California Workers' Compensation Law: The Basics (2026)

Employer Obligations to Carry Workers’ Compensation Insurance

California has some of the strictest workers’ compensation requirements in the country. California Labor Code states that businesses with one or more employees must have workers’ compensation insurance.

What the Law Defines as a Work-Related Injury or Illness

California workers’ compensation law defines an injury or illness as work-related if a workplace event or exposure:

• Caused an injury/illness
• Contributed to an injury/illness
• Aggravated an existing condition

There are some exceptions. For instance, if you were intoxicated or engaging in horseplay at the time of the injury, workers’ compensation will likely decline to cover it.

Legal Rights of Injured Employees Under California Law

If an employee has a work-related illness or injury, they are entitled to medical care and disability benefits. They are also protected from employer retaliation.

If an injured employee’s claim is approved, they may be entitled to the following benefits:

Medical Care

Typically, an employer’s workers’ compensation insurance policy will cover 100% of necessary medical care.

Temporary Disability Benefits

If you have to take time off work while your injury heals, you may collect temporary disability benefits. Usually, the benefit amount is two-thirds of your average weekly wage.

Permanent Disability Benefits

If your injury causes permanent impairment, you might be entitled to permanent disability benefits. These are typically paid in installments.

Supplemental Job Displacement Benefits

If your injury means you may no longer perform your old job duties (but you’re capable of working on some level), you might qualify for supplemental job displacement benefits (SJDB). This benefit includes a voucher you may use for education or training needed to pivot into a new career.

Death Benefits

If your work injuries or illness prove to be fatal, your family may receive compensation.

Statutory Deadlines and Filing Requirements Employers Must Follow

If you’re an employer, staying compliant with California workers’ compensation laws is essential. It’s not just the ethical thing to do. If you violate an employee’s rights (even accidentally), you might face fines and other penalties.

These are some key employer deadlines to be mindful of:

Providing the DWC-1 Form

Generally, an employer must provide an employee with a DWC-1 claim form within one working day of their injury report. The DWC-1 should have the employer’s section filled out. Employers should also forward the claim to the insurance company within a working day.

Filing an Employer's First Report of Injury or Illness

An Employer's First Report of Injury or Illness (also known as a Form 5020) must be filed within five days of the employer’s knowledge of the injury. However, this form only needs to be filed if at least one of these two conditions is met:

• The injury required treatment beyond first aid
• The injury required the employee to take time off work (not counting the day of the incident)

Employers who have a traditional workers’ compensation insurance policy should file this form with their insurance providers. Those who self-insure must file with the Division of Labor Statistics and Research (DLSR).

Making a Claim Decision

This deadline is technically for the claims administrator, not the employer. The claims administrator has 90 days to make a decision on the claim. If they don’t make a decision within 90 days, the claim is automatically approved.

Providing Early Medical Treatment

Many work injuries require immediate, substantial medical care. Even if an employee files a workers’ compensation claim, medical benefits aren’t paid instantaneously.

To help ensure that injured employees receive the medical care they need, California requires workers’ comp claim administrators to cover up to $10,000 in medical care during the 90-day claim decision window.

Penalties for Employer Non-Compliance With California Workers’ Comp Laws

California workers’ compensation law imposes steep penalties on employers without proper coverage. Employers found to be in violation of the law could owe up to $100,000 in fines and spend up to a year in jail.

Dispute Resolution & Appeals Process Under State Law

If your claim is denied, you have 20 days—or 25 days if the decision was mailed to you—to file a Petition for Reconsideration. Here’s what happens next:

• The Workers’ Compensation Appeal Board (WCAB) has 60 days to make a decision
• If the appeal is denied, you may request a writ of review with the California appellate court
• If this is unsuccessful, you may file an appeal with the California Supreme Court

You may also file an appeal with the California Department of Insurance (CDI). You have 30 days from the denial of your Petition for Reconsideration to do so.

Need Legal Help?

If you’ve been severely injured or are having issues getting your claim approved, a California work injury lawyer can help. ConsumerShield can match you with qualified workers' compensation lawyers anywhere in California - from Los Angeles to San Diego. Fill out our contact form for a free case review!