If you have employees in California, workers’ compensation insurance is not optional. It protects your team if they are injured on the job and protects your business from costly claims and penalties.
Is Workers’ Comp Required in California?
Yes. California law requires every employer to carry workers’ compensation insurance, even if you have only one employee, including part-time workers. Sole proprietors with no employees are generally not required to carry it for themselves, but many choose to.
What Workers’ Comp Covers
- Medical care for work-related injuries and illnesses.
- Temporary disability benefits while the employee cannot work.
- Permanent disability benefits when applicable.
- Supplemental job displacement benefits.
- Death benefits for dependents.
- Employer’s liability coverage in many policies.
Penalties for Not Having Coverage
Operating without workers’ comp in California can lead to stop orders that shut down your business, significant fines and personal liability for the full cost of an employee’s injury. It can also be a criminal offense.
How Premiums Are Calculated
Workers’ comp premiums are based mainly on:
- Your industry classification codes.
- Your payroll.
- Your claims history, reflected in your experience modification.
Keeping payroll records accurate and investing in workplace safety can help control costs over time.
Tips to Keep Workers’ Comp Costs Down
- Classify employees correctly.
- Create a written safety program and train your team.
- Report injuries promptly.
- Review your policy every year with your agent.
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