Workers’ Comp Questions: California

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The state of California has some unique workers’ comp stipulations. To understand what Workman’s Comp is and how workers’ comp payments in California work, you will need to look at workers’ compensation as a whole

What is Workers’ Comp?

Workers’ compensation insurance is for people who have become injured or ill at their job. It provides medical and wage benefits to help with expenses and living cost. State coverage is mandated, and medical benefits and wages vary from state to state. Workers’ compensation relies on social contact between management and labor, and is considered social insurance. In exchange for buying compensation insurance, business owners are protected from being sued in a civil suit if their employees become injured or ill on the job.

Each side’s benefits do have limitations. Businesses buy workers’ compensation insurance, and it’s underwritten by insurance companies. In some states, however, it’s financed by state funds, which are publicly supported.

What worker’s compensation does is provide lost wages, medical expenses, and rehabilitation costs to employees who have been injured or became ill in the course of doing their job. If an employee is killed on the job, it will also pay death benefits to the employee’s family.

How is Workers’ Comp Calculated?

The workers’ comp insurance premium depends on the classification of the type of work an employee performs, as well as the rate that’s assigned to that classification. Premium percentage is communicated in dollars and cents per $100 dollars of payroll for each employee’s class rating.

The National Council for Compensation Insurance determines the classification rate and the experience modification factor. There are three factors that make up workers’ comp premiums:, the employer’s payroll size, employee job classifications, and the claims experience of the company.

Workers’ compensation insurance premiums are calculated by this formula:

Payroll (per $100) X Classification Rate X     Experience Modifier = Premium

The employer’s payroll is the basis for their workers’ comp premium. For each $100 there is a specific rate determined by the employees’ classification codes.

Employers can choose to spread their premium payment out over a year instead of paying one lump sum. In this case it’s a good idea for businesses to have a payroll provider that will give the option of having the premium deducted from each payroll period.

How Much Does Workers’ Comp Pay in California?

Each year the California Department of Industrial Relations publishes a minimum and maximum workers’ compensation rate. An employee who pursues a workers’ compensation claim in the state can receive two-thirds of their pretax gross wages up to this maximum. In 2018, the maximum rate for total disability was $1,215.27 a week, and the minimum was $182.29. Average workers’ comp rates California fall between those two figures.

Some companies offer what’s called Disability Leave with Pay. In this program, the employer will actually make up the salary difference so the employee can receive their regular income.

Workers’ Comp Calculator California

To calculate the workers’ compensation rate in California follow these steps.

 

  • Obtain the employees salary. For example, $78,00 annually.
  • Calculate the employee’s weekly pay amount. So if they make $78,000 annually, that would be $1,500 a week, or $37.50 an hour.
  • Determine the maximum amount of workers’ compensation this employee can get. This is two thirds of the weekly pay amount. In the example of the employee that makes $78,000 annually, two thirds of the weekly salary will be $1,000.

 

If the employee works for a company that offers Disability Leave with Pay, subtract the amount of workers’ compensation from the weekly pay amount this employee can get, and the rest will be paid by the employer. In this case, $500.

How to File For Workers’ Comp in California

Now that you understand how workers’ compensation is calculated and how workers’ comp works in California, let’s review how to file.

The first thing to know and remember is that you need to file on time.  

In order to file a workers’ compensation claim, first you have to report your injury, then file a claim with your employer, and finally file an Application for Adjudication of Claim with the Workers’ Compensation Appeals Board. Make sure to meet the deadline for this last step, or the insurance company might not provide or continue benefits.

When to Apply for Workers’ Comp in California

To apply for workers’ compensation in California, you’ll want to do it as close as possible to the date of your injury. If you were hurt in an accident, the date will be clear, and will correspond to your accident. In other cases, however, you might have a disease or injury that builds over time, like lung disease from chemical exposure, heart disease from stress, or a repetitive strain injury.

For these types of workers’ comp claims, the “date of injury” will correspond to the date you first missed work or saw a doctor, or when you found out your work caused the issue — when your doctor explained the connection, for example.

Get treatment immediately after you’ve been injured. You may have to go to a doctor in network of your employer’s insurance carrier. Tell them that you were injured on the job.

Shortly after that, report the problem to your employer. If you don’t let them know in 30 days after the injury, it’s possible that you might lose your right to these benefits. But at the end of the day, you want to make sure to report it as soon as possible, so you get the workers’ comp benefits as soon as possible.

Your employer will give you a workers’ compensation claim form a day after reporting the injury. The form is called DWC-1 and you can also download it from the California Workers’ Compensation website. You should also receive information about your rights, the benefits you’ll receive, and how to get them. When filling out the form, be specific and detail all parts of your body that were injured. Submit the form back to your employer, who will then fill out the rest and sent it to their insurance company.

How Does Workers’ Comp Work in California?

When you send in the claim the insurance company will investigate it, but also authorize payment for medical treatment. Before making a decision, the company is responsible to pay up to $10,000. The claim will be approved if it isn’t denied within 90 days.

You may not be able to go to work at this time. If that’s the case, you’ll receive temporary disability payments from the insurance company within two weeks after it finds out about your injury or illness. The company will incur a late fee if they deny the claim, ask for more information, or delay these payments longer than two weeks.

Keep in mind that you may encounter disagreements with the insurer, and they may deny your claim. To resolve disputes, you’ll need to complete another step, and file an Application for Adjudication of Claim with the Workers’ Compensation Appeals Board. This has to happen within a year after your date of injury, your final day of disability benefits, or the last day of medical benefits from your employer, or within a year after you learn about the claim being denied.

Now you know the basics of how workers’ compensation works in the state of California. As you can see the state has unique workers’ compensation stipulations. If you have any questions about your specific circumstances, it’s a good idea to reach out to a workers’ compensation attorney who will be well versed in these laws.

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