What is workers’ compensation? Workers’ compensation insurance, often shortened to workers’ comp, is a type of insurance businesses must have in order to cover incidents or injuries that happen to employees as a direct result of their jobs. It covers medical bills, physical therapy, lost wages, disability payments, and death benefits.
Who is required to get workers’ comp insurance? In California, all businesses with one or more employees must get workers comp insurance to cover each employee, including part-time employees. Some independent contractors, such as roofing, HVAC, and tree-service contractors, are also required to purchase workers’ comp.
What happens if an employer doesn’t purchase workers’ comp insurance? If an employer is caught without workers’ comp they could receive a stop order. This means they would not be able to continue business operations until workers’ comp insurance has been purchased. They could also receive up to a year in jail or a fine up to double the amount of the workers’ compensation premium that would have covered the uninsured period, or both.
Do only union members receive workers’ comp benefits? No! Any employee that has been injured, fallen ill, or died as a direct result of their job qualifies for workers’ comp. However, joining a union can often result in better workers’ comp benefits due to collective bargaining agreements or additional resources the union may have set aside. Collective bargaining agreements are contracts in which the union leaders and company management outline the payment, schedules, and policies that each party must adhere to. These agreements often include member-specific workers’ comp benefits that are only available to union members.
How much does it cost? The benchmark rate for workers’ comp insurance in California is $1.46 per $100 of payroll. The amount a company will pay varies based on many factors such as the number of employees, job type, payroll, location, coverage limits, and past claims history.
Where can an employer purchase workers’ comp insurance? It is very common to get workers’ comp insurance through the state fund but there are also a great deal of private insurance companies for an employer to work with. A company that has been open for a minimum of 3 years may qualify to self-insure, but they must first seek approval from the Office of Self-Insurance Plans (OSIP).
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