California Workers’ Compensation

California Workers’ Compensation

A Complete Guide for Employers

Written by US Tax Bay

At US Tax Bay, we guide businesses through the maze of state compliance requirements. If you operate in California, understanding your workers’ compensation obligations is not just important — it's legally mandatory. Here's a full overview of California workers' compensation laws, exemptions, penalties, and coverage options.

Is Workers’ Compensation Required in California?

Yes.

In California, every business with one or more employees is required by law to carry workers’ compensation insurance, regardless of employee status (full-time, part-time, seasonal, or temporary).

Failure to comply can lead to serious financial penalties and even criminal charges.

Which Workers Can Be Excluded from Coverage?

California permits a few worker categories to be excluded from mandatory workers' compensation insurance:

• Domestic employees employed by family members

• Deputy sheriffs or clerks under specific circumstances

• Individuals providing services in exchange for aid or sustenance only

• Officials officiating amateur sporting events

• Volunteers at non-profit recreational camps

Correct worker classification is essential. Misclassification risks heavy penalties and potential lawsuits.

How to Buy Workers’ Compensation Insurance in California

Business owners can secure workers' compensation insurance by:

• Purchasing a policy from private insurance carriers, or

• Buying coverage from a competitive state fund if considered high-risk or unable to purchase private insurance.

US Tax Bay assists businesses in choosing the right insurance providers — whether you are in construction, healthcare, hospitality, or any other industry.

Penalties for Not Having Workers’ Compensation Insurance

California imposes some of the harshest penalties for noncompliance, including:

• Criminal charges for operating without coverage

• Stop work orders issued by the Division of Labor Standards Enforcement (DLSE)

• Fines of at least $10,000 for violating a stop order

• Jail time of up to one year

• Penalties assessed at either:

  • Twice the amount the business would have paid in premiums, or

  • $1,500 per employee (whichever is greater)

• If an uninsured employee injury occurs:

  • $10,000 per employee (if the case is compensable)

  • $2,000 per employee (if non-compensable)

  • Maximum penalty: $100,000

Noncompliance can bankrupt a small business. Staying properly insured protects you legally and financially.

Death Benefits for Workers’ Families

In tragic cases where a workplace injury results in death, eligible family members can receive:

• Up to $250,000 for one dependent

• Up to $290,000 for two dependents

• Up to $320,000 for three or more dependents(paid in eight annual installments)

Additionally, up to $10,000 can be paid toward funeral expenses.

Need Help Setting Up Your Business Payroll and Compliance?

U.S. TAX BAY makes it simple for new and growing businesses!

We handle everything you need:

✔️ Payroll Tax Registration

✔️ FEIN (Federal Employer Identification Number) Registration

✔️ Secretary of State (SOS) Business Registration

✔️ Workers' Compensation Registration Support

✔️ Full-Service Payroll Management

✔️ Unemployment Insurance Account Setup

✔️ Ongoing Compliance Services

⚡ Fast Turnarounds. Expert Support. Affordable Pricing. ⚡

📞 Get a FREE Consultation Today!

🌐 Visit: www.ustaxbay.com

📧 Email: info@ustaxbay.com

Why Choose US Tax Bay?

We don't just help you "set up" — we stay with you to ensure ongoing compliance and avoid costly mistakes.

With US Tax Bay, your business is backed by experts who:

• Handle all government registrations

• Ensure your insurance compliance

• Manage payroll and filings seamlessly

Protect your business. Stay compliant. Partner with US Tax Bay today!

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