Michael Duvall Insurance Agency
Guide

Workers' Compensation in California: What Every First-Time Employer Needs to Know

California requires workers' compensation coverage once you have employees, and it belongs in force before the first shift. The policy is rated on payroll by class of work, posted notices are required at your workplace, and the premium is trued up at audit against your actual payroll.

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In insurance since 1981Independent agencyCA Lic. 0606906

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The basics

What Does the Policy Actually Do?

It pays for work-related injury and illness to your employees, and it protects you from being sued over it in most cases.

Medical care and lost wages

The policy covers treatment for a work-related injury and replaces a portion of the employee's wages while they cannot work. Your general liability policy does neither.

Employer's liability

The second part of the policy responds when an injury leads to a suit against the business outside the standard benefit system.

Rated on payroll and class

Premium is built from payroll assigned to class codes describing the work. The same payroll in a different role prices differently.

Trued up at audit

You estimate payroll at the start and the carrier compares it to actual payroll at the end of the term, adjusting the premium either direction.

Before the first shift

What Do I Need in Place Before Someone Starts?

Three groups of items. None of them take long, and all of them are easier before the start date than after.

Coverage

The policy itself, bound and effective.

  • A workers' compensation policy in force before the first shift
  • A decision on whether owners or officers are included or excluded
  • Accurate job duty descriptions for every role you are hiring

Paperwork at the workplace

California requires certain notices and records.

  • The required workplace posting notices displayed where staff can see them
  • New-hire notices provided to each employee
  • A written process for reporting an injury

Classification

Getting this right at the start prevents an ugly audit.

  • Confirm which workers are employees and which are genuine contractors
  • Keep payroll records separated by role, not just by person
  • Tell us when duties change mid-term
Read next

Related Reading

I hired my first employee

The steps in order, before the start date.

Workers' Compensation

How we place and service the policy.

Questions

Workers' Comp — FAQ

Do part-time or seasonal workers count?+
Generally yes. The requirement is not based on hours worked. Describe the roles and schedules to us and we will confirm what applies to your business.
Are owners and officers covered?+
That depends on your entity type and the elections you make when the policy is written. Some are excluded by default and can opt in, so decide it deliberately at binding.
What if I use contractors instead of employees?+
Classification depends on how the work is directed rather than what the invoice says. A worker treated as a contractor but directed like an employee becomes your exposure.
What happens at the audit?+
The carrier compares your estimated payroll to your actual payroll by class and adjusts the premium. Clean records by role are what make it uneventful.
Contact Us

Talk to a licensed agent.

Call or send a note and tell us what you need covered. A licensed agent gets back to you — not a queue — with which carriers can write it, what the policy excludes, and what happens next.

Call our team

(714) 777-3939

Hours

Mon–Fri 8:30am–5:30pm PTClosed weekends

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