Workers’ Compensation Insurance in California is a business necessity that safeguards your employees while shielding your company from potential financial pitfalls. Look at it as a safety net meant to hold your workforce when unforeseen circumstances arise, like job-related injuries or illnesses.

This comprehensive guide will explain the intricacies of workers compensation insurance in California, detailing what it covers and the legal requirements for coverage.

Coverage of Workers’ Compensation Per California Laws

Medical Treatment

This facilitates the employee’s recovery and returns to work, covering costs like physician visits, hospital stays, physical therapy, lab tests, medicines, and travel costs.

Permanent Disability Benefits

If a doctor diagnoses an employee with an injury from which they can’t recover fully, they may be eligible for long-term wage replacement.

Temporary Disability Payments

If an injury prevents an employee from performing their usual job while they recover, these payments can supplement their lost income.

Supplemental Job Displacement Vouchers

These cover retraining costs if the employee can’t resume their original job post-recovery.

Workers’ Compensation Law for Employers in California

Depending on the complexities of the case, business owners who don’t comply with California’s workers’ compensation laws can face one year in jail, a $10,000 fine, or a state penalty of $100,000. To avoid unnecessary hefty fines, businesses must comply with the workers’ compensation law in California by:

  • Securing workers’ compensation coverage.
  • Letting new workers know they’re covered by workers’ compensation insurance.
  • Displaying a banner at work detailing workers’ comp coverage and where to find medical help for job-related injuries and illnesses.

That said, while investing in workers’ compensation insurance, businesses should compare quotes from multiple insurers before settling on a policy. While cost is a significant factor, other considerations like the insurer’s familiarity with the industry, the services provided, and the accessibility of their claims adjusters should also influence the decision.

Settling Workers’ Compensation Disputes

As per the statute of limitations in the Golden State, an employee has up to a year from the date they sustained the injury to file a claim. Bear in mind that only the injuries sustained as a result of work-related causes are deemed eligible for compensation.

That said, while workers’ compensation claims tend to get resolved without any issues, disputes often arise that see the claim go to trial or have the parties agree on a settlement beforehand through either of these forms:

  • Compromise and Release: This settlement sees the injured worker agree to a one-time payment, resolving the workers’ compensation claim.
  • Stipulated Findings and Awards: This settlement is preferred if the injured party requires medical care in the future due to a permanent disability and sees the employer pay for ongoing treatments.

Are there any exemptions?

Certain individuals fall under the workers’ compensation exemption in California, including:

  • Sole proprietors, who can choose if or not to invest in workers comp insurance.
  • Executive directors who own 100% of the business.
  • LLC members not operating in the business.

Independent contractors are also not required to be included in workers’ compensation coverage. You can use the ABC test explained in California Assembly Bill 5 to know if a worker is classified as an employee or an independent contractor.

In Conclusion

Understanding how workers’ compensation insurance works in California is crucial for both employers and employees as it ensures compliance with state laws and also guarantees the safety of all parties in the event of workplace injuries or illnesses. With the information provided in this column, navigating the complexities of workers’ comp insurance in California will be a breeze.