Workers' compensation basics are covered in the national guide. California's rules are in the Labor Code (Division 4, 3200 and following), with insurance rules in the Insurance Code. Workers' compensation is part of the commercial section of the Casualty exam, and the state questions cover who must insure, the ABC test, benefits and deadlines, the State Compensation Insurance Fund, and penalties for uninsured employers.

Who must insure

• Almost every employer with one or more employees must secure workers' compensation (Lab. Code 3700). It may do so by insuring with an authorized insurer or by getting a certificate of consent to self-insure.
• A sole proprietor with no employees isn't required to carry coverage but may elect it.
• Qualifying corporate officers and directors who own all the stock may elect to exclude themselves (Lab. Code 3352).
• A household employee is excluded if, in the 90 days before the injury, they worked less than 52 hours or earned $100 or less (3352(a)(8)).
• Every homeowners or other comprehensive personal liability policy must include workers' compensation for household employees, unless other valid coverage applies (CIC 11590).
• Employee status is decided by the ABC test (Lab. Code 2775). A misclassified worker who is injured can make the employer liable as an uninsured employer.
• Employers must post a notice of coverage and employee rights (3550).

The system

• Benefits are no-fault, and they are the employee's exclusive remedy against the employer (Lab. Code 3600).
• Benefits cover medical care, disability, and death. They do not include damages for pain and suffering.
• State Compensation Insurance Fund (State Fund) is a competitive state carrier and the market of last resort. It may refuse a risk tendered with premium only if the employer fails minimum safety requirements (CIC 11770, 11784).
• The Workers' Compensation Insurance Rating Bureau (WCIRB) collects statistics and submits advisory pure premium rates. California uses the WCIRB rather than NCCI, and insurers file their own rates (CIC 11750.3).
• Premium is based on payroll by classification, adjusted by experience modification.
• 24-hour coverage combines workers' compensation with nonoccupational health or disability coverage (CIC 1749.02).

Benefits and deadlines

Uninsured employers

• Knowingly failing to insure is a misdemeanor: up to a year in jail and a fine of up to double the premium that would have been due, with a minimum of $10,000 (Lab. Code 3700.5).
• A stop order carries a penalty of $1,500 per employee (3722).
• An injured worker may sue. Negligence is presumed, and the employer loses the common-law defenses (3706, 3708).
• Benefits may also come from the Uninsured Employers Benefits Trust Fund (3716).

Fraud

Knowingly making a false statement to obtain or deny workers' compensation benefits is punishable by prison or jail, or a fine up to $150,000 or double the value of the fraud (CIC 1871.4).

Common exam traps

• Coverage is required at one employee.
• California uses the WCIRB, not NCCI.
• State Fund can refuse a tendered risk only for safety failures.
• The DWC-1 claim form is due within 1 working day.
• The waiting period is 3 days, paid back after 14.
• Homeowners liability policies must include coverage for household employees.