Is workers comp required in California?
California requires every employer with even one employee to carry workers compensation or obtain a certificate to self-insure. Owners, partners and corporate officers are treated under their own rules, and some workers such as certain agricultural or domestic employees may be handled differently.
Buying coverage in California
Coverage in California is sold by private insurers. Every state also has a market of last resort, so even higher-risk or brand-new businesses can generally find a policy. California also has a competitive state-chartered carrier, State Compensation Insurance Fund, that sells coverage alongside private insurers.
Who sets the rules
The California Division of Workers' Compensation (DWC) oversees workers comp in California. Classifications and loss costs in California come from the Workers' Compensation Insurance Rating Bureau of California (WCIRB), an independent rating organization, so codes and rules can differ from NCCI states.
What California employers should know
- California uses its own classification system maintained by the WCIRB rather than NCCI codes, so class descriptions from other states may not translate directly.
- Contractor licensing rules in California have been expanding workers comp requirements to contractors even without employees; check current rules with the Contractors State License Board.
California also runs State Disability Insurance (SDI), which is funded through employee payroll withholding administered by the Employment Development Department, separate from workers comp. See statutory disability coverage.
California facts employers ask about
California Labor Code section 3700 requires every employer to secure workers compensation, either by insuring with a licensed carrier or by obtaining a certificate of consent to self-insure from the Department of Industrial Relations. Operating without coverage is a misdemeanor, and the Labor Commissioner can issue a stop order that halts work until coverage is in place, in addition to penalties.
Employers can buy coverage from private insurers or from State Compensation Insurance Fund, a public carrier that competes with private companies and also writes businesses other insurers decline. The Workers' Compensation Insurance Rating Bureau of California maintains the state's own classification system and publishes advisory pure premium rates; each insurer then files its own rates, so prices for the same class can differ noticeably between carriers.
Contractors face an extra rule: under Senate Bill 216, Contractors State License Board licensees in certain classifications, starting with roofing, must carry workers comp even with no employees, and the requirement was scheduled to extend to all licensed contractors from January 1, 2026. Check your license status with the CSLB before renewing.
Sources: California Division of Workers' Compensation; WCIRB of California; Contractors State License Board. Rules change; confirm current requirements with the agency before you rely on them.
How premiums are calculated
Your California premium starts with payroll in each job classification. Experience mods, schedule credits and minimum premiums then adjust it, and the year-end audit settles the difference between estimated and actual payroll. Learn more about how workers comp rates work and preparing for an audit.
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California workers comp FAQ
Is workers comp required in California?
California requires every employer with even one employee to carry workers compensation or obtain a certificate to self-insure. Rules and exceptions change, so confirm your situation with the state agency or an agent.
Who oversees workers comp in California?
The California Division of Workers' Compensation (DWC) administers the workers compensation system in California.
Can I buy California workers comp from a private insurer?
Yes. Private insurers write workers comp in California, and a market of last resort is available for businesses that are hard to place.
How is workers comp priced in California?
Classifications and loss costs in California come from the Workers' Compensation Insurance Rating Bureau of California (WCIRB), an independent rating organization, so codes and rules can differ from NCCI states. Your California premium starts with payroll in each job classification. Experience mods, schedule credits and minimum premiums then adjust it, and the year-end audit settles the difference between estimated and actual payroll.