Workers Compensation, Watsonville, CA

What is workers' compensation?
Workers' compensation is a state-mandated, "no-fault" insurance system that pays benefits to workers injured on the job to cover medical care, part of lost wages and permanent disability. In return, employers receive immunity from civil lawsuits by employees over such workplace injuries.

    Employers can meet their workers' comp obligation by purchasing insurance or by becoming a state-certified self-insurer.


Does an employer have to carry workers' comp insurance?
Generally, "yes," but there are exceptions. As a general rule, firms with five or more employees must be covered, although contractors with even one employee must also buy coverage. The statutory definition of "Employee" includes both full and part-time employees, seasonal and even temporary employees.

    The Workers' Compensation Act does exempt a very small and very specific group of employees, which includes farm laborers, domestic servants, certain real estate agents and direct sellers and commercial motor-carrier owner-operators.

    Sole proprietors and partners are not themselves covered unless they elect to be covered. On the other hand, close family member-employees and members of limited liability companies are presumed to be covered unless they opt out.

    Employers that don't have the required number of employees or who have employees in the exempt categories may nevertheless "elect" to come under the law. Exempt employers that decide not to purchase workers' compensation insurance or to self-insure remain exposed to civil lawsuits brought by employees who are injured during work.

If your business is in any other industry other than construction and has four or more employees, full-time or part-time, you will be required to carry a workers' compensation policy. Again, an exempted corporate officer does not qualify as an employee.

How do I obtain coverage?
You can purchase workers' comp insurance from a private insurer or, if you can meet the requirements of the Division of Workers' Compensation, you can self-insure as an individual business or as a member of a self-insured group.



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