California regulators take workers’ compensation violations very seriously. Failure to carry workers’ comp insurance is a criminal offense in California. Penalties for not having workers’ comp insurance include:
A stop order being issued for the business in violation. Failing to obey the stop order could result in a fine of $10,000 or more and imprisonment in county jail for up to one year.
A penalty could be assessed by the California Division of Labor Standards Enforcement. This penalty could be twice the amount of money the employer would have paid in premiums during the time of non-compliance or $1,500 per employee during the time of non-compliance.
The Uninsured Employer’s Benefit Trust Fund may file a lien against the employer’s property if they need to pay benefits to an injured worker who was hurt while the employer was in non-compliance.
If a worker is injured and their employer did not have workers’ compensation insurance, then the employer may be liable for a $10,000 penalty per employee at the time of the workplace injury if the injury is compensable. If the injury is non-compensable, the employer could still face a fine of $2,000 per employee at the time of the incident. The maximum penalty for these violations is $100,000.