Opening a business is a rough start for many people. Initially, most try to make a go of it on their own for as long as possible. One of the reasons is that workers compensation insurance is mandatory in the state of California if you hire even ONE employee to help run your business.
With minimum wage being slowly increased to 10$ per hour by January 2016 this is a difficult hurdle to overcome for start-ups but the law must be obeyed. The idea of workers compensation need not be so daunting for employers, be they in business for 5 or 50 years.
The trick is to finding the right agent to help you. Workers compensation is broken down into class codes – if your business is misclassified you could potentially be paying a lot more than you need annually.
Limits for workers compensation are standard – 1,000,000/1,000,000/1,000,000 across the board whether you run a retail store of a stock trading company in a high rise building.
When you compare a construction worker to a retail sales employee it should be apparent which one is more likely to get injured on the job. More likely to get injured means that the costs of workers compensation insurance will be higher compared to an employee who works retail.
The good news is that with the WCIRB – the rating bureau for workers compensation in California – you get rewarded for having not had injuries regardless of the job type. There is a rating modification system in place. Depending on what your business is, you have to have X amount of payroll in order to qualify for a rating (small business frequently don’t meet this requirement) but those that do get rewarded for having proper safety practices in place with lower premiums than their competitors.
For more information on the WCIRB see our Resources page, or simply call us to guide you through the process of workers compensation insurance.