When it comes to workers’ compensation, employers are often unclear on what their obligations are beyond having workers’ comp insurance. California workers’ compensation laws can be quite complex, especially when it comes to figuring out how much an employee is owed for their injuries. For employers who have a third-party insurance carrier, the insurance company will be responsible for actually resolving and paying out claims. However, there are still certain obligations that an employer owes to employees who are injured in the workplace.
California law requires all employers with at least one employee to have workers’ compensation insurance. Because the consequences of failing to secure workers’ compensation insurance can be severe, this should be one of the first steps that you take when starting a new business. In addition to hefty fines imposed by the state (up to $100,000), a business owner can be found guilty of a misdemeanor and face additional criminal fines or even possible jail time. What’s more, employers who are uninsured open themselves up to being sued in court by injured workers. And, if an injured employee receives compensation from the Uninsured Employers Benefits Trust Fund (a state-administered fund to cover injured workers whose employers had no insurance), the state has the right to come after the uninsured employer for reimbursement.
As an employer, you must comply with various posting and notice requirements. The California Division of Workers’ Compensation publishes a “Notice to Employees” poster, which must be posted somewhere at the workplace where employees can easily see it. The notice must include specifics about your insurance policy, including the name of your insurance carrier and the expiration date of the policy. You’re also required to provide a workers’ compensation pamphlet to all employees upon hire.
If you’ve established a medical provider network (MPN), you must also give a separate notice to employees when they are hired and after they report an injury. An MPN is a network of health care professionals, set up by your insurance company, whom injured workers must seek treatment from. However, you must first give employees the opportunity at the time of hire (and on an annual basis) to designate their own primary care doctors to treat them in the event of a work injury. This is done by giving employees a notice of their right to “predesignate” a doctor.
These notices and forms, and any others that may be required, are available from your insurance carrier.
After you’re notified of a workplace injury, you must provide a workers’ compensation claim form to the employee and then return a completed copy to your insurance carrier. The DWC-1 claim form is available from your workers’ compensation carrier or on the forms page of the website of the Division of Workers’ Compensation.
There is a short turnaround time for getting the form to the employee and then to the insurance company. You must provide the form to the employee within 24 hours of the injury (or upon receiving notice of or hearing about the injury). Once the employee returns the claim form, you have 24 hours to fill in the remaining portion of the form and forward it to your insurance carrier.
Once a workers’ compensation claim is made, you must authorize up to $10,000 in medical treatment while the insurance company decides whether to accept or deny the claim. You should notify the injured worker within 24 hours of the injury that such treatment is authorized.
In addition to filing the claim, there are separate reporting requirements. In general, when an employee receives any treatment beyond first aid or is going to miss any work due to the injury, you must fill out an “Employer’s Report of Occupational Injury and Illness” form within five days. For serious workplace injuries that result in death or an employee being hospitalized for more than 24 hours, you must also immediately report it to the California Division of Occupational Safety and Health (Cal OSHA).
When it comes to the actual process of evaluating a workers’ compensation claim, your role as the employer is usually quite limited (unless you are self-insured or you administer your own claims). Your insurance carrier will investigate the claim and make a decision about whether it should be accepted or denied.
You should cooperate with requests for information from your insurance company and, if necessary, facilitate communications between the employee and the insurance company. The insurance company is obligated to keep you informed along the way and seek your approval of any settlement that’s offered to the employee. For a general overview of the workers’ compensation system, see Nolo’s article Workers’ Compensation Basics for Employers.
In general, injured workers are not entitled to any special treatment under the law. However, they also can’t be singled out for poor treatment because of their workers’ comp claims. And, if their injuries qualify as disabilities, they may be entitled to accommodations under state and federal law. When dealing with employees who have filed workers’ comp claims, employers must follow a couple of well-established rules that prohibit retaliation and discrimination in the workplace.
By law, employers are prohibited from taking any negative action against an employee for filing a workers’ compensation claim (in legal terms, this is called “retaliation”). If an injured worker is an at-will employee, you can still fire or layoff that employee as long as it is not because of the workers’ comp claim. Practically speaking though, firing an employee who has a pending workers’ comp claim is going to look highly suspect unless you can point to a legitimate, documented reason for the decision (such as multiple disciplinary write-ups or companywide layoffs). Because a retaliation claim can come with hefty penalties (up to $10,000 in California), you should consult with a lawyer before firing or taking other negative actions against an employee with a workers’ comp claim.
When dealing with an injured worker’s return to work, employers must also be mindful of the Americans with Disabilities Act (ADA). The ADA is the federal law that prohibits employers with 15 or more employees from discriminating against employees based on their disabilities. In addition, California’s Fair Employment and Housing Act (FEHA), which protects employees with disabilities from discrimination, applies to employers with just five employees. Under both laws, if an employee’s injuries qualify as a disability, you have a duty to adjust the employee’s responsibilities or working conditions as a reasonable accommodation. For more information on the definition of “disability” and on an employer’s duty to accommodate, see Nolo’s article Disability Discrimination in the Workplace: An Overview of the ADA.