Workers' compensation in California is a system that provides insurance benefits to injured or ill employees because of their jobs. In California, most employers are required by law to carry workers' compensation California insurance, which covers employees' medical expenses and some lost wages due to work-related injuries, illnesses, or deaths. In return, your employees give up their right to sue the employer or such incidents. The California Division of Workers' Compensation administers the system, resolving disputes and enforcing regulations.
Workers' Compensation California laws
In California, all employers with one or more employees must carry workers' compensation insurance. Your employer must report any claims to their insurance company within five days of knowing about an injury. Failure to do so can result in penalties.
Most California businesses with at least one part-time or full-time employee must obtain workers' compensation coverage. The definition of employee is broad, encompassing both written and implied employment arrangements, whether legal or illegal.
Some individuals are exempt from the workers' comp requirement, such as sole proprietors who choose to forgo coverage, executive officers and directors who fully own the business, and LLC members who don't actively work. Independent contractors are also not required to be covered.
Businesses can determine if a worker is an employee or an independent contractor using the ABC test outlined in California Assembly Bill 5.
When your employee is injured, you must provide them with a claim form within one working day of knowing about the injury. You are prohibited from retaliating against employees for filing a claim. This includes threats, unfair treatment, discipline, or termination.
Injured employees eligible for benefits include full-time, part-time, and temporary workers. Independent contractors are generally not eligible. Your employees can choose their own treating physician for work injuries. That physician then becomes the primary doctor for the claim.
The California Division of Workers' Compensation (DWC) administers the workers' compensation California system. The DWC oversees the adjudication of workers' compensation claims and offers services and resources to help injured workers navigate the system and obtain necessary medical care. DWC's mission is to minimize the adverse impact of work-related injuries on California employees and employers.
California businesses can obtain workers' compensation California insurance from private insurers or the state fund. Failing to carry the required workers' compensation California insurance violates California Labor Code 3700.5 . You can face fines up to $100,000, imprisonment of up to one year, or a $10,000 State penalty fine.
Related: What is Workers Compensation?
Types of compensation offered by the Workers' Compensation California
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The workers' compensation California insurance offers several benefits to injured workers, including:
Medical benefits: Workers' compensation in California covers all reasonable and necessary medical treatment related to work injury. This includes doctor visits, medications, therapy, hospital stays, surgery, and medical devices. There are no copays or deductibles.
Temporary disability benefits: If the injury prevents the employee from working, temporary disability benefits are payable at a percentage of the employee's pre-injury wage. These continue until the employee can return to work or reaches maximum medical improvement.
There are two types of temporary disability benefits:
- Temporary total disability: Paid when the worker cannot work in any capacity during recovery.
- Temporary partial disability, also called loss of wages temporary disability: Is paid when the doctor releases the worker to return to work but only for limited hours. This may apply if the employer cannot accommodate full-time work within the employee's medical restrictions. If partial work is possible, the workday must be adjusted accordingly.
Related: Workplace Injury Management: Role of HR
Temporary disability benefits typically pay two-thirds of the worker's lost wages, up to a maximum weekly payment set by law. Currently, the maximum weekly benefit for lost wages is $1,251.38.
The minimum weekly payment is $290, which varies yearly based on the state's average salary.
Permanent disability benefits: If the employee sustains a permanent impairment or loss of bodily function due to the work injury, permanent disability benefits are payable. The amount depends on the level of impairment as determined by the state.
Workers who sustain permanent injuries or Functional Loss due to work accidents may be eligible for Permanent Disability benefits under Workers' Compensation California. This can help compensate for:
- Reduced future earning capacity caused by the injuries
- Regular payments to cover a portion of lost wages for the duration of the disability
- Continued limited medical benefits after starting to receive disability payments
Related: Workers' Compensation in Massachusetts
There are two main types of permanent disability benefits:
Partial permanent disability: For workers with a disability rating under 100%, they receive a set number of weekly payments based on their disability rating. Higher ratings result in more weeks of payments and larger amounts.
Total permanent disability: For workers rated at 100% disability, they receive weekly payments for life at a rate based on their prior temporary disability benefits.
For very severe disabilities, from 70% to 99%, workers may qualify for a lifetime pension. After receiving the allotted weeks of payments, they also receive an additional pension award for life to compensate for their high level of disability.
Supplemental job displacement benefits: If the employee cannot return to their former job due to the injury, they may be paid to cover the cost of retraining and job searching. The supplemental coupon equals $ 6,000 total, regardless of the level of permanent disability.
Death benefits: If a work injury results in the employee's death, benefits are payable to eligible survivors. These include a lump sum payment and monthly payments to qualified dependents.
Related: 5 Industries That Are Thriving in California: Which Could Be Perfect for You?
Filing a Workers' Compensation Claim in California
Below are the steps you can use to help an employee file a workers' compensation California claim:
Offer the claim form: Employers must provide or mail the initial claim form to injured workers within one business day of learning about their injury or illness. Employees who do not receive a form can download one from the state workers' compensation agency website or contact the associated Information and Assistance Unit.
Encourage employees to fill out the form: Employees should complete the employee section and return it to their employer promptly. Employers should remind injured workers to sign, date, and retain a copy of the form for their records.
Submit the form: Employers must submit it to their insurance company and the state workers' compensation agency. In some cases, workers may also need to file an official claim form directly with the state workers' compensation agency.
Follow up: Employers should check in with injured workers and the state workers' compensation agency to confirm the claim's processing.
Related: FMLA Leave in California
Who pays for Workers' Compensation Insurance?
In California, employers are solely responsible for paying the costs of workers' compensation California insurance, which is required by Workers' compensation California law. Employers pay insurance premiums based on factors like their industry, claims history, and number of employees. Premiums vary widely by industry.
Related: Cost of Employee Health Insurance: What you need to know
How Long Can a Worker's Compensation California Case Last For?
Suppose your employee cannot work for at least a week due to the injury. In that case, they become eligible for temporary disability benefits starting on the eighth day after the injury.
Suppose your employee is unable to work for more than two weeks. In that case, they can receive retroactive benefits for the first seven days with proper medical documentation showing they could not work during that time.
If your employee continues to receive temporary disability benefits, typically equal to 2/3 of their average weekly wage, for as long as they cannot work due to the injury. In some cases where disputes arise, the claim and benefit payments can take longer to resolve.
Conclusion
The workers' compensation California insurance system aims to strike a balance between providing timely relief for injured workers, requiring businesses to carry insurance, and minimizing costly litigation. The workers' compensation California system strives to fairly compensate employees for wages lost and medical costs due to job injuries or work-related illnesses. With continued improvements, the workers' compensation California system can better achieve its goals of supporting the health and financial stability of California's workforce.