Can I Refuse Workers’ Comp in California?

It is a state requirement for California business owners to provide no-fault workers’ compensation insurance for the protection of both employers and employees. However, there are few exceptions to this requirement. As an employer, you may be wondering if you can refuse workers’ comp in California. A California workers’ comp lawyer can provide you with advice for your specific circumstances.

California Requirements for Providing Workers’ Compensation to Employees

California requires all businesses to provide workers’ compensation, even if the business only employs one person. In fact, it is considered a criminal offense if you do not have this type of insurance. Failure to do so may lead to you receiving heavy fines.

Furthermore, if you forgo workers’ comp insurance and an employee becomes sick or hurt on the job, you would be liable to cover all of their medical bills.

The exception to refusing workers’ compensation is if you are the sole proprietor of your business and have no employees. Some sole proprietors wish to have workers’ compensation insurance for themselves, and a lawyer can advise you on whether this is a wise decision. It may be more beneficial to purchase health, life, and disability income insurance.

It’s important to note that even executive officers and directors of the company must be covered by workers’ compensation insurance. The exception to this is if the directors and officers own the company completely. If so, they do not have to be included in the company’s workers’ compensation policy.

Another issue that can arise with a workers’ compensation claim involves subrogation, which means that you or the insurer receive repayment costs from a third party. To relieve confusion, consider consulting with an attorney who practices workers’ compensation law.

Workers’ Compensation Claim Forms

When an employee comes to you and informs you of a job-related injury, you have one day after the incident occurred to provide the individual with a workers’ compensation claim form. The employee must provide their personal information, what occurred during the incident, where it happened, and a brief description of the injuries sustained.

Workers’ compensation claims can be a strain to your business, and as a way to protect it, it is wise to consult with a workers’ compensation defense attorney to guide you through the process.

After it has been completely filled out and returned to you, you or the employee’s insurer have 90 days to further investigate the claim and then either reject or accept it. If it has not been accepted or rejected, it is declared eligible for compensation.

At the time of the claim, you must authorize treatment for injuries, which covers up to a certain amount of medical bills while the claim is still being investigated. If the claim is indeed accepted, treatment will continue regardless of the cost.

After you have submitted the claim to your insurance provider, they have a deadline by which to respond. They will reply by either beginning to provide benefits to the employee, denying the claim, or delaying the claim with further investigation.

Timely Reporting of a Claim

According to state law, employees must alert their employers of an injury or illness within a certain timeframe if they wish to file a workers’ compensation claim. It is imperative that the employee reports the workplace injury within a month after it happened. It is your responsibility to provide the forms necessary to file the claim.

If, however, the employee does not report the injury within the proper time frame, it is your right to deny the claim. Late reporting hinders its validity. It also can cost you more money, as the injury has not been taken care of immediately, therefore making it worse.

In most cases, the timeline that dictates when to file a claim is to be strictly adhered to if the date of the accident is known. Some cases involve gradual symptoms, so it is difficult to determine the date of the incident. This is known as a cumulative trauma claim, which has a different timeline in which employees can file for workers’ comp.

FAQs

Q: Can an Employee Opt out of Workers’ Compensation in California?

A: An employee can opt out of workers’ compensation in California if they meet certain criteria. They must own a certain percentage of the business’s stock. Then, they must sign a waiver stating that they are opting out of that insurance benefit. The employee’s manager must approve the waiver before it can be put into effect. It is also important to note that the law only allows for a certain number of employees to opt out of workers’ compensation at one time.

Q: How Do I Become Exempt From Workers’ Comp in California?

A: To become exempt from workers’ comp in California, you must own a sole proprietorship. In this case, you are automatically exempt, meaning you don’t have to provide coverage for yourself. Under California law, your spouse may also be included as a co-owner, so they may also be exempt as well. In certain circumstances, you may choose to include your own workers’ compensation policy, but know that some insurance companies will not cover a sole proprietorship.

Q: Can You Waive Workers’ Compensation Claim Rights in California?

A: No, you cannot waive workers’ compensation claim rights in California in most cases. It is generally illegal to ask employees to sign a waiver to not receive workers’ compensation benefits. The only exception to this is if a board member, executive owner, or executive officer wishes to waive their benefits. However, they should have very good disability and health benefits in order to waive workers’ compensation insurance.

Q: Can I Use My Own Insurance Instead of Workers’ Comp in California?

A: No, you should not use your own insurance instead of workers’ comp in California. If you have sustained an injury while at work, only workers’ compensation should be used to pay for medical treatment. By using your personal health insurance, you are essentially lying by saying that the injury was not work-related.

Consult With a Workers’ Compensation Attorney

If you are an employer who needs assistance in navigating workers’ compensation claims, consider consulting a worker’s compensation attorney. Contact us at Bober, Peterson & Koby, LLP, where we provide legal counsel specific to your business’s needs.