workers' compensation exemptions

Generally, all employers in the state of California are required to carry workers’ compensation insurance. However, like many rules—there are some exceptions. Under certain circumstances, employers in California may be exempt from having to carry workers’ compensation insurance. It is helpful to understand what causes employers to be exempt from this rule so that you can know how to move forward if it ultimately affects you.

Workers’ Compensation Attorneys in California

If you have been injured in a work accident, do not hesitate to contact an experienced California workers’ compensation attorney to handle your case for you. The attorney at Kneisler and Schondel has many years of experience successfully handling workers’ compensation cases of all varieties. Contact our office today to learn more about how we can help you pursue the workers’ compensation benefits that you deserve.

Who Is and Is Not Required to Purchase Workers’ Compensation Insurance in California?

In the state of California, it is a requirement under the California Labor Code Section 3700 that any employer of one or more employees must obtain workers’ compensation insurance. Since the requirement exempts sole proprietorships, if you are self-employed and do not employ anyone else, you are not required to obtain workers’ compensation insurance.

Another exemption for workers’ compensation insurance coverage involves the scenario in which a corporation is fully owned by the directors and officers of the corporation. If this is the case, then the directors and officers can opt to exclude themselves from the workers’ compensation insurance coverage.

Though this is not exactly an exemption, it is also worth noting that companies that have independent contractors working for them do not have to obtain workers’ compensation coverage for them. This is because independent contractors are not considered employees under state law, so this requirement does not apply to companies that use independent contractors. However, if the company does have employees and not independent contractors, they must obtain insurance coverage for those employees.

California Employers and Self-Insurance

It is possible for some California employers to choose to be self-insured for workers’ compensation rather than having to obtain insurance through a traditional insurance carrier. In order to become self-insured, the company must obtain state approval, and must also have a net worth of at least five million dollars. In addition, the company must also have a net income of at least $500,000 per year and is also required to post a security deposit with the state. Due to these requirements, being self-insured is typically only available to large, wealthy companies. 

If the company that you work for is self-insured, it does not change any of your workers’ compensation rights and benefits under the law. You will still be able to pursue your claim for benefits—it will just be the responsibility of the employer directly to provide your benefits.

What Happens If My Employer Does Not Obtain Workers’ Compensation Insurance?

It is against the law in California for an employer to fail to obtain and to maintain workers’ compensation insurance coverage. There are serious penalties for employers who do not have workers’ compensation insurance. There may be consequences in both criminal and civil court for the failure to obtain insurance.

If your employer does not have workers’ compensation insurance you still have an opportunity to pursue benefits for your work-related injury. In this case, your employer has the responsibility of paying for all bills that are related to your work injury or illness. Your workers’ compensation attorney can help you pursue compensation against your employer.

While workers’ compensation benefits are the exclusive remedy for work-related injuries, meaning that you cannot also file a civil lawsuit against your employer, this exclusive remedy may not apply if your employer is not properly insured. In these cases, you may be able to file a civil action against your employer in addition to your workers’ compensation claim.

You can also file a claim for your benefits with California’s Uninsured Employers’ Benefit Trust Fund (UEBTF). This is a unit within the Division of Workers’ Compensation that pays benefits in some cases to injured workers who got hurt working for an employer who does not have workers’ compensation insurance coverage. Your attorney can help you decide how to move forward with pursuing workers’ compensation benefits in the event your employer is uninsured.

Call the law office of Kneisler & Schondel today at (707) 542-5132 for a consultation regarding your workers’ compensation case. Due to varying deadlines at different stages in the workers’ compensation process, speaking with legal counsel right away is to your benefit.