Who pays for the Workers’ Compensation Insurance?
All employers in California, even if they have only one employee, are required to have some form of insurance incase any employee suffers an injury or sickness while, or caused by, their job. This insurance then covers the Workers’ Compensation benefits the employer gets. Employers could acquire such form of insurance through a state-run program, insurance companies, or self-insurance. Employers who get Workers’ Compensation Insurance through a state-run program must pay a premium to the programs, which then disburse the money in form of benefits to the employee when there is claim. This form of insurance is typically used by small business or businesses with a low-danger workplace.
Other business prefer to buy Workers’ Compensation Insurance from private insurance companies, these companies will ultimately provide the Workers’ Compensation benefits to an employee when a claim is filed.
Another alternative is self-insurance, where large business, who prove to be self sufficient to pay for the Workers’ Compensation benefits themselves. This is usually the case with bigger companies who do not experience may work injuries and are willing to take the risk of paying for it themselves.
By law, the employer and only the employer is responsible for paying for workers compensation insurance. Under no circumstances can the employee be asked to, or give, any part of their wages to cover the Workers’ Compensation Insurance. This Workers’ Compensation is set to be an agreement between employer and employee where, in the unfortunate case that an accident or sickness does occur at or because of the workplace, the employee does not pay for any medical expenses, treatment, or suffer total lost of wages.
With such benefits, the employee then can not sue their employer for their injury or sickness since they are insured. Only in rare and special occasions can this happen but this is a talk for another blog post. The only thing I will say is that taking your employer to court and filing a lawsuit against them is only allowed in the case that the employer does not have any Workers’ Compensation Insurance in the first place. This is the case because in California, failing to have Workers’ Compensation Insurance is a criminal offense.
Bottom lineYou should not provide any financial help to your employer to fund a Workers’ Compensation insurance, the employer should finance that themselves either through a state-run program, an insurance company, or are self-insured.
NOTICE: Making a false or fraudulent Workers Compensation claim is a felony subject to up to 5 years in prison or a fine of up to $50,000 or double the value of the fraud, whichever is greater, or by both imprisonment and fine.