The penalty for failing to obtain workers compensation coverage is what percentage of the compensation paid

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

The penalty for failing to obtain workers compensation coverage is what percentage of the compensation paid

Explanation:
When an employer fails to obtain workers’ compensation coverage, the penalty is a civil amount tied to the wages paid to employees during the uninsured period. The statute sets this penalty at 10% of the compensation paid. This means the more wages you’ve already paid, the larger the penalty, at a fixed rate rather than a fixed dollar amount or a higher percent. For example, paying $20,000 in wages while uninsured yields a $2,000 penalty. The other percentages aren’t used because the law specifies 10% for this penalty.

When an employer fails to obtain workers’ compensation coverage, the penalty is a civil amount tied to the wages paid to employees during the uninsured period. The statute sets this penalty at 10% of the compensation paid. This means the more wages you’ve already paid, the larger the penalty, at a fixed rate rather than a fixed dollar amount or a higher percent. For example, paying $20,000 in wages while uninsured yields a $2,000 penalty. The other percentages aren’t used because the law specifies 10% for this penalty.

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