September 26, 2025 | SIBTF.org — California employers may face higher workers’ compensation SIBTF employer assessments in 2026 as the Subsequent Injuries Benefits Trust Fund (SIBTF) continues to shoulder escalating liabilities. Despite legislative efforts like AB 1329 to reform the program, the fund’s growing financial obligations point to another year of increased assessments for both insured and self-insured employers.
Analysts point to several drivers behind the looming increase. A steady rise in complex injury claims, higher lifetime benefit payouts, and ongoing delays in case resolution have all contributed to the SIBTF’s expanding obligations. At the same time, investment returns that help offset payments have lagged behind inflation, narrowing the fund’s financial cushion. These structural pressures mean that, even if lawmakers approve reforms like AB 1329, the underlying cost trajectory will continue to challenge California employers through 2026 and beyond.
Understanding the Assessment Methodology
The Department of Industrial Relations (DIR) calculates SIBTF employer assessments by reviewing the fund’s overall financial status and projected liabilities. For the 2024–2025 fiscal year, DIR projected a total SIBTF assessment of $848 million, with insured employers covering about 73.42 % (roughly $622.6 million) and self-insured employers responsible for 26.58 % (around $225.4 million).
This calculation reflects anticipated benefit payments, administrative costs, and the SIBTF’s unfunded obligations—key factors that will continue to shape the 2026 assessment.
Projected Impact on 2026 Assessments
The SIBTF’s liabilities already exceed $26 billion and are increasing by nearly $3 billion annually. Even if reforms such as AB 1329 pass, these rising obligations mean SIBTF employer assessments are likely to climb again in 2026. Employers should be prepared for adjustments to their workers’ compensation budgets to accommodate potential increases.
Preparing for Higher Costs
Businesses can mitigate surprises by closely monitoring DIR announcements and understanding how SIBTF employer assessments are derived. Staying informed helps employers forecast their workers’ compensation expenses and plan accordingly for the upcoming fiscal year.
In addition to tracking official DIR updates, employers can benefit from scenario planning and consultation with workers’ compensation specialists. Conducting mid-year budget reviews, evaluating alternative insurance options, and exploring workplace safety initiatives can help offset potential premium hikes. Proactive communication with industry associations and legal advisors also ensures companies remain aware of any late-breaking regulatory changes that could influence upcoming SIBTF employer assessments.
Conclusion
The combination of persistent liabilities and slow-moving reforms makes higher SIBTF employer assessments a strong possibility for 2026. Employers that track the DIR’s methodology and legislative updates will be better positioned to manage these evolving costs.
For detailed information on the DIR’s assessment methodology, visit the official DIR website.
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Read More from SIBTF.org:
- Governor Yet to Act on Key SIBTF Reform Bill AB 1329
- SIBTF Faces Financial Strain and Growing Backlog
- California Assembly Approves AB 1329: Stricter Eligibility for SIBTF Benefits
FAQs: About SIBTF Assessments
What is the Subsequent Injuries Benefits Trust Fund (SIBTF)?
The SIBTF is a California state fund that provides benefits to workers who suffer a subsequent industrial injury that, when combined with a pre-existing disability, results in a higher permanent disability rating.
How are SIBTF employer assessments calculated?
The DIR sets assessments based on the SIBTF’s financial needs, including projected liabilities and administrative expenses, and divides the cost between insured and self-insured employers.
Will AB 1329 reform the SIBTF?
AB 1329 is a proposed bill aimed at reforming the SIBTF by tightening eligibility criteria and improving fund administration. However, its passage and implementation may not immediately alleviate the fund’s financial pressures.
How can employers prepare for potential assessment increases?
Employers should monitor updates from the Department of Industrial Relations regarding assessment rates and plan their budgets accordingly to accommodate potential increases.
What is SIBTF?
The Subsequent Injuries Benefits Trust Fund (SIBTF) helps California workers who suffer a new workplace injury and already had a prior disability. It offers supplemental compensation when combined impairments severely limit earning capacity.