The California Department of Industrial Relations (DIR) is very clear: state law “requires all employers to have workers’ compensation insurance.” An uninsured employer in California can face very serious sanctions. Notably, an employer could even be required to pay higher workers’ compensation rates once they get re-insured. Here, our Sacramento workers’ compensation defense law firm explains the key points uninsured employers need to know about their situation, including the cost of obtaining insurance coverage.
Workers’ Compensation Law: Uninsured Employers in California Can Face Major Penalties
California takes uninsured employer violations very seriously. An employer in Sacramento or elsewhere in California that fails to obtain the mandatory workers’ compensation coverage could face any combination of the following sanctions:
- Fine: Employers in California who fail to carry workers’ compensation insurance may face large fines. The maximum fine is $10,000.00—per employee.
- Double Workers’ Compensation: Employers lacking workers’ compensation insurance may be penalized by being required to pay double premiums for the next three years.
- Suspension of Business: In California, state officials can suspend the business operations of any employer found operating without the proper workers’ compensation insurance.
- Criminal Charge: Finally, for flagrant violations, the business owner may be charged with a criminal offense. It could be a misdemeanor, or a felony based on the specific situation.
Note: If a worker is hurt on the job while employed by an unlawfully uninsured employer, he or she can file a personal injury lawsuit directly against the company. Employers that are uninsured in California do not get access to the liability protection offered by workers’ compensation.
What to Know About Workers’ Compensation Penalty Rates (Increase Costs for Uninsured Employers)
Employers in California that lack the required workers’ compensation insurance coverage cost face significantly higher rates going forward—at least for the next three years. State regulators can effectively impose a penalty surcharge that requires these employers to pay double the workers’ compensation rate that they would otherwise be required to pay. To be clear, this is not a mandatory penalty. Further, the penalty period can be imposed for less than three years. The longer an employer goes without the required workers’ compensation coverage, the more serious penalties that they will face—and that includes a higher likelihood of being required to pay double premiums in the future. For employers that are currently uninsured, a proactive approach is a must. Voluntary, timely action can spare you and your company from the most severe sanctions.
Speak to a Workers’ Compensation Defense Lawyer in Sacramento, California
At Yrulegui & Roberts, we are a law firm that puts the rights and interests of clients first. Our firm represents employers and insurance companies in workers’ compensation claims. It is our mission to help clients resolve their problems in the most cost-effective manner. If you have any questions about navigating an uninsured employer claim, please do not hesitate to contact us today for your confidential case review. We represent clients in Sacramento and throughout Central California.
