Resources
California workers’ comp: coverage, premiums and payroll records
Workers’ compensation coverage and accurate payroll records belong in the same employer checklist. Understand the coverage requirement, then prepare the information your insurance carrier needs to review the policy.
Last reviewed:
General information, not legal or tax advice.
Confirm coverage before employees begin work
California employers must carry workers’ compensation insurance even with one employee. DIR also says roofers without employees must carry coverage, and out-of-state employers may need coverage for employees regularly working here or contracts of employment entered here. Ask the carrier to confirm how the policy covers your actual operations.
Sources: California DIR, Division of Workers' Compensation, Employer information
Understand why carrier quotes can differ
DIR states that premium rates are not regulated by the state and can vary between carriers. Factors include industry classification, injury history or experience modification, payroll, underwriting adjustments and group or dividend programs. This guide supplies no experience-rating eligibility threshold or advisory premium rate; review the current figures with the carrier using the official resources.
Prepare payroll detail for a policy review
Keep payroll reports organized by the work performed, with explanations for reclassifications and changes in staffing. Reconcile the totals provided to the carrier with the books, and retain the policy correspondence supporting each adjustment. This practical audit preparation helps the reviewer follow the records without assuming that an accounting job code determines an insurance classification.
Keep proof of coverage and employee notices accessible
DIR identifies the carrier’s certificate of insurance as proof of coverage and requires a conspicuously posted notice to employees. Employers cannot ask employees to contribute to the insurance premium. Keep the certificate, policy contact and posting responsibility in the employer file so the payroll team can find the current information.
Treat uninsured operations as an immediate issue
DIR describes a stop order prohibiting employee labor and a penalty equal to the greater of twice the premium that would have been paid or $1,500 per employee during the uninsured period. Contact the carrier and appropriate adviser promptly about missing coverage.
Update the contractor coverage record when hiring
CSLB licensees with an exemption on file who later hire someone subject to workers’ compensation law must submit coverage proof to CSLB Headquarters within 90 days of hiring. CSLB also requires up to the top three workers’ compensation classification codes on the policy. Coordinate the license record with the insurance record rather than assuming a payroll setup change updates both.
Sources: CSLB, Workers' Compensation
Sources: confirm coverage before employees begin work
Keep contractor coverage documents together
Keep insurance payroll reports traceable
Tidwell helps reconcile payroll totals and organize supporting records for your carrier and CPA. Coverage and insurance classification decisions remain with those advisers.