California, like all states, requires that employers have some form of workers’ compensation insurance. It’s the law. It pays for medical care and rehabilitation for employees and principals of companies eligible for coverage, who are injured on the job or contract a work-related illness. California workers’ compensation also covers a portion of an employee’s lost wages, disability benefits, and provides death benefits for the dependents of employees killed in work-related accidents.

California workers’ compensation covers all of the employees of a business. Special provisions must be made if employees work out-of-state or out of the country. If the employee dies because of the injury, the insurer pays death benefits to the worker’s dependents. Rates for California workers’ compensation are based on the classification code of each job class. For example, an administrative assistant or clerical job class code is 8010, setting the workers compensation average insurance rate at $2.00 per $100 of payroll (this is an example, rates vary carrier to carrier and year to year). The higher risk occupational classes (like construction workers) and claims rate, the higher the cost. So if your admin assistant is earning $50,000 per year, you will pay $1,000.00 in annual workers comp premiums. There are numerous class codes for every occupation. Your insurance professional will ask you for the total annual payroll paid for each job class.  Read more...