Information on California Workers’ Compensation Law for Business Employers
If you still have questions after going through the FAQs you can call 1-909-325-6032 for more information on California Workers Compensation. During normal business hours, local offices also always have someone available to help answer specific questions for you.
In this page, you can find information about California Workers Compensation Law coverage, including medical care, employer information, fraud report requirements and legal information about uninsured employers.
Understanding Workers Compensation Law Coverage:
Q: Do I need to obtain a workers’ compensation insurance plan?
A: Yes, all companies with at least one employee needs to have a workers’ compensation plan secured. Roofing professionals without any other employees still need to carry coverage to protect themselves in case of injury. If the company is located outside of the state, but employs California residents, it is possible the employer needs to sign up for a workers’ compensation insurance plan.
Q: I own a business solely with my spouse. We do not have any employees working for our company. Do I need to secure workers’ compensation anyway?
A: Unless you own a roofing company, obtaining workers’ compensation coverage is usually left up to your discretion. Sole owners must sign up for a plan upon hiring an employee, even for a temporary assignment, however. Since every situation is different, it is wise to speak with a legal representation to see if your company requires coverage.
Q: Does my workers’ compensation policy cover every employee, including the upper level management team?
A: Yes, with the exception of company owners, all employees need coverage through a workers’ compensation policy. Sole owners, however, can choose to forgo coverage for themselves. Since the California Labor Code indicates certain exceptions, it is important to speak with a legal representative or insurance agent about your company setup to identify the best way to obtain the right policy.
Q: Whom do I contact to set up a workers’ compensation insurance plan for my company?
A: Employers in California must go through an authorized insurance agent to secure a workers’ compensation plan for their company. Alternatively, employers can elect to become self-insured. Information about self insurance policies can be found through the Self Insurance Plans Web Page. Employers cannot go through the Division of Workers’ Compensation, however, as that entity doesn’t set up insurance policies or track employers and their insurance compliance records. Employers can find insurance agents through the Workers’ Compensation Insurance Rating Bureau.
Q: How can I sign up for a workers’ compensation plan?
A: Private insurance agencies throughout California employ licensed brokers who can legally sign up employers for workers’ compensation policies. You can ask your business associates for a recommendation to an agent or look up a list of providers through the California Department of Insurance site. Employers working with a trade association can often find coverage through that entity. If agents deny you coverage, you can sign up for a policy through the State Compensation Insurance Fund or contact the chamber of commerce for your area to obtain more information.
Q: How can I elect to obtain self-insurance rather than a workers’ compensation policy?
A: Companies must meet the state’s requirements to qualify for self-insurance. The requirements include a net worth of five million dollars and 500,000 dollars a year in profit. Furthermore, self-insured employers must put down a deposit to secure coverage with the state. As a result, this option usually only works for very large or successful companies. However, it is possible for a small company to band together with similar entities in their area for group coverage.
If you want more information on this process, talk to the Office of Self Insurance plans or your personal agent. After obtaining a self insurance plan, it is vital to choose between setting up a workers’ compensation policy and authorizing a third party to do so for you.
Q: What are the costs associated with workers’ compensation coverage?
A: To maintain coverage, you will need to pay a premium for your workers’ compensation policy. The premium amounts vary according to the broker you go through and your unique business situation. The state does not issue regulations on premium amounts, though the Workers’ Compensation Insurance Rating Bureau offers recommendations. All insurance agencies must list their rates with the California Department of Insurance to keep them public. Although premium costs are an important factor to weight when shopping for coverage, it is also vital to consider the services you receive from your insurance carrier. For example, your insurance agent should have a strong working knowledge of your industry to provide the perfect amount of coverage.
Q: What are the factors controlling monthly premium amounts for the coverage I selected?
A: Like most insurance policies, premiums reflect the amount of risk associated with your situation. Your company’s claim history, size and industry specifics greatly influence the amount you are charged per month. Furthermore, your insurance agent will see if you are eligible to sign up for group programs that reduce your cost in the long run, which can significantly lower your premium amount.
Exploring Employee Specifications:
Q: Can I charge employers for their part of the workers’ compensation policy?
A: No, you must pay your own workers’ compensation premiums and consider it a part of running the business. Requesting payment from employees is not only unethical, it may be illegal as well.
Q: Am I required to post information about workers’ compensation coverage for my employees?
A: Yes, as dictated in the California Labor Code (3550-3553) you must display a poster explaining coverage terms where your employees can see it. You can pin the poster in the break room or hallway where employees gather on a regular basis. Make sure to include a descriptive pamphlet about workers’ compensation coverage for your new hire packet.
The poster and pamphlet should explain how the coverage works in addition to best way to handle a workplace injury. You can be subject to a 7,000-dollar fine if you do not display this poster in an accessible area. Talk to your broker to determine if your poster and posting area meet the requirements to avoid penalty.
Q: How can I source claim paperwork to ready the company for employee illness or injury?
A: You can ask your insurance agency or government carrier to give you a stack of claim forms for future incidents. If you need one before the forms arrive in the mail, simply download one from the Division of Workers’ Compensation site – available from www.dwc.ca.gov.
Q: What is the appropriate way to handle my employees’ onsite injury or illness?
A: As an employer, you need to make sure your employee receives a claim form immediately after falling ill or injured from a workplace accident. Illness or injury resulting from a criminal act at the workplace requires the same course of action. You must file the claim and incident report with your workers’ compensation agent within 24 hours of the incident occurring. Make sure to provide your employee with a copy of the completed and submitted claim for their files.
Immediately authorize up to 10,000 dollars in medical coverage, so your employee can have their injury or illness treated in a timely manner. If your employee is well enough to come back to work, but not well enough to perform their regular job duties, provide light duty tasks during the recovery period.
Q: What are the best ways to ensure my employees receive proper care after a workplace injury or illness?
A: Although the claims administrator should maintain an open dialogue, sometimes employee care is lost in the fray. To compensate, regularly ask your employee about their recovery with the appropriate amount of concern. If your employee relays troubles with the process, do all you can to solve the issue in a timely manner.
Work with your employee to slowly return him or her to the normal job duties as they recover from the illness or injury. If your employee struggles with workers’ compensation rights and responsibilities, consider setting them up with an appointment at the Division of Workers’ Compensation office for an informative seminar.
Q: What are the recommendations for allowing ill or injured workers back on the job?
A: All injured workers must receive an exam from a physician to receive a medical recommendation concerning appropriate activity levels. Physicians may put a limit on lifting amounts or activity types to help facilitate a quick recovery or prevent further complications. All physician recommendations are forwarded to the claims administrator for review.
When allowing the employee back on the job, it is important to closely follow the doctor’s recommendations, especially concerning bending, lifting and stooping. You may also need to make adjustments to the employee’s work schedule and equipment during the recovery period. Sometimes, the employee must take an extended amount of time off, according to doctor’s orders, which you must adhere to until the work ban is lifted.
Q: How can I correctly follow work restrictions for employees’ under physician care?
A: Review the doctor’s recommendations alone and alongside your employees. Make adjustments as requested to ensure all on the job activities performed by the employee meet those restrictions. If you cannot successfully adhere to the doctor’s orders, you must allow your worker to take time off instead.
Q: How do I proceed if the doctor does not provide any restrictions for the ill or injured employee?
A: Employees released to work without any restrictions can return to their normal position and job duties without a problem. The severity of the injury or illness and length of the recovery period greatly influences when a return to work will occur. At that point, you must have the employee’s original position and pay open and available.
Q: What are the different types of work available to employees ready to come back on the job?
A: While adhering to the doctor’s orders, you can offer regular, modified and alternative work plans to your employee. The regular plans are just your employee’s normal position at the company with its associated job duties, travel requirements and compensation package.
The modified work plan gives the employee his or her old position back with a few changes that meet the doctor’s restriction requirements. The modified work must provide at least eighty-five percent of the prior compensation package.
The alternative work plan completely changes your employee’s job duties as a result of strict work restriction requirements. This plan must also provide at least eighty-five percent of the prior compensation package. Temporary changes are not suitable, as all of these return to work plans must last for at least twelve months.
With the exception of the regular work plan, you must allow your employee to take up to thirty days to accept the offer for employment. If the employee fails to take the job offer, he or she may not receive additional benefits and you can fill the open position permanently.
Learning About Medical Care
Q: What is the purpose of medical provider networks?
A: Insurance providers and self-insured networks maintain a comprehensive medical provider network for workers’ compensation claims. These providers are authorized to provide care to employees injured at work. The network includes general practitioners and specialists trained to provide care for a wide range of conditions. All employees injured on the job will receive care by doctors in the network unless their general practitioner was already authorized to provide care for onsite illnesses and injuries.
Q: What is the purpose of a health care organization?
A: Division of Workers’ Compensation authorizes physicians part of a health care organization to care for employees suffering from job related illnesses or injuries.
Q: How can my employees assign their general practitioner as a care provider for onsite injuries or illnesses?
A: Employees can only designate their doctor as their official workers compensation care provider if the physician is a M.D. or D.O. If the physician meets the required qualifications, employees can start the process by providing written documentation of their care request. The document must be dated for well before the injury or illness and include the doctor’s complete contact information. In addition, the employee must hold insurance coverage for all other medical care needs beside the ones related to on the job incidents. The doctor must also authorize the care provider request well before a workplace injury or illness occurs.
You can obtain the forms required for this process by going to the Division of Workers’ Compensation site.
Q: How do I allow employees to receive treatment from their own chiropractor or acupuncturist?
A: Employees can only visit their own chiropractor or acupuncturist if your company is not set up with a medical provider network. If you do not have an assigned network, your employee can complete the process above for this type of care provider as well. However, the employee must use the correct request form to make the request before the workplace injury or illness incident date.
Q: Can I use cash to pay for medical care while running a family business?
A: No, you are legally required to follow the designated workers’ compensation claim steps for all injured employees, family or not. Paying for medical care in cash is actually illegal.
Learning About Fraud Reports
Q: How can I handle possibly fraudulent workers’ compensation claims?
A: You can discuss the signs of fraud with the claims administrator assigned to the case. Provide a written log of incidents and statements that support your claims. You may also need to provide a list of witnesses who can support your claims. You must follow up with the claims administrator as requested through direct or written correspondence.
Q: How do I respond to claims about employees never listed on my roster?
A: If you receive a hearing notice about someone you did not employ, alert your claims administrator at once. You should also send a letter regarding this situation to create a written record of the incident.
Q: How are workers’ compensation claims investigated and handled?
A: Since fraudulent workers’ compensation claims are a serious crime, the California Department of Insurance will perform a full investigation. There are many ways employees and employers can defraud the system, so it is important to look into each situation individually and check all of the facts.
Investigations often reveal employees who claim they injured themselves on the job when the incident actually occurred after work hours. In addition, improper job duty reports by employers often pop up during the fraud investigations. In order to avoid fraud charges, all statements made during the workers’ compensation claim process must be 100% truthful. Dishonest statements could result in prosecution leading to legal repercussions. You can learn more about fraud signs, reports and investigations by going to the California Department of Insurance website.
Exploring Being Illegally Uninsured
Q: How do officials handle incidents of employees working for employers who are illegally uninsured?
A: All companies with one or more employees are legally required to hold a suitable workers’ compensation policy. Employers who do not protect their employees with this coverage type face a criminal misdemeanor charge. The misdemeanor may result in 10,000 dollars worth of fines and more than twelve months in jail. Additional fines of up to 100,000 dollars an incident may also be assigned to employers who do not carry an adequate amount of coverage.
In addition, if employees of the illegally uninsured companies end up ill or injured from a workplace incident, the company must pay for all of the related medical bills during recovery. Furthermore, employees may file a civil lawsuit for additional forms of compensation if your company is not protected by a workers’ compensation policy. You can receive more information on how to protect yourself and your employees by speaking with officials at the Division of Workers’ Compensation.
Q: How does the Uninsured Employers’ Benefit Trust Fund work?
A: The Division of Workers’ Compensation set up the Uninsured Employer’s Benefit Trust Fund to help unprotected employees who are injured on the job. This department ensures employees receive the care they need for a full recovery while seeking out compensation from the responsible party. Employers must repay all of the care costs to prevent this department from filing liens and making other reimbursement efforts.
Q: Are illegally uninsured employers subject to any additional fines or punishments?
A: Yes, there are harsh penalties by avoiding workers’ compensation coverage required by law. The Division of Labor Standards Enforcement assesses the situation and assigns additional fines and punishments deemed necessary.
Furthermore, the company in question may be ordered to halt employee work until the employer secured a suitable policy. Employers who ignore this order may end up fined for 10,000 dollars and even spend a couple of months in jail. Fines for each person employed by the company could increase fines up to 100,000 more.
All compensated claims not covered by a workers’ compensation policy run the risk of an additional 10,000 fine per employee on top of all of the ones listed above. If the claim did not result in any compensation, the per employee fine drops down to 2,000 for each person on the payroll. This set of fines also has a maximum of 100,000 dollars.
Q: How do employers obtain proof of workers’ compensation coverage?
A: Insurance agencies maintain copies of all policies held by their clients. Employers can submit a request in person, by phone or through the mail to obtain a copy.
Q: How can employees report their employer for a lack of workers’ compensation protection?
A: The Division of Labor Standards Enforcement takes reports of employers who do not abide by these protective insurance acquisition laws. Employees can file an official report by going down to the office or sending in written correspondence. Employees must respond to all requests for supportive documents while the report is being investigated. Additional witnesses can often help enforcement agents build a suitable case against the illegally uninsured company. Employees have the right to stay anonymous at all times to protect their state of employment with the company in question.