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

• A. 10%
• B. 15%
• C. 20%
• D. 50%

Answer: (A)

When an employer in California fails to obtain workers’ compensation coverage, a civil penalty is assessed that equals 10% of the wages or compensation paid to the employees during the period without coverage. This per‑employee penalty unit is designed to deter noncompliance and to ensure workers are protected in the time they weren’t covered. The amount is straightforward: multiply the wages paid in the uncovered period by 0.10 to get the penalty. For example, $10,000 paid to employees during the noncovered period would incur a $1,000 penalty. Other penalties or penalties for different behaviors can exist, but the standard penalty for not securing coverage is 10% of compensation paid.