December 5, 2025 | SIBTF.org – The California Department of Industrial Relations (DIR) has announced that workers’ compensation premium assessments for 2026 will total approximately 5.2% for insured employers, a slight increase from the current 5%. This adjustment funds the state’s workers’ compensation system, Cal/OSHA, labor law enforcement, and anti-fraud initiatives.
Self-insured employers will face a 7.8% assessment, down from last year’s 8.5%, based on a percentage of indemnity benefits paid to injured employees. Overall, the DIR estimates a need for $2.04 billion to operate the system next year, slightly lower than the $2.06 billion requested for 2025.
How Assessments Are Collected
Insured employers’ assessments are initially paid by workers’ compensation carriers, which then recoup the funds through policy premiums. Self-insured employers make payments directly to the DIR based on indemnity claims. This system ensures that both insured and self-insured employers contribute fairly to maintaining the integrity of California’s workers’ comp system.
Self-insured employers make their payments directly to the DIR based on the total indemnity benefits paid to injured workers throughout the year. Because these payments are tied to actual claims activity, self-insured organizations must closely track their loss data to ensure accurate reporting and timely submission of each premium assessment. This approach not only improves transparency but also helps employers understand how their claims experience directly influences the size of their premium assessment each year. Overall, this structure reinforces accountability within the workers’ compensation system and ensures that every employer—regardless of coverage type—contributes proportionately to the oversight, enforcement, and safety programs that keep California’s work environment functioning smoothly.
Why These Adjustments Matter
Understanding the assessment changes is critical for employers managing budgets and forecasting insurance costs. Higher or lower assessments can influence premium calculations, payroll planning, and risk management strategies. Staying informed helps ensure compliance and proper funding of safety and anti-fraud programs that protect workers.
Beyond budgeting concerns, these adjustments also shape how employers plan for long-term operational stability. Even slight changes to a premium assessment can affect year-over-year financial projections, especially for employers with large payrolls or fluctuating claim histories. By understanding the impact of these shifts early, employers can better anticipate cash-flow needs, prepare for renewal negotiations, and strengthen their overall workers’ compensation strategy. Staying proactive not only supports compliance but also helps organizations maintain a safer workplace and avoid unexpected financial strain tied to systemwide funding requirements.
For full details on the 2026 premium assessments, click here: Workers’ Comp Executive — Here Are the Premium Assessments.
Stay informed and subscribe to SIBTF.org for real-time updates on workers’ compensation reforms, assessment changes, and compliance guidance.
Read More from SIBTF.org:
- Bureau Weighs Consolidation of Classifications to Streamline Workers’ Compensation
- How New Labor Contractor Identifiers Are Reshaping Compliance and Oversight
- New Labor Contractor Classifications: What Workers Need to Know
FAQs: California Workers’ Compensation Premium Assessments
What is the 2026 premium assessment rate for insured employers?
Insured employers in California will pay a 5.2% premium assessment on top of their regular workers’ compensation insurance premiums in 2026. This rate represents a slight increase from the 5% assessment levied in 2025 and is calculated based on the total premium paid by each employer. The additional funds collected through this premium assessment are used to support critical components of the state’s workers’ compensation system, including Cal/OSHA programs, labor law enforcement, and anti-fraud initiatives. Employers should factor this adjustment into their budgeting and forecasting, as even small percentage changes can impact overall insurance costs and payroll planning for the year.
How are self-insured employers affected by the new assessment rates?
Self-insured employers will pay a 7.8% assessment, calculated on indemnity benefits paid to injured workers, which is slightly lower than last year’s 8.5%.
Why did the DIR adjust the premium assessment rates?
The rates fund critical components of California’s workers’ compensation system, including labor enforcement, Cal/OSHA, and anti-fraud initiatives.
When and how do employers pay these assessments?
Insured employers’ carriers pay assessments upfront and recover them through premiums, while self-insured employers pay directly to the DIR over the year.