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Is Your Employer Required to Have Workers’ Compensation Insurance?


Workers' compensation insurance is a critical form of coverage designed to provide support and financial assistance to employees who suffer injuries or illnesses directly related to their jobs. This insurance is vital in the modern workplace. It allows injured workers to receive the necessary medical care and compensation for lost wages through temporary or permanent disability and other benefits like supplemental job displacement or return-to-work programs.

The primary purpose of workers' compensation insurance extends beyond just supporting injured employees; it also serves to protect employers. By having this insurance, employers safeguard themselves against lawsuits from injured workers. Essentially, it creates a form of financial and legal buffer for both parties, focusing on recovery and rehabilitation rather than litigation.

If you are injured while performing your job duties, you can file a claim through your employer's workers' compensation insurer. This process should ideally ensure that you receive the appropriate medical treatment and compensation for any disability arising from the injury. However, it's common to encounter challenges such as delays in benefit processing or outright claims denials.

In such instances, seeking the guidance of an experienced attorney can be crucial. Legal professionals in workers' compensation can help navigate the complexities of your claim, advocate on your behalf, and protect your rights under the law.

Those in Glendale facing difficulties with a workers' compensation claim or needing advice on proceeding after a workplace injury can call Law Offices of Wax & Wax at (818) 946-0608 or contact us online to arrange a consultation.

Legal Requirements for Employers

Under California Labor Code § 3700, every employer is required to provide workers' compensation insurance for their employees. This mandate applies regardless of the business size, even if the company has only one employee.

Employers bear the sole financial responsibility for securing this insurance; they are prohibited from asking employees to contribute to the cost. This obligation ensures that the protection provided by workers' compensation insurance remains entirely employer-funded, emphasizing the employer's responsibility to maintain a safe working environment.

Employers have several options for obtaining workers' compensation insurance:

  • Purchase insurance from a licensed insurer
  • Secure coverage through the state compensation insurance fund (commonly known as state fund),
  • Choose to self-insure

Self-insuring requires approval from the state, indicating that the employer has the financial stability and capability to meet potential obligations arising from workers' compensation claims.

Moreover, California law requires employers to be transparent about their workers' compensation insurance. Employers must prominently display a "notice to employees" poster at each site. This poster provides essential information about the employer’s workers' compensation coverage. Additionally, upon hiring new employees, employers must provide them with an information packet that details the workers' rights and responsibilities concerning workers' compensation claims.

Consequences for Employers Without Workers’ Comp Insurance

The requirement for employers to maintain workers' compensation insurance is not just a regulatory formality but a critical legal obligation. The consequences of failing to comply with this mandate can be severe and multifaceted, impacting the business's financial stability and the employer's legal standing.

The Division of Labor Standards Enforcement (DLSE) enforces these regulations. It has the authority to take significant actions against non-compliant businesses. One of the primary enforcement tools is the issuance of a stop order. This order can halt all business operations at a company until the employer secures adequate workers' compensation insurance. Such a drastic measure can hurt a business's operations and lead to substantial financial losses.

Moreover, the financial penalties for lacking proper insurance are steep. If an employer is found without the required workers' compensation insurance, they could face misdemeanor charges, which may result in incarceration for up to one year. Additionally, they could be fined up to twice the premium that would have been paid for proper coverage during the uninsured period.

If an injury occurs and the employer is without workers' compensation insurance, the legal and financial responsibilities become even more onerous. The employer is liable for all medical bills and other compensation related to the employee’s injury or illness. This direct liability can amount to enormous sums, far exceeding what the employer would have paid in insurance premiums.

Apart from these penalties, employers must also post a visible notice to employees about their workers' compensation coverage. Failure to do so is a misdemeanor and can result in a civil penalty of up to $7,000.

Understanding Your Rights and Seeking Protection Through Workers’ Compensation

Employers in California are mandated by law to have workers’ compensation insurance, covering all employees from the first day of employment. As an employee, it’s essential to know that your employer should have coverage and that you have the right to file a claim if you suffer a work-related injury or illness. This system protects you by providing necessary benefits without litigation, allowing you to focus on recovery.

At Law Offices of Wax & Wax, we provide the support and legal representation employees in Glendale need when navigating workers’ comp claims. Contact us at (818) 946-0608.

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