Types of California workers’ comp exemptions

In California, more than 50% of the state’s employees are covered by workers’ compensation insurance. Nearly every employer who has employees must provide this type of insurance. Even so, there are exceptions that allow some employers to avoid fulfilling this requirement.

Who qualifies for exemptions

California provides exemptions that don’t require certain companies to provide workers’ comp to their employees. Exempt companies have few workers, have employees who work a short amount of time each year or have employees who earn relatively low wages. Examples include businesses that employ independent contractors, volunteers, domestic workers, deputy sheriffs or clerks.

Certain types of businesses can opt out of workers’ comp requirements, such as sole proprietorships, partnerships and limited liability companies. Businesses that have no employees are exempt if they are sole proprietors, partners or LLC members. Corporate directors or officers are exempt if they own at least 15% of the corporation’s stock. Additionally, self-employed individuals are not required to obtain workers’ compensation insurance for themselves. Additional details about the list of excluded workers is covered in the California Labor Code Sections 3351 and 3352.

Showing proof of insurance

Employers need to provide a Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to prove their coverage upfront. Otherwise, they need to provide an exemption form that they have no employees or insurance requirements.

Determining your exemptions

A few workers’ comp exemptions are provided to employers who have limited obligations to their workforce. However, most employees in California are covered by workers’ comp, including undocumented workers and green card holders, for when they get injured on the job. If employers or employees are unsure, they can view a full list of excluded workers and coverage requirements online.