What do small businesses need to know about workers’ comp insurance in California?
More than a hundred years have passed since the first workers’ compensation law was enacted in the United States. After several generations of policy changes, it’s easy to feel lost among all the workers’ comp jargon, so here are the top 12 things every California small business owner should know about workers’ comp insurance in the Golden State.
*Data pulled from the State of California Department of Industrial Relations.
1. Like most trends in the U.S., California was an early adopter of the law. In fact, the state started requiring employers to carry workers’ comp insurance in 1913.
2. California’s workers’ comp program is “the single largest privatized social benefit system in the world, second only to Social Security in the delivery of medical and indemnity benefits.”
3. California law requires small business employers to carry workers’ comp insurance under California Labor Code Section 3700.
4. Workers’ comp benefits must be provided to full-time and part-time employees in California. In fact, workers don’t need written employment contracts to be considered employees, and the term “employee” can include legal and illegal immigrants, minors, and prisoners. Independent contractors and subcontractors may also be considered employees in some cases.
5. Sole proprietors, partners, and officers of closely held corporations are considered employees but may elect to be excluded from coverage.
6. Workers’ comp in California is a no-fault system, meaning that the employer agrees to pay regardless of fault. As a result, you can’t claim common law defenses like “assumption of risk,” the “fellow servant rule,” or “contributory negligence.”
7. In the last 15 years, California’s workers’ comp laws have been reformed considerably. Evidence-based medicine guidelines, mandatory utilization review process, and the repeal of vocational rehabilitation are just some of the reforms that disrupted the industry in the early 2000s. A decade later, Senate Bill 863 restructured the state’s workers’ comp system and increased injured worker benefits — netting more than $1 billion in savings.
8. California employers are required to give a Workers’ Compensation brochure to all new employees at the time of hire, or no later than the end of the first pay period. Failure to do so can result in lawsuits and fines.
9. One-time accidents are the most common type of work injury in California, with slips-and-falls being the most common type of workplace injury, followed by being hit by an object (Ouch!).
10. Repetitive stress injuries are the second-most common type of injury in California workplaces. These include injuries to backs, hands, and arms.
11. Small businesses looking to save on workers’ comp policy costs can implement formal return-to-work programs to help injured employees return to work in limited but productive capacities. These programs lower costs by reducing large claims for lost wages.
12. California’s Division of Workers’ Compensation holds the largest workers’ comp educational conference in the state. Attendees learn about the workers’ comp topics confronting claims administrators, medical providers, attorneys, and rehabilitation counselors.
Extra Credit: Pie Insurance offers the newest workers’ comp insurance option for California’s small businesses. We offer workers’ comp insurance exclusively for small business owners. Our easy online process enables small business owners to get a workers’ comp quote in as little as two minutes.