Workers' Comp in California: What Every Employer Needs to Know

California has the 4th highest workers' comp rates in the nation. Learn what's required, what it costs, and how AB5 affects your obligations.

State Guides | 8 min read | 2026-03-10

California's workers' comp system is among the most expensive and strictly enforced in the country. Here's what employers need to know about requirements, costs, penalties, and the AB5 impact.

California requires workers' compensation insurance for every employer — no exceptions. Even if you have just one employee, even if that employee is part-time, you must carry coverage. This is stricter than most states, where thresholds of 3 to 5 employees are common.

In This Article

• California's Workers' Comp Requirements at a Glance
• What Does It Cost? California's Rate Ranking
• The AB5 Impact: Gig Workers and Your Insurance Obligations
• SCIF: California's State Compensation Insurance Fund
• Penalties for Non-Compliance
• Other California Insurance Requirements to Know

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