Workers’ compensation is a system of no-fault insurance that provides medical and monetary benefits to employees or their survivors for work-related injuries, diseases and deaths.
The California Workers’ Compensation Act (WCA) defines employer responsibilities under the state’s workers’ compensation program. The Division of Workers’ Compensation (DWC), which is part of the California Department of Industrial Relations (DIR), monitors and enforces employers’ compliance with these requirements.
California employers are bound by three main workers' compensation requirements:
- Coverage requirements: Carrying an active workers' compensation insurance policy.
- Coverage notice requirements: Posting relevant signs and information where employees can see it.
- Injury reporting requirements: Promptly sharing details of any work-related employee injuries or illnesses to the state and insurance carrier.
1. Coverage Requirements
Almost all California employers must secure workers’ compensation coverage for their employees. Employers must meet the state's workers' compensation requirements if they one or more employees, regardless of whether the employees work full-time or part-time.
In general, the California's workers' compensation system defines an “employee” as any individual who works for another individual or organization and is not an independent contractor.
To satisfy the state's work comp coverage requirements, employers must either:
- Secure a workers’ compensation insurance policy from a private insurance company licensed to do business in California; or
- Obtain a self-insurance certification from the Office of Self Insurance Plans (OSIP).
2. Coverage Notice Requirements
Employers subject to the state's work comp laws must display workers' compensation posters in conspicuous locations within their employees’ workplaces. An employer’s posters must:
- State that the employer has workers’ compensation insurance coverage in compliance with state law;
- Be displayed in both English and Spanish; and
- Include specific information about the employee’s rights and obligations under the law.
The DWC provides a model notice that employers may use to satisfy these notice posting requirements. Failing to display this notice may subject an employer to criminal misdemeanor charges and may be considered evidence that the employer does not have the required coverage.
In addition, an employer that fails to post the notice does not have the right to choose the treating physician for any employee injuries that occur during the time the notice is not displayed.
Employers must also provide the information contained in the poster to new employees at the time of hiring (or by the end of their first pay period). New employees must also receive instructions on:
- How to obtain appropriate medical care for job-related injuries;
- The role and function of the primary treating physician; and
- How to obtain and submit the form the employee must use to notify the employer he or she wants to use a personal physician.
If an employer is insured, the insurance carrier is responsible for providing the employer with a notice that contains all the required information for new employees.
3. Injury Reporting Requirements
Employers also must report it any time an employee sustains a work-related condition that results in:
- Lost work time beyond the employee’s work shift at the time of injury; or
- Medical treatment beyond first aid.
For this purpose, “first aid” means any one-time treatment and any follow-up visit for observation of minor scratches, cuts, burns, splinters, or other minor industrial injuries that do not ordinarily require medical care. (This is still considered “first aid” even if it is provided by a medical professional.)
As of Jan. 1, 2017, workers' compensation insurance carriers are also required to report all work-related injuries, including those that involve only first aid with no lost work time, to the California Workers’ Compensation Insurance Rating Bureau (WCIRB). The WCIRB uses this information to, among other things, help determine an employer’s premium rates for workers' compensation insurance.
However, this change does not affect an employer’s injury-reporting obligations. An employer may chose, but is still not required, to report injuries that do not result in lost work time or treatment beyond first aid.
When an employee incurs medical expenses for first aid, the billing medical provider has an obligation to report the treatment to both the DIR and the employer’s insurance carrier. The medical provider’s report (or an employer’s voluntary report of a first-aid-only injury for which no medical expenses are incurred) is what triggers an insurance carrier’s new obligation to report the claim to the WCIRB under the new rule.
This reduces an insured employer’s incentive to pay medical bills for first-aid-only treatment out of pocket instead of allowing its workers' compensation insurance carrier to cover the expenses, because these types of claims can now affect an employer’s premium rates regardless of how the first-aid treatment expenses are paid
Within one working day after an employer receives notice or first obtains knowledge of an employee’s work-related injury that results in lost work time or medical treatment beyond first aid, the employer must:
- Provide the employee with Form DWC 1 (“Workers’ Compensation Claim Form & Notice of Potential Eligibility”);
- Ask the employee to complete the employee section of form DWC 1 and return it to the employer;
- Complete the employer section of the form; and
- Within one working day after receiving the form back from the employee, submit the fully completed form to its insurance carrier (or directly to the DWC, if the employer is self-insured) and provide a copy to the employee.
In addition, employers must fill out Form DLSR 5020 (“Employer’s Report of Occupational Injury or Illness”) and send it to their insurance carriers or claims administrators within five days after first receiving notice or obtaining knowledge of an injury. See this blog post for information on filing a claim in California.
In the event that an employee becomes the victim of a crime while on an employer’s premises, the employer must provide written notice to the employee, within one day of the crime, stating that he or she is eligible for benefits resulting from physical and psychiatric injuries.
Need More Help?
Check out these articles for more information on workers’ compensation laws in California:
- Everything You Need to Know About Workers' Compensation in California
- How Much Does Workers' Compensation Cost in California?
- How to Get Cheap Workers' Comp Insurance in California
- How to File a Claim in California