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Workers’ Compensation Insurance in California

Workers' Compensation Insurance in California

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If your business has employees in the state of California, you’ll need to make sure you adhere to California’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in California?

California requires all employers who have at least one employee to obtain Workers’ Compensation Insurance. In California, an “employee” is generally defined as someone who works part-time or full-time for an organization or individual and is not an independent contractor.

The California Workers’ Compensation Act (WCA) defines all of the requirements for Workers’ Comp in California, and the Division of Workers’ Compensation (DWC) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in California?

Almost all workers are covered under Workers’ Compensation in California. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.

The following are categories of employees that are eligible for Workers’ Comp coverage:

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in California, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

Temporary Total Disability Benefits

Temporary Partial Disability Benefits

Permanent Disability Benefits

Supplemental Job Displacement Benefits

Death Benefits

What are the penalties for breaking California Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WCA can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the WCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Purchase Coverage

Unpaid Compensation

Late or Unfiled Reports and Filings

How much does Workers’ Compensation Insurance cost in California?

According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in California was $1.83 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in California?

The claims process in California begins with the employee. If an employee suffers a work-related injury or illness, he or she must report the condition to a supervisor within 30 days. Any delays beyond 30 days may result in a denial of the claim.

The employer will have the employee fill out a claim form, and upon receiving a completed claim form, the employer will file the claim with their insurer. In addition, the employer is required to authorize medical treatment within one day of receiving the claim from the employee.

Within 14 days of filing a claim, the insurer will notify the employee as to the status of the claim. It will either be approved, denied, or held for further investigation. During the investigation period, the employee is eligible to receive medical treatment but generally no other benefits. The investigation can take up to 90 days to complete.

California Workers’ Compensation Insurance Resources

For more information on California Workers’ Compensation laws and requirements, please visit the following resources:

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