California workers comp requirements decide exactly when an employer must carry coverage, who counts toward the threshold, and the penalty for going without. This guide breaks down the California workers comp requirements in plain English. (Injured instead of hiring? See our California settlement and claim guides linked below.) All figures are from California sources, verified as of June 2026.
California at a Glance
| Required at | 1 employee(s) |
| Which workers count | Coverage is mandatory the moment an employer has one or more employees of any kind — full-time, part-time, temporary, or seasonal all count toward the threshold; in addition, as of January 1, 2026 every active CSLB-licensed contractor must carry coverage regardless of whether they have any employees (this began with C-39 roofers and expanded to all license classifications). |
| Who is exempt | Sole proprietors and single-member LLC owners with no employees are not required to cover themselves; qualifying corporate officers/directors, working LLC members, and general partners may opt out by signed written waiver; certain domestic workers (e.g., employed under 52 hours or earning under 100 dollars in the 90 days before injury), some casual/incidental labor, and specified volunteers are excluded under Labor Code 3351–3352. |
| Penalty for going without | Failing to carry required coverage is a misdemeanor under Labor Code 3700.5, punishable by up to 1 year in county jail and/or a fine of not less than 10000; the DLSE may issue a stop order halting all operations (ignoring it is a separate misdemeanor carrying up to 60 days jail and/or up to 10000) and may assess the greater of twice the unpaid premium or 1500 per employee, with additional state penalties up to 100000; if an injured worker’s claim is found compensable, the WCAB may assess 10000 per employee on payroll at the time of injury (or 2000 per employee if non-compensable), up to 100000. |
| Monopolistic state? | No — private carriers |
In This California Guide:
Is Workers’ Comp Required in California?
Yes — California requires every employer to carry workers’ compensation insurance from the very first employee, even a single part-time worker, under Labor Code Section 3700.
California Workers’ Comp Requirements at a Glance
Here are the exact California workers comp requirements every employer should know:
| Employees that trigger the mandate | 1 |
| Which workers count | Coverage is mandatory the moment an employer has one or more employees of any kind — full-time, part-time, temporary, or seasonal all count toward the threshold; in addition, as of January 1, 2026 every active CSLB-licensed contractor must carry coverage regardless of whether they have any employees (this began with C-39 roofers and expanded to all license classifications). |
| Who is exempt | Sole proprietors and single-member LLC owners with no employees are not required to cover themselves; qualifying corporate officers/directors, working LLC members, and general partners may opt out by signed written waiver; certain domestic workers (e.g., employed under 52 hours or earning under 100 dollars in the 90 days before injury), some casual/incidental labor, and specified volunteers are excluded under Labor Code 3351–3352. |
| Owners & officers | Yes — a corporate officer or director who owns at least 10 percent of the company’s stock (or at least 1 percent with a close family member owning at least 10 percent) and is covered by health insurance may exclude themselves by filing a signed written waiver with the insurer; working LLC members and general partners may likewise opt out via written waiver. |
| Penalty for going without | Failing to carry required coverage is a misdemeanor under Labor Code 3700.5, punishable by up to 1 year in county jail and/or a fine of not less than 10000; the DLSE may issue a stop order halting all operations (ignoring it is a separate misdemeanor carrying up to 60 days jail and/or up to 10000) and may assess the greater of twice the unpaid premium or 1500 per employee, with additional state penalties up to 100000; if an injured worker’s claim is found compensable, the WCAB may assess 10000 per employee on payroll at the time of injury (or 2000 per employee if non-compensable), up to 100000. |
| Monopolistic state? | No — buy from private carriers |
| State fund | Yes — the State Compensation Insurance Fund (State Fund / SCIF), a competitive (not monopolistic) state fund. |
How to Get Workers’ Comp Coverage in California
A California employer obtains coverage from any licensed private insurance carrier, from the State Compensation Insurance Fund (the insurer of last resort / assigned-risk market), or — if qualified and approved by the DIR — by self-insuring.
Private market: YES
What Workers’ Comp Covers in California
Workers’ compensation is a no-fault system: an injured employee gets benefits without having to prove the employer did anything wrong, and in exchange gives up the right to sue for most workplace injuries. A typical California policy pays for medical treatment tied to a work injury, part of the wages lost while the worker recovers, longer-term disability benefits if the injury is permanent, and death benefits to a family.
It also includes employers-liability coverage, which protects the business if an injury still leads to a lawsuit.
Employees vs. Independent Contractors in California
The most common way employers get the California workers comp requirements wrong is by assuming a worker is an “independent contractor” who does not count. State agencies look at how the work is actually controlled, not the label on a 1099. If California decides a contractor was really an employee, the business can owe back premiums and penalties as if coverage should have been in place all along.
When you are close to the employee threshold, confirm each worker’s status with your state board before you decide you are exempt.
Other California workers’-comp rules: As of January 1, 2026, all active CSLB-licensed contractors must hold a valid certificate of workers’ compensation insurance whether or not they have employees (previously limited to C-39 roofers, then expanded in 2023 to C-8, C-20, C-22, and D-49); failure to maintain continuous coverage results in automatic suspension of the contractor’s license.
California also recognizes an “uninsured employers” benefit pathway (UEBTF) so injured workers of illegally uninsured employers can still recover benefits.
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Understanding California Workers Comp Requirements
The California workers comp requirements exist so injured employees get care and lost wages without having to sue. For most employers, the California workers comp requirements come down to one number: the employee count that triggers the mandate, shown in the table above. Once you hit that count, California workers comp requirements apply whether you planned for them or not, and the penalty for going without is real.
If any part of the California workers comp requirements is unclear, your state board can confirm the threshold, the exemptions, and how to get covered.
Need to get covered? If you are an employer in California shopping for a policy, our sister site compares small-business insurance, including workers’ comp. Compare business insurance options →
Frequently Asked Questions
Is workers’ comp required in California?
Yes — California requires every employer to carry workers’ compensation insurance from the very first employee, even a single part-time worker, under Labor Code Section 3700.
What is the penalty for not having workers’ comp in California?
Failing to carry required coverage is a misdemeanor under Labor Code 3700.5, punishable by up to 1 year in county jail and/or a fine of not less than 10000; the DLSE may issue a stop order halting all operations (ignoring it is a separate misdemeanor carrying up to 60 days jail and/or up to 10000) and may assess the greater of twice the unpaid premium or 1500 per employee,
with additional state penalties up to 100000; if an injured worker’s claim is found compensable, the WCAB may assess 10000 per employee on payroll at the time of injury (or 2000 per employee if non-compensable), up to 100000.
Who is exempt from California workers’ comp?
Sole proprietors and single-member LLC owners with no employees are not required to cover themselves; qualifying corporate officers/directors, working LLC members, and general partners may opt out by signed written waiver; certain domestic workers (e.g., employed under 52 hours or earning under 100 dollars in the 90 days before injury), some casual/incidental labor, and specified volunteers are excluded under Labor Code 3351–3352.
Official California Sources & Resources
- California Division of Workers’ Compensation (DWC), within the California Department of Industrial Relations (DIR); disputes are heard by the Workers’ Compensation Appeals Board (WCAB).: https://www.dir.ca.gov/dwc/
- California Workers’ Comp Statute: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3700.&lawCode=LAB
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
These California workers comp requirements were last verified against official sources in June 2026. Rules and penalties change — confirm the current figure with your state workers’-comp board or a licensed agent.
More California Workers’ Comp Guides
- California Workers’ Comp Settlements
- How to File a California Workers’ Comp Claim
- Workers’ Comp Guides for All 50 States
Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.