CaliforniaWorkers' Compensation Insurance Requirements (2026)

What California Business Owners Need to Know

• •California has one of the strictest workers' comp laws — coverage is required even if you have just 1 employee
• •Sole proprietors and partners are exempt but can elect coverage
• •SCIF is the state-run competitive insurer — not monopolistic, just another option alongside private carriers
• •Premium formula: Classification Rate × Experience Modification Rate (EMR) × (Payroll / $100)
• •Employers must post Form DWC-7 notice informing employees of workers' comp rights
• •Medical provider networks (MPNs) are used to direct initial care
• •California has supplemental job displacement benefits and return-to-work supplements

• ✓Medical treatment — all reasonable and necessary medical care for work-related injuries and illnesses, including doctor visits, hospital stays, surgery, prescriptions, and physical therapy
• ✓Temporary disability benefits — approximately 66.67% of pre-tax wages (up to $1,764/week) while recovering and unable to work
• ✓Permanent disability benefits — compensation for lasting impairments, rated on a schedule from 0-100% based on the nature of the disability and diminished future earning capacity
• ✓Supplemental job displacement benefits — a voucher (up to $6,000) for retraining or skill enhancement if the employee cannot return to their previous job
• ✓Death benefits — $250,000 to $320,000 to surviving dependents, depending on the number of dependents
• ✓Burial/funeral expenses — up to $10,000 for funeral and burial costs
• ✓Mileage reimbursement — reimbursement at the IRS rate for travel to and from medical appointments
• ✓Return-to-work supplement — a one-time $5,000 payment for employees with permanent partial disability whose employer does not offer modified work

1. 1Determine your coverage requirement — California requires coverage for all employers with 1 or more employees, including part-time and seasonal workers. Sole proprietors and partners are exempt but can opt in.
2. 2Get your WCIRB classification code — the Workers' Compensation Insurance Rating Bureau (WCIRB) assigns classification codes for California. Your code is based on your primary business activity and determines your base rate.
3. 3Gather payroll data by classification — break down your estimated annual payroll by job classification. Office workers, field staff, and drivers each have different codes. Accuracy prevents overpaying and audit surprises.
4. 4Get quotes from multiple carriers — compare pricing from private carriers, the State Compensation Insurance Fund (SCIF), and through an independent insurance agent. SCIF is the insurer of last resort if private carriers decline you.
5. 5Choose between annual and pay-as-you-go billing — pay-as-you-go ties your premium to actual payroll each pay period, improving cash flow. Annual billing requires a larger upfront deposit.
6. 6Bind the policy and post DWC-7 notice — once you select a carrier, bind coverage before any employee starts work. Post the Notice to Employees (DWC-7) in a visible location informing workers of their rights.
7. 7Set up your Medical Provider Network (MPN) — choose or enroll in your carrier's MPN. In California, employers direct initial treatment through their MPN for the first 30 days after a claim is filed.

1. 1Employee reports the injury — the employee should report the injury to you as soon as possible. California law requires the employee to notify the employer within 30 days of the injury.
2. 2Provide DWC-1 claim form within 1 day — California law requires employers to provide the DWC-1 claim form within 1 working day of learning about the injury. Give the employee the form to complete and sign.
3. 3Report to your insurer immediately — notify your workers' comp insurer within 5 days of knowledge of the injury. File the Employer's Report of Occupational Injury or Illness (Form 5020) with your carrier.
4. 4Authorize up to $10,000 in treatment — California requires the insurer to authorize up to $10,000 in medical treatment while the claim is being investigated, even before acceptance or denial.
5. 5Direct treatment through your MPN — for the first 30 days, the employer can direct treatment through their Medical Provider Network (MPN). After 30 days, the employee may switch to their own doctor.
6. 6Insurer accepts or denies within 90 days — the insurer has 90 days to accept or deny the claim. If no decision is made within 90 days, the claim is presumed accepted.
7. 7Manage return-to-work — offer modified or alternative work when the employee is medically cleared for some activity. Document all offers in writing. Maintain communication with the treating physician and claims adjuster.

Frequently Asked Questions

Official California Resources

• Division of Workers' Compensation
• State Compensation Insurance Fund (SCIF)
• Workers' Comp Insurance Rating Bureau (WCIRB)
• Office of Self-Insurance Plans (OSIP)
• Cal/OSHA
• Employer Rights & Responsibilities