November 27, 2024 | Oakland, CA — MedLegalNews.com – The California Department of Industrial Relations (DIR) has issued the 2025 assessments that workers compensation insurers must collect from policyholders. These funds will cover the budget for the state Division of Workers Compensation (DWC) and five related programs established by state lawmakers.
Insurers must apply the following rates to their policyholders’ estimated annual assessable premiums for workers compensation policies starting from January 1, 2025, through December 31, 2025. The updated rates reflect the ongoing effort to maintain fair funding for California’s workers compensation system and ensure consistent program oversight across all covered employers.
Assessment Rates for Insured Employers
| 2025 WC Administration Revolving Fund Assessment | 0.012370 |
| 2025 Uninsured Employers Benefits Trust Fund Assessment | 0.000818 |
| 2025 Subsequent Injuries Benefits Trust Fund Assessment | 0.030148 |
| 2025 Occupational Safety & Health Fund Assessment | 0.001885 |
| 2025 Labor Enforcement & Compliance Fund Assessment | 0.001058 |
| 2025 WC Fraud Account Assessment | 0.004096 |
State law requires insurers to advance funds on behalf of their policyholders. Specifically, the first installment is due no later than Tuesday, January 1, 2025, while the remaining balance must be paid by Wednesday, April 1, 2025. In the meantime, insurers recover these funds through surcharges and assessments applied to all workers’ compensation policies with 2025 inception dates. Moreover, the DIR memo issued this week further clarifies the methodologies used for calculating these assessments. As a result, the process ensures transparency and consistency in the collection and allocation of these funds.
For single carriers not part of an insurer group, the memo clarifies that the “Total California Direct Written Premium” for assessment purposes is based on the amount reported to the WCIRB for 2023. This amount reflects premiums charged to policyholders, excluding deductible credits, retrospective rating adjustments, and policyholder dividends.
On the other hand, insurers that belong to a reporting group must calculate their “Total California Direct Written Premium” differently. Specifically, they should multiply the total 2023 written premium reported to the WCIRB by the ratio of their individual 2023 California written premium, as reported in the 2023 Statutory Annual Statement, to the total 2023 California written premium for the entire insurer group. This method ensures that, rather than over- or under-allocating assessments, the group’s premiums are distributed accurately among the individual insurers. Consequently, the proper allocation reflects each insurer’s contribution to the group’s overall premium.
By following these guidelines, insurers can maintain compliance while ensuring the proper distribution of assessment costs.
Assessment Rates for Self-Insured Employers
| 2025 WC Administration Revolving Fund Assessment | 0.018754 |
| 2025 Uninsured Employers Benefits Trust Fund Assessment | 0.001085 |
| 2025 Subsequent Injuries Benefits Trust Fund Assessment | 0.057041 |
| 2025 Occupational Safety & Health Fund Assessment | 0.001177 |
| 2025 Labor Enforcement & Compliance Fund Assessment | 0.000123 |
| 2025 WC Fraud Account Assessment | 0.006624 |
More details for insurers are in the memo that DIR posted under “What’s New” at https://www.dir.ca.gov/dwc/. The state is mailing the memos along with invoices for each company’s share of the assessments and surcharges to California workers’ comp insurers, self-insured employers and legally uninsured employers.
Anyone with questions about the 2025 surcharges and assessments may email them to DIRDWC_Assessment@dir.ca.gov.
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FAQs: Understanding the 2025 California Workers Compensation Assessment Rates
What are the 2025 California workers compensation assessment rates?
The 2025 California workers compensation assessment rates are funding contributions that insurers and self-insured employers must collect to support the state’s Division of Workers’ Compensation and related programs.
Who is responsible for collecting these assessments in California?
Insurance carriers collect the required workers compensation assessments from policyholders and remit them to the Department of Industrial Relations (DIR) on specific due dates outlined in the annual assessment memo.
How do insurers calculate their total assessable premium for 2025?
Insurers use their 2023 California direct written premium data reported to the WCIRB to calculate assessable premiums. The DIR memo explains detailed formulas for both individual carriers and insurer groups.
Where can employers find official information on the 2025 assessment rates?
Employers and insurers can access the full 2025 California workers compensation assessment memo and related materials on the DIR website’s “What’s New” section.