Penalties for not having California Workers Compensation

In the great state of California not carrying Workers' Compensation insurance is a crime subject  to civil and criminal penalties potentially. This is a serious situation which doesn't get better by ignoring it.  Get a quote today for Workers' Compensation and avoid the penalties.

General Rule:    The California Division of Labor Commissioners office determines if a company is not legally carrying workers' compensation coverage, which is a misdemeanor offense punishable by either a fine of $10,000 or imprisonment in county jail for up to one year, or both.

What if an employee gets sick or hurt on the job and we don't have workers' compensation coverage?

If an employee is sick or hurt from the job you, the employer, are immediately responsible for the medical costs and claims which may occur.  You also could be held liable for civil litigation if the employee decides to pursue the matter in court.

What if an employee files a Workers' Compensation claim with the California Workers' Compensation appeals board and we are uninsured?

If an employee is hurt and files a claim with the State of CA the employer will first be issued a stop employment order, where it is illegal for the company to operate its business with employee labor.  If this is not obeyed the state can fine the employer up to $10,000 and imprisonment up to 60 days.  In addition the Division of Labor will asses a fine of $1,000 per employee up to $100,000 total.  The medical costs alone could be disastrous for a company to cover as we've all seen the dramatic rise of healthcare expenses over the last decade, let alone the risk of the fines and jail time.

Additional fines of between $2000 and $10,000 per employee up to $100,000 maximum may be issued depending upon State of Appeals board and judge review relative to a case's compensable or non-compensable status.

What if an executive officer or partner in the company is hurt on the job?

Generally speaking executive management is still required to be covered by workers' compensation coverage unless they have ownership in the company.  Contact us about the specifics of the situation if you think it may not be required due to an ownership or relative situation.

Can I self insure my workers' compensation coverage?

It is possible to self insure your company but you must show a net worth of greater than 5 million dollars and you must apply and receive state approval to do so first.

Really as the owner and operator of a business in California it makes no sense to consider operating outside the laws and try to skirt the requirement of providing workers' compensation insurance for your company.  The costs of covering medical claims alone for any injured employees could reach the millions when factoring in the exponential rise in medical treatment costs.  What if an employee spent 6 months in the hospital due to a work related injury?  This is one issue which does not get better  in time through putting it off.

 Related Pages:

How to get the best Workers Comp rate
Different approaches to Workers Comp

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