Quick answer: In California, your employer pays for workers’ compensation, either by buying insurance or by qualifying to self-insure. Employees pay nothing, and California law prohibits employers from deducting the cost from your wages. When you are injured, the insurer or self-insured employer pays your medical bills directly and pays your disability benefits to you.
Workers’ compensation in California is an employer-funded system. Nearly every employer with even one employee must carry it. In exchange, the employer is generally protected from lawsuits by injured employees, and the employee receives benefits without having to prove fault.
How Employers Pay for Coverage
Insurance policies
Most employers buy a policy from a private insurance company or from State Compensation Insurance Fund (State Fund), the state-created carrier. Premiums are based on payroll, the job classification of the work, and the employer’s own claims history, known as the experience modification.
Self-insurance
Large employers and public agencies can be approved to self-insure. They pay claims from their own funds, usually through a third-party administrator. Your rights are the same either way.
Who Pays What After an Injury
- Medical treatment: billed to and paid by the insurer or self-insured employer. You should not receive bills, copays or deductibles.
- Temporary disability: paid to you every two weeks while you cannot work. See does workers’ comp cover lost wages.
- Permanent disability: paid weekly, or as part of a settlement.
- Death benefits: paid to dependents. See workers’ comp death benefits.
- Attorney fees: approved by the judge and paid from your permanent disability award, not by you upfront. See what workers’ comp lawyers charge.
Can My Employer Make Me Pay?
No. California Labor Code Section 3751 prohibits an employer from deducting any part of the cost of workers’ compensation from an employee’s wages. An employer that tells you to use your personal health insurance for a work injury, or to pay for treatment yourself, is pushing a cost onto you that the law places on the employer.
What If My Employer Has No Insurance?
Operating without workers’ compensation coverage is a crime in California. If you are injured while working for an uninsured employer, you can still file a claim with the Workers’ Compensation Appeals Board. The Uninsured Employers Benefit Trust Fund (UEBTF) can pay benefits and then pursue the employer. You may also have the right to sue the uninsured employer in civil court, where the law presumes the employer was negligent.
When Someone Else Caused the Injury
If a third party, such as another driver, a property owner or the maker of defective equipment, caused your injury, you may have a separate claim against that party. The workers’ comp insurer can recover what it paid from that recovery, which makes coordination between the two claims important.
Are Workers’ Comp Benefits Taxable?
Workers’ compensation benefits are generally not taxable as income under federal or California law. If you also receive Social Security Disability, an offset can make part of the SSDI benefit taxable, so it is worth reviewing with a tax professional.
Talk to a Certified Specialist at No Cost
Dennis A. Dascanio is certified by the State Bar of California Board of Legal Specialization as a specialist in workers’ compensation law and has represented injured workers since 1987. Consultations are free, and attorney fees are approved by the judge and paid only from benefits recovered. Call the office nearest you: Santa Ana 714-550-7002, Ontario 909-460-6900, or San Diego 619-338-8399. Se habla español.
This page provides general information, not legal advice for your situation. Every claim depends on its own facts.