Yes, California law requires all employers to have coverage for their California employees. An employer can buy it from a licensed insurer. They can also choose to self-insure, if they meet the requirements set by the Department of Industrial Relations (DIR).

It is a criminal offense for an employer to be unlawfully uninsured regardless of whether or not an employee is injured. California Labor Code Section 3700.5 specifies that it is a misdemeanor punishable by either a fine not less than $10,000 or imprisonment in the county jail for up to one year, or both. In addition, the state issues penalties of up to $100,000 against illegally uninsured employers. If an employee is injured, the employer is responsible for paying all benefits and may be subject to additional liability.

Generally, insurance is optional for any business where the only employees are owners of the business. Consult your insurance agent or your attorney for your options.

Some employers, mainly large businesses, may opt for self-insurance if they are authorized to do so by the Department of Industrial Relations (DIR). Self-insured employers remain liable for all workers' compensation claims. See Labor Code Section 3700 et. seq. Contact your insurance agent or the state's Office of Self-Insurance Plans.

A WCIRB representative will visit an insured employer's place of business to gain a general understanding of the employer's business by interviewing a knowledgeable employee and touring the facility. Estimates of the number of employees doing each task and an estimate of their combined payroll will need to be provided.

Generally, there are two reasons a business is selected for an inspection: (1) it is subject to experience rating or (2) the insurer requested an inspection.

Yes. According to the California Insurance Code (Section §11750.3) and the California Workers' Compensation Uniform Statistical Reporting Plan - 1995 (Part 3, Section VI), the WCIRB has the authority to inspect an insured business for classification purposes. However, if an employer is contacted at a time that is not convenient, arrangements can be made to perform the inspection at a later time. All information gathered during the inspection is confidential and is shared only with those who have a right to the information.

Not directly, but an employer can ask its insurer to request an inspection. There may be a charge for the inspection.

A knowledgeable company representative who is authorized to discuss company information, such as the number of employees, estimated payroll, and a description of the business operations, must be available.

After an inspection is conducted, a report is prepared and a copy is sent to the employer and the employer's insurer. The employer should contact its insurer for additional copies; however, a copy may be obtained for a nominal charge by contacting the WCIRB Customer Service Department.

Your employer is required to post the name of the current insurer and instructions on how injuries should be reported. If you have asked but cannot get this information from your employer, you may go to the Coverage Inquiry Website. For more information on coverage research services provided by the WCIRB, visit the Coverage Research page on this website.

Your employer remains liable for paying workers' compensation benefits. Contact the Department of Industrial Relations, Division of Workers' Compensation district office, for information about benefits to which you may be entitled.

It is a percentage that compares the payroll and loss history of a company to those of similar-sized companies in the same industry. For example, if a company has a better than average loss record, their experience modification would be less than 100%.

Normally, an experience modification is calculated based on the actual audited payroll and losses reported by the insurer for three consecutive policy years.

A business qualifies for an experience modification if the amount produced by applying the approved expected loss rates (shown in Table I of the California Workers' Compensation Experience Rating Plan—1995)  to the total remuneration that would be used in the experience rating calculation is greater than or equal to the experience rating eligibility threshold. The experience rating eligibility threshold is adjusted each year to reflect wage inflation and changes in the average expected loss rate. The experience rating eligibility threshold is specified each year in Section III, Rule 1 of the California Workers' Compensation Experience Rating Plan—1995. Both the current experience rating eligibility threshold and the approved expected loss rates can be viewed in the Filings and Plans section of this website. 

If two or more businesses are owned by the same person, or share more than 50% common ownership, then they will be combined for experience rating purposes. The payrolls and losses of all commonly-owned businesses will be combined to compute a single experience modification, which will then be applied to all the commonly owned businesses. For experience rating purposes, commonly owned businesses may be insured on a single policy or on separate policies.

Yes, if the insurer submits a correction (as specified in the California Workers' Compensation Uniform Statistical Reporting Plan - 1995), such as for a non-compensable claim, or if you have ownership changes, then the WCIRB may revise your experience modification. Also, if the insurer or the WCIRB reassigns the classification applicable to the business after a WCIRB inspection or test audit, then the WCIRB may revise the experience modification.

If a claim is declared "non-compensable" (because it is fraudulent or otherwise), the insurer will submit a correction to the WCIRB. The correction could trigger a revision to one or more experience modifications.

It is one component in determining the price an employer will pay for workers' compensation insurance. Classifications are established for an industry and typically include all occupations or operations within a business. There are approximately 500 classifications in California.

Initially, the classification is determined by the insurer using information provided on the application or information received from the WCIRB. The WCIRB may inspect your business to verify the class assignment for data reporting purposes.

Typically, an industry or trade organization contacts the WCIRB to explore the possibility of setting up a new classification. Also, the WCIRB routinely reviews existing classes and industry trends to ascertain whether the existing classifications are appropriate in today's business environment.

The employer should seek an explanation from its insurer. If necessary, the insurer should be asked to request a WCIRB inspection. There may be a charge for the inspection. If the class assigned by the WCIRB is still disputed, contact the WCIRB for reconsideration. The Policyholder Ombudsman is available to assist policyholders through the process.

While the WCIRB cannot provide premium information, since each insurer sets its own rates. The California Department of Insurance website has a Workers’ Compensation Rate Comparison section that includes lists of insurer rates by classification code. To learn more and to view the lists, go to http://www.insurance.ca.gov/01-consumers/105-type/9-compare-prem/wc-rate/. You may also contact your agent, broker, or insurer for more information.