All businesses in California with one or more employee, must carry a Workers Compensation Insurance, under California labor Code section 3700. Construction business is risky and business owners need protection. Therefore, Construction Workers Compensation Insurance can insure business financial stability. Moreover, it can secure relative peace of mind in case of an employee accident or a lawsuit.
What is Construction Workers Compensation Insurance ?
Workers Compensation Insurance, commonly known as Workers’ Comp. It covers medical expenses and lost wages for employees who become injured or ill on the job. Coverage also includes employee rehabilitation and death benefits. If an employee is hurt by falling from the ladder or get hurt while operating a machinery, work comp will pay for the medical expenses. Worker’s Compensation Insurance will provide coverage for medical expenses, stress-related and other injuries. Furthermore, Work Comp Insurance may not cover an injury after the worker is terminated or laid off. (Source:DIR)
What are the benefits for Construction Workers Compensation Insurance ?
Medical Care is a payment for by your employer, to help you recover from an injury or illness caused by work.
Temporary Disability Benefits are payments if you lose wages because your injury prevents you from doing your usual job while recovering.
Permanent Disability Benefits are payments if you don’t recover completely and your injury causes a permanent loss of physical or mental function.
Death Benefits are payments to your spouse, children, or other dependents if you die from a job injury or illness.(Source:DIR)
Construction Workers Compensation Insurance Cost.
First, Workers’ Compensation cost depends on how risky the jobs of your employees are. Second, each occupation has a risk classification code based on two factors: frequency of injury and likelihood of severe injuries. Lastly, other pricing factors include, such as number of employees/payroll and company’s history of work-related injury.
Penalties for not having Workers Compensation Insurance.
- Penalty 1: Failure to have an active workers’ compensation policy is “a misdemeanor punishable by imprisonment in the county jail for up to one year. Moreover, there will be a fine of up to double the amount of premium, as determined by the court. (Source: CA Labor Code Section 3700.5)
- Penalty 2: The Division of Labor Standards Enforcement will also assess a penalty the greater of (1) twice the amount the employer would have paid in workers’ compensation premiums during the period the employer was uninsured, determined according to subdivision (c). Moreover, the sum of one thousand five hundred dollars ($1,500) per employee employed during the period the employer was uninsured (Source: CA Labor Code Section 3722(b))
Additional Penalties for not having Workers Compensation Insurance.
- Injured worker and no workers’ comp: Additionally, if an injured worker files a Workers’ Compensation claim, and a judge finds the employer does not have insurance as required by law, then employer will have to pay a penalty of $10,000 per employee on the payroll. Furthermore, $2,000 penalty per employee on the payroll at the time of injury. If the worker’s case was non-compensable, up to a maximum of $100,000. (Source: CA Labor Code Section (d) and (f))
- Stop Order: If the California Division of Labor Standards discovers that an employer is operating without workers’ compensation, they will issue a stop order. It is a legal demand to cease all employee labor (See CSLB on Stop Orders). Failure to comply with the Stop Order is a misdemeanor criminal offense. It is punishable by up to 60 days in county jail. Moreover, by a fine of up to $10,000, or both.