In California, business owners can expect to pay, on average, $1.83 for every $100 of covered payroll. For example, a business with a total annual payroll of $100,000 will pay approximately $1,830 per year for workers’ compensation insurance. Or around $152 a month. This is only a rough estimate, since factors such as your location, the different rates for staffing types (laborers vs office workers), and your claims history can all have a significant impact on your rates.
Jump To:
What’s Covered
California’s Workers’ Compensation Death Benefits
California’s Workers’ Compensation Laws
How to Buy Workers’ Compensation Insurance
- How to Get the Most Savings
FAQs
Why Use EZ
One of the biggest factors in determining your rates for workers’ compensation insurance is your employees’ risk. In other words, the likelihood of a workplace injury occurring at your business. To assist insurers in determining risk exposure, you can use a variety of workers’ compensation class codes. This is important because it costs more to insure certain employees. For example, office employees may have lower workers’ compensation costs than those who work outside of your office and face more risks.
What’s Covered
If one of your employees is injured at work or becomes ill because of workplace conditions. Workers’ compensation in California can help pay for their medical bills. The weekly average wage of an employee is used to calculate workers’ compensation benefits. The type of claim determines the exact amount.
The most important thing that workers’ compensation does is offer coverage for your injured employee’s medical treatment. This would include doctor’s appointments, hospital stays, and surgical procedures. Following a return to work, an employee may need ongoing care. Such as follow-up appointments or extra surgeries; workers’ compensation will also cover these medical bills.
Additionally, if the incident causes permanent or temporary disability, the employee will receive compensation in the form of weekly or lump sum payments. If your employee suffers a temporary disability, their injury is preventing them from performing their regular job while they recover. They have a permanent disability if a doctor determines that they will not fully recover from their injury.
These two classifications fall into two subcategories:
- Temporary total disability (TTD) – These payments will be made if your employee is unable to work at all during their recovery.
- Temporary partial disability (TPD) – TPD payments will be made if your employee is still able to work, but with certain restrictions, such as requiring lighter duties or fewer hours. Even if your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
- Permanent total disability (PTD) – If the accident or illness leaves your employee unable to work at all, even after recovery, they will be eligible for PTD payments.
Permanent partial disability (PPD) – If an employee has permanent impairments but is able to work with those impairments, they will be eligible for PPD.
California’s Workers’ Compensation Death Benefits
In California, death benefits are an important part of workers’ compensation coverage. If an employee dies as a result of an illness or accident sustained at work, your workers’ comp policy will pay up to $10,000 in burial expenses, as well as death benefits to the deceased’s surviving dependents.
Death benefits continue until the youngest minor dependent reaches the age of 18 at the total temporary disability rate. Disabled dependents are paid for life.
The number of dependents your employee has determines the amount paid for death benefits:
- A single dependent: Up to $250,000
- Two or more dependents: Up to $290,000
- Three or more dependents: up to $320,000
- One total dependent, plus one or more partial dependents: $250,000 plus four times annual support for partial dependents (up to $290,000)
- One or more partial dependents: Up to $250,000 in annual support.
Coverage Requirements
California businesses with at least one part-time or full-time employee must have workers’ compensation insurance by law. The state defines an employee as anyone who works for a business.
Certain individuals, though, are exempt from workers’ compensation in California, including self-employed owners (who can choose to have insurance if they want), executive officers and directors if they own the entire company, and LLC members who are not employed by the business. You also do not need to include independent contractors in your workers’ compensation coverage.
California’s Workers’ Compensation Laws
Make sure you understand California’s workers’ compensation requirements, so you can ensure you’re complying with state law. To comply with the law, your business must do three things:
- Get workers’ compensation insurance to cover all required employees.
- Provide new hires with a workers’ compensation pamphlet or brochure.
- Put up a “Notice to Employees” poster around your workplace.
Additionally, you cannot make your employees pay for or offset the cost of workers’ compensation insurance in California. That means they will not have any deductions from their paycheck for coverage, unlike with health insurance or other benefits. In exchange, in most cases, your employees cannot sue you for any injuries or illnesses they may recieve from work.
How to Buy Workers’ Compensation Insurance
In California, there are three options for purchasing workers’ compensation insurance:
- Directly from a private insurance company – Private companies can approve or deny coverage, and they set their own rates. You can compare quotes from top-rated insurers with an EZ agent.
- Through the California State Fund – The California State Compensation Insurance Fund is a non-profit state entity that exists exclusively to sell workers’ compensation insurance. It actively competes for business with private insurers and effectively serves as the assigned risk pool for workers’ compensation insurance.
- Self-insuring your business – Employers who meet certain criteria, including having been in business for at least three years, can apply for approval from the Office of Self-Insurance Plans (OSIP). If you have permission to self-insure your business, you can then pay out-of-pocket for any claims that arise, instead of paying a monthly premium for workers’ comp.
Get free instant quotes by entering your zip code in the bar below. No hassle. No obligations.
How to Get the Most Savings
While the majority of workers’ comp costs are determined by factors beyond your control, there are still several ways to save money on. Firstly, setting up a safety program is a great way to reduce workplace-related injuries and the likelihood of claims. No matter what industry you’re in, it’s important to have safety procedures and standard operating procedures that can help combat against any hazards. When employees having training for safety protocols, it lessens the chance of injuries, effectively lowering your workers’ compensation costs, since fewer claims mean lower premiums.
Evaluating your claim history can also be helpful. Reviewing your claims history on a regular basis can help identify patterns, so you can correct any problems that seem to be behind frequent claims. Staying on top of potentially unsafe operations will help to reduce claims and keep your workers’ comp prices lower.
One of the best ways to save is by classifying your employees correctly. Each type of employee function has a classification, and these risk classifications affect the cost of your workers’ compensation. For example, you will pay more for a manual laborer than you will for an office worker. Not only that, but you can be fined if you are not classifying your employees correctly.
California Workers’ Compensation FAQS
Are you required to have workers’ compensation insurance in California?
You will be in violation of the California Labor Code if you do not have coverage. This means you could face a $10,000 fine, a one-year prison term, or a state fine of up to $100,000 if your business has employees and you do not carry workers’ comp insurance.
Additionally, if a worker submits a claim and you don’t have workers’ compensation, you could be liable for a $10,000 penalty per employee at the time of injury if the case is eligible for compensation. Or a $2,000 penalty per employee at the time of injury if the case is not eligible for compensation. The maximum punishment is $100,000.
How do workers’ compensation settlements work in California?
In most settlements, employees can choose between two types of workers’ compensation settlements, depending on their circumstances:
If an injured worker requires future medical care due to a permanent disability, they can opt for a Stipulated Findings and Award settlement. In this type of settlement, you will have to pay for your employee’s ongoing medical treatments.
A Compromise and Release settlement means that an injured worker accepts a one-time payment. The acceptance of the lump sum ends the workers’ compensation claim.
Workers’ compensation disputes can arise for a variety of reasons. Therefore, you and your employee may disagree about whether an injury occurred at work. Or an employee may have a problem with their workers’ compensation benefits.
Not every workers’ compensation claim is contested or goes to trial. If a case is contested, both parties can reach an agreement before it goes to trial.
What is the statute of limitations in California?
A worker who is injured in an accident at work has one year to file a workers’ compensation claim. Under certain conditions, California regulators may extend that time. If they are under 18 at the time of the accident, the one-year begins when they turn 18. If your employee suffers a repetitive strain injury, they have one year from the date they became aware of the injury. Or if the original injury leads to additional or further injury, a worker has up to five years from the date of injury to file a claim.
Why Use EZ
If you’re looking for workers’ compensation insurance, come to EZ. We pride ourselves on doing everything we can to give you an easy and stress-free shopping experience. We give our customers our full attention and offer fully personalized service and fast results. As soon as you fill out our form, you will receive free quotes from one of our agents. Who will understand your needs right from the start. We want to ensure that you make the best decision and get the best coverage for the best price. And the best part is that our services are completely free!
If you still have questions, feel free to give us a call at 877-670-3538. You can connect with a local insurance agent who can answer all of your questions, and help you find the workers’ compensation policy that works best for your business.
