The Department of Industrial Relations has released its assessments for 2025. The charges are added to employer’s workers’ comp policies, and self-insureds are assessed differently.
DIR says the total cost to run the affected operations will cost California employers over $2 billion. The total assessment is over 21% from the $1.7 billion the department said it needed last year. Insured employers will see just over 5% of premium added to their workers’ comp bill for 2025.
Interestingly, while the total assessment is up sharply, the amount DIR needs to collect is down for both insured and self-insured employers. Due to leftover monies in the various accounts, employers will spend about 1% less in the new year. This year, the assessment was just over 6% of the premium, but it will only assess 5%.
The assessments effectively tax employers to cover “the costs of the administration of the workers’ compensation, health and safety, and labor standards enforcement programs.” Funds are also collected to pay for the anti-fraud efforts at the California Department of Insurance and the county district attorneys.
Self-insured employers and legally uninsured employers are assessed based on a percentage of the total workers’ comp indemnity payments they made to injured workers. Next year, self-insureds will receive a decrease—8.5% compared to 11.1% under the 2024 assessment.
Insured employers are also again spared from the once traditional 2% assessment that the California Insurance Guarantee Association used to collect each year. CIGA managed itself through most of the carrier failures and now has enough reserves to fund its remaining workers’ comp liabilities.
The assessments are divided between insured and self-insured employers based on their relative share of the statewide payroll. Next year, the split is 73.42% for the insured market and 26.58% for self-insured employers.
The specific charges by fund for both insured and self-insured employers, along with additional details, are included in the next paid premium edition of Workers’ Comp Executive.