience mods
- Collects loss data from insurers
- Files advisory rates with CDI
Insurer Rate Filings
- Insurers file their own rates with CDI
- Must be actuarially justified
- Competition exists despite rate regulation
- Experience modification affects individual employer rates
Benefits
California workers' comp provides comprehensive benefits:
Benefit Types
| Benefit | Description |
|---|---|
| Medical Care | All reasonable medical treatment |
| Temporary Disability | 2/3 of wages (up to weekly max) |
| Permanent Disability | Based on impairment rating |
| Supplemental Job Displacement | Voucher for retraining |
| Death Benefits | To dependents |
Benefit Levels
California has among the highest benefit levels in the nation:
- Higher temporary disability maximums
- More generous permanent disability schedules
- Comprehensive medical treatment guidelines
Penalties for Non-Compliance
California has severe penalties for uninsured employers:
| Penalty | Details |
|---|---|
| Civil Penalty | Up to $100,000 |
| Criminal Prosecution | Misdemeanor or felony |
| Stop Work Order | Can shut down business |
| Personal Liability | Employer personally liable for claims |
| Double Damages | Employee can sue for double damages |
Exam Tip: California takes workers' comp compliance very seriously. Penalties include both civil and criminal consequences.
Which entity sets advisory pure premium rates for California workers' compensation?
What is the maximum civil penalty for a California employer operating without workers' compensation insurance?