Workers Compensation in California

An accident on the job can happen at any time, even if employees are following safety rules and best practices. Without workers’ compensation coverage, an injured employee could file a lawsuit against the employer, and practice owners may find themselves liable for the settlement. 

Workers’ compensation insurance provides an exclusive remedy for injured employees, meaning that under most circumstances, a covered employer cannot be sued for causing the injury or illness. As an employer, having workers’ compensation coverage is not only a legal requirement in most states, but it also offers peace of mind. Read on to learn more about your role as an employer for workers’ compensation and how it can affect your bottom line in the future.

Workers’ Compensation in a Nutshell

A recent Finvisor article defines workers’ compensation as:

A non-negotiable benefit, primarily state-based. In nearly all cases it is compulsory for employers to offer, with many optional policies extending beyond the compulsory coverage. If employees are injured on the job, workers’ compensation covers the company’s obligations.

Workers’ compensation benefits are meant to financially assist employees recovering from a work-related injury. One of the earliest examples of a workers’ compensation system dates back to 2050 B.C. A law in Ancient Sumeria paid workers for their injuries. Similar laws were in place in ancient Greece, China and other parts of the world. In fact, under ancient Arab law, if an injured worker hurt their ear, they got an amount of money based on surface area injured.

The Role of the Employer

Although specific laws vary, most states require employers to carry workers’ compensation insurance. Without it, an employee who gets hurt or sick from their job wouldn’t get benefits to help them

The employer’s role is to make sure their workers’ compensation carrier is able to offer the best possible protection if an employee is injured on the job. This includes reporting all work-related injuries — no matter how insignificant the injury or illness may seem — and reporting the incident within the required time frame.

Workers’ compensation laws vary from state to state; however, employers are generally required to provide a workers’ compensation form to an employee within one business day of becoming aware of a work-related injury or illness. Visit the U.S. Department of Labor’s website for workers’ compensation laws specific to your state. 

What Should I Do if My Employee Gets Sick or Hurt on the Job?

In the typical workers’ compensation claim filed in California, benefits can be provided for 104 weeks or 2 years’ worth. The 104 weeks of benefits can be parceled out across 5 years, though, you do not need to use all 104 weeks consecutively. Certain severe work-related injuries – like third-degree burns and lung diseases – can validate up to 240 weeks of workers’ compensation benefits, which is a little more than 4 years and 6 months.

In California, if you are injured on the job, you are entitled to receive two-thirds of your pre-tax gross wage. This is set by state law and also has a maximum allowable amount. This amount is adjusted annually. There is also a minimum amount that is eligible to be paid. Because the maximum and minimum temporary disability payments are linked to the statewide average weekly wage, they’re adjusted each year.

Reporting Conditions and Workers’ Compensation Coverage Requirements

In California, failing to have workers’ compensation coverage is a criminal offense. If an employee gets injured or sick because of work and the employer is not insured, the employer is responsible for paying all the bills related to the illness or injury. The employee may also file a civil action against the employer in addition to filing a workers compensation claim.

Your business could either be on the hook for either or both of these punishments:

  • Imprisonment in the county jail for up to a year
  • A fine that’s up to double the amount of the workers’ compensation premium that would have covered the uninsured period

After an employee has been injured at work, or they discover they have a medical condition caused by workplace conditions, they must report the injury or illness to their employer right away. Employees must make it clear that you were hurt on the job. Some state laws simply say that you should give this notice immediately or as soon as practical, but most states give a more specific deadline, usually within 10 to 90 days. In many states, however, it won’t count against you if you didn’t make a written report, as long as your employer actually knew about the injury.

Protecting Your Small Business from a Workers’ Compensation Mishap

Mishandling a work-related injury claim could lead to severe consequences, including state penalties, personal liability and loss of exclusive remedy. Business owners who are unsure about their employer obligations should consult their insurance carrier to ensure they are following workers’ compensation laws. Fewer workers’ compensation claims mean less workplace disruption for your organization as employees may have shorter—or no—work separation due to an injury and don’t require formal health care which helps employers reduce workers’ compensation-related costs.

To learn more about what we do, or to request a quote, contact us at or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*



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