Many of us in the “Safety Community” are not aware that our employers are being assessed (taxed if you will) annually by the DIR. Check this out…
Why are employers assessed?
Labor Code Sections 62.5 and 62.6 authorize the Department of Industrial Relations to assess employers for the costs of the administration of the workers’ compensation program. In recent years, the Legislature has added additional assessments, including two new assessments to fund Cal/OSHA and the state Labor Commissioner’s office. The six assessment accounts include:
Workers’ Compensation Administration Revolving Fund (WCARF)
Uninsured Employers Benefits Trust Fund (UEBTF)
Subsequent Injuries Benefits Trust Fund (SIBTF)
Occupational Safety and Health Fund (OSHF)
Labor Enforcement and Compliance Fund (LECF)
Workers’ Compensation Fraud Account (WCFRAD)
The employer assessments are supposed to allow for the speedier resolution of workers; compensation claims, to assure safe and healthy working conditions on the job to prevent injuries from occurring, to help ensure the enforcement of minimum labor standards and the statutes covering workers’ compensation insurance coverage, and to improve the overall operation of the system. Current law allocates the six assessments between insured and self-insured employers in proportion to payroll for the most recent year available. In general, private-sector insured employers pay approximately 70% of the assessment. Self-insured employers–which include most public entities–pay most of the remaining 30% of the assessment.
The Department of Industrial Relations (DIR) released final numbers on 2011 Employer Assessments on Monday. Overall, the total assessment will decrease by .43 percent – or $1.7 million from the 2010 assessment levels. The $1.7 million reduction is attributed in large part to the state-imposed state worker furloughs.
| Year | Total of all Six Assessments |
| 2010 | $406.6 million |
| 2011 | $404.9 million |
| $1.7 million reduction |
Even though the overall assessment for 2011 is lower, private sector insured employers will pay more in 2011. Assessments for these employers will increase due to the harsh economy that has forced private-sector businesses to cut payroll or close down completely. The insured employer assessment, as a result, has to be paid by a smaller number of employers, thus driving individual insured assessments upward to fund these state government programs.
Self-insured employers should not see an increase in their assessments, other than those with significantly higher indemnity payments in the prior year. Attached is the packet released by DIR on the assessments and assessment formulas for insured and self insured employers for more information on the assessment formulas. CLICK HERE for the documents.
Individual letters are sent on November 29 to all insured, self-insured and legally uninsured employers throughout California notifying them of their assessment obligations. The assessments must be paid before the end of December 2010.
