According to PropertyCasualty360, a big rate increase is expected for workers’ compensation premiums in California in the coming year. The California Department of Industrial Relations (DIR) recently notified insurance companies that work in the system that there may be a double-digit rate increase in 2024. Here, our Fresno workers’ compensation defense law firm provides an overview of the key things to know about the expected workers’ compensation rate changes in California.
The Report: Assessments for Fiscal Year Will Increase By $1.7 Billion
In recent weeks, the DIR has informed workers’ compensation insurers in California of a significant increase in assessments for the fiscal year 2023/2024. In total, the additional financial assessments amount to $1.7 billion. The funds being sought are designed to support court operations, enforce labor standards, and maintain safe working conditions in the state.
What it Means for Employers: An 11% Workers’ Compensation Increase Statewide
Notably, a sharp increase in workers’ compensation rates is expected in 2024. The financial assessments will, in part, drive the likely increase. An industry watchdog group has informed insurance companies that provide workers’ compensation policies to prepare employers for an expected 11% rate increase. While workers’ compensation premiums remained flat for a few years following the outbreak of the COVID-19 pandemic, the subsequent period of heightened inflation has resulted in significant year-over-year increases in workers’ compensation costs.
How Workers’ Compensation Rates are Determined in California
While the increase in workers’ compensation premiums will be statewide, it is important to remember that not all employers in California pay the same level of workers’ compensation costs. Indeed, workers’ compensation rates in California are determined by a wide range of different factors. Some key issues that will impact an employer’s workers’ compensation costs include:
- Classification Codes: In California, jobs are grouped into “classification codes” based on the type of work done. Riskier jobs usually have workers’ compensation higher rates. As a simple example, a construction worker will likely have a higher rate than an office worker.
- Company’s Claim History: If a company has a history of many workers’ compensation claims, their rates might be higher. An employer with an unusually high rate of claims can expect to pay more in workers’ compensation premiums than in subsequent years.
- Total Payroll: The total payroll of a company is a big factor in workers’ compensation costs in California. The more you pay your employees, the higher your costs may be. With a higher payroll, the potential payout for lost wages, in the event of an injury, increases.
Contact Our Fresno, CA Workers’ Compensation Defense Lawyer Today
At Yrulegui & Roberts, our Fresno workers’ compensation defense attorney has the professional and legal experience that you can rely on. Have specific legal questions about a workers’ compensation case? Professional help is available. Contact us today to arrange for your confidential case review. From our Fresno office, we are well-positioned to handle workers’ compensation defense matters all across the region.
