How Workers’ Comp Works for Employees & Employers in California

Attribution: Workers Compensation Law by  CC BY-SA 3.0   Nick Youngson  /  Alpha Stock Images

Attribution: Workers Compensation Law by CC BY-SA 3.0 Nick Youngson / Alpha Stock Images

No matter how safe a jobsite is, accidents happen. A truck driver could easily dislocate his shoulder carrying a heavy load, or a nurse could hurt her back lifting a patient. It’s not uncommon for a construction worker to be hit and injured by a falling object. Slips, trips, and falls, muscle strains, cuts and lacerations, repetitive stress injuries, and exposure to toxic substances put all employees in danger of injury, regardless of occupation.

The dangers present on every jobsite also put employers at risk. However, the risk for employers is less physical than financial. If a worker is hurt on the job, he or she could file a lawsuit against the manager or owner of the company for the injury. This could lead to a messy and expensive legal battle for both parties. That’s why workers’ compensation insurance exists. The workers’ comp system is designed to protect both employees and their employers from the consequences of a job-related injury or illness.

Workers’ Compensation for Employers in California

In California, all employers are required by law to have workers' compensation insurance. Many business owners believe that their general liability insurance covers workers’ comp claims, but this isn’t true. General liability only covers bodily injury claims filed by a third party, not by people who work for the company and are hurt on the job. Employers must purchase workers’ compensation not only to comply with state law, but also to protect themselves from being sued.

An employer can buy workers’ comp insurance from either a private insurance company or through the State Compensation Insurance Fund (State Fund). While private insurance companies are regulated by the state, they can set their own prices and accept or reject customers. If a private company isn’t willing to provide coverage to a business, State Fund operates as the insurer of last resort.

The amount of coverage a business needs and how much it will pay for workers’ comp insurance depends on several factors: a company’s industry classification, the number of employees, what type of work they do, history of work-related injuries, payroll, and other considerations. A commercial broker or agent can help a business purchase workers’ comp insurance from a licensed insurance company and provide information on State Fund as well as self-insurance.

If an employee is hurt on the job, the employer is required to provide a workers’ compensation claim form within one working day of the reported injury. It’s an employer’s duty to complete the form and return it to the employee within one working day of receipt. Next, the employer should forward the claim form, along with his or her report of the accident, to the claims administrator for processing. Within one working day of receiving an employee’s claim, an employer must authorize up to $10,000 in appropriate medical treatment.

After a doctor evaluates the injured employee, the physician will send a report to the claims administrator regarding the worker’s medical condition. This will determine whether or not the employee can return to work. If the employee can return to work, the doctor will specify if the worker will need changes to his or her schedule, assignments, equipment, or other working conditions. Any work an employer assigns to an employee must meet these restrictions.

Remember, not having workers’ compensation insurance is a criminal offense. It’s a misdemeanor punishable by either a fine of at least $10,000 or imprisonment in county jail for up to a year, or both. The state of California also issues penalties of up to $100,000 against illegally uninsured employers. Plus, if an employee gets hurt or sick at work and an employer is not insured, the employer is responsible for paying all bills related to the injury or illness.

Workers’ Compensation for Employees in California

An employee should never have to pay out of pocket for an injury that occurs on the job or because of work. Employers are required by law to pay for workers’ compensation benefits that will cover an injured worker’s medical bills as well as a portion of the employee’s lost income. The injury or illness could be due to a one-time accident, such as electric shock, or repeated exposure, like losing hearing due to extremely loud work conditions.

If a worker gets hurt on the job, he or she should report the injury right away. A worker that does not report an incident within 30 days may lose the right to collect workers’ comp benefits. The next step is to seek emergency medical treatment, if necessary. An injured worker should be sure to tell his or her healthcare provider that the injury is work-related. As soon as the worker is able, he or she should get a workers’ comp claim form from the employer, fill it out, and return it. It’s the employer’s responsibility to forward the completed form to the claims administrator.

Within one working day of an employee reporting an injury, his or her employer is required to authorize up to $10,000 in relevant and appropriate medical treatment while the administrator reviews the claim. Once approved, the workers’ comp insurance company will pay for all medical expenses related to the injury and temporary or permanent disability benefits. If an injury prevents a worker from returning to his or her job, he or she will receive a voucher to help pay for retraining for a different job. If a worker dies from a work-related injury or illness, workers’ compensation will make payments to the employee’s dependents and pay up to $10,000 in reasonable burial expenses.

Sole Proprietor Workers’ Compensation Waiver California

If you have been hired by a company that claims it does not need workers’ compensation because of the sole proprietor waiver, this may not be true. California law requires all employers to have workers’ compensation insurance for their staff, even if they only hire one person. However, companies do not have to extend workers’ compensation coverage to freelancers, consultants, or independent contractors. Unlike employees, these types of workers are exempt from workers’ compensation benefits in California.

Sometimes, companies improperly classify employees as independent contractors to avoid the responsibility of paying for a hurt worker’s injuries. If your employer has discouraged you from filing for workers’ comp because of the sole proprietor workers’ compensation waiver or if you believe you have been misclassified as an independent contractor, a workers’ comp attorney can help you get the benefits you deserve.

Workers Compensation California Forms

If you are an employer, your workers’ compensation claims administrator will provide claim forms in the quantities you need. If you are an employee and have not received a claim form from your employer, workers’ compensation claim forms can be downloaded from the Department of Workers’ Compensation website.

Workers’ Compensation Settlements in California

A workers’ compensation settlement is an agreement reached between an injured employee and an insurance company. A Compromise and Release settles the body parts injured, temporary disability, permanent disability, future medical care, and the right to claim additional disability. Rather than breaking down the value of each issue, the insurance company pays the worker on the total value of the settlement in one lump sum.

When all parties have signed the settlement, a workers' compensation judge must approve it. This can take up to two weeks. Once it is approved, the workers’ compensation insurance company has up to 30 days to mail the injured worker a check. If an employee hired a workers’ comp attorney, the employee will pay the legal fees from the settlement.

California Workers’ Comp Common Questions ⬇️

1. Who Is Exempt From Workers’ Compensation Insurance in California?

No employer is exempt from workers’ compensation insurance in California. Even if a business only employs one person, the company is still required to pay for workers’ comp insurance.

2. What Is the Penalty for Not Having Workers’ Compensation Insurance in California?

Employers who do not carry workers’ compensation insurance in California face a fine of no less than $10,000 or imprisonment in county jail for up to a year, or both. The state of California also issues penalties of up to $100,000 against illegally uninsured employers.

3. Who Can Be Excluded From Workers’ Compensation in California?

Certain types of workers are excluded from workers’ compensation in California and cannot file a claim for workers’ comp benefits:

  • Business Owners

  • Sole Proprietors

  • Volunteers

  • Freelancers

  • Consultants

  • Independent Contractors

Workers’ Compensation Attorneys in San Diego with Free Consultations

At the Law Office of Gerald Brody & Associates, our experienced workers’ comp attorneys are here to answer any additional questions you have about workers’ compensation in California. Give us a call at (619) 528-9800 to schedule a free consultation.