Commercial guide
California Workers’ Compensation Requirements and Audits
Understand mandatory employee protection, classifications, payroll estimates, audits, and employer liability.
What to know first
- California employers generally must carry workers' compensation when they have employees.
- Premium is commonly based on payroll, classifications, experience, and carrier factors.
- Final audits can create additional premium or return premium.
California limits and common starting points
Statutory workers' compensation benefits apply. Employer's liability limits commonly begin at $1 million each accident / $1 million disease-policy limit / $1 million disease-each employee.
These are educational benchmarks, not a recommendation for every applicant.California employers generally must maintain workers' compensation coverage when they have employees. Industry-specific rules, officers, owners, contractors, and exclusions require careful review.
Premium starts with estimated payroll and classifications, then is commonly reconciled through an audit. Accurate job descriptions, payroll separation, subcontractor certificates, and ownership records reduce avoidable surprises.
Report operational and payroll changes during the term. General liability does not replace workers' compensation, and independent-contractor labels do not by themselves determine worker status.