Workers’ Compensation Insurance, The State Needs to Strengthen Its Efforts to Reduce Fraud

The system for workers’ compensation insurance (workers’ compensation) in California requires employers to provide benefits to employees who are injured or disabled in the course of employment. These benefits include covering the costs associated with health care and other services necessary for injured employees to return to work, providing disability payments, and compensating injured employees who cannot fully return to work. In exchange, employers generally have protection against law suits filed by employees related to workplace injuries. The Department of Industrial Relations (Industrial Relations) is responsible for monitoring the administration of claims filed through the workers’ compensation system, which California has had in place for over 100 years. A 2016 report by Industrial Relations indicates that the workers’ compensation system cost the State’s employers—who pay for the system by either purchasing workers’ compensation policies or self‑insuring—$25.1 billion in 2015.

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