California Workers’ Compensation Premium Assessment Changes (Part 1)

March 20, 2018

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image credit: Africa Studio/shutterstock.com

In November 2017, the California Department of Industrial Relations issued a notice to “All Insurers Authorized to Transact Workers’ Compensation in California” which explained the 2018 workers’ compensation (WC) premium assessments. The new rates increase the total cost of WC for employers.

Most employers overlook their premium assessments listed on their insurance policy. Why? Let’s take a step back to understand what “premium assessments” are and how they affect WC costs.

 

Where to find your CA Assessments

In your worker’s compensation policy, there is a section called “Declaration Pages.” Within the Declarations you will see a section called classifications and/or rating schedule. Typically, at the bottom of this page you will see various lines labeled: “CA […..] Assessment” or something similar.

These “CA Assessments” are from the Department of Industrial Relations. They assess employers for the costs of the administration of the workers’ compensation, health and safety and labor standards enforcement programs. According to the California Department of Industrial Relations, “These assessments provide a stable funding source to the support operations of the courts, to ensure safe and healthy working conditions on the job, to ensure the enforcement of labor standards and requirements for workers’ compensation coverage.”

 

Why are there CA Assessments?

Some of the Workers’ Compensation Premium Assessments (WCPA) began in 2008 due to a budgetary crisis in CA. The WCPA was a funding shift designed by the California legislature to stabilize funding for the Department of Industrial Relations (DIR) operations, which includes:

  • Divisions of Workers’ Compensation, Occupational Safety and Health (DOSH) and
  • Division of Labor Standards Enforcement (DLSE)

The assessments were intended to continue funding the efforts of both DOSH and DLSE, who rely upon stable budgets to provide California employers with benefits including:

  • Enforcement of programs to eliminate the underground economy
  • Labor law enforcement activities to ensure a more competitive business environment by pursuing employers who break employment laws
  • Pursuing uninsured employers who fail to carry workers’ compensation coverage for their workforce
  • Ensuring workplace safety
  • Providing compliance assistance to employers who are striving to increase safety on their jobsites
  • Decreasing injuries, illnesses and fatalities at jobsites across the state

 

Next week we will share how the 2018 premium assessment increase will affect you and your company.  If you have any questions regarding the CA Assessments on your workers compensation policy, discuss these items with your insurance Broker or contact the California Department of Industrial Relations - Division of Workers’ Compensation at DWC@dir.ca.gov or 1-844-522-6734.

Stop paying more than you should for Workers Compensation insurance

Topics: Claims, Workers' Compensation

Written by Nick Langer