Your employer had no workers’ comp insurance? The state fund, the lawsuit, and the order that matters

First, find out whether there was a policy

The date of injury decides it, not today.

Do not take anyone’s word for it. Not the owner’s, not a manager’s, and not a denial letter’s. “We don’t have insurance” sometimes means “we don’t want a claim.” Check it yourself.

Two tools, both public.

• The coverage database. The Workers’ Compensation Insurance Rating Bureau of California keeps a free public search at caworkcompcoverage.com, by employer name. Start there.
• A Coverage Research Service Request. Where the search is inconclusive, which it often is for small businesses, renamed businesses and dissolved ones, ask the Rating Bureau directly. The Division’s guide says the Bureau waives its usual fee for injured workers.

The question is the date of injury. A policy bought next month does not cover an injury from last month, and a policy that lapsed after the injury still covers it. Ask for coverage on the day you were hurt.

In a cumulative traumaCT — Cumulative trauma Injury from repeated exposure over time. The largest injury category in California and the least claimed. claim, the date is different. Where the injury built up over time, the date of injury is when you first suffered disability and knew, or should have known, that work caused it, or the last day you were exposed at work, if that came first. Coverage during the year before that date decides which policies apply, and there may be more than one.

Keep the answer. The written result from the Rating Bureau showing that there was no coverage on the date of injury is the document the whole uninsured-employer process is built on. Get it before anything else, and keep a copy.

How do I find out if they have insurance? Years of work, one injury: cumulative trauma claims

If there was a policy after all

A closed business is not an uninsured one.

The insurer handles the claim. If the search finds a policy for the date of injury, the claim goes to that insurer exactly as any other claim would. It does not matter that the employer has stopped operating, dissolved or gone into bankruptcy. A workers’ compensation policy covers the injury, not the employer’s continued existence, and the employer’s bankruptcy does not discharge the insurer’s obligation.

If the insurer failed. Where the insurance company itself became insolvent, the California Insurance Guarantee Association exists to pay the covered workers’ compensation claims of insolvent insurers. That is a different path again, but it is a path.

My employer closed or went bankrupt

No policy: two routes

A fund that pays benefits, and a lawsuit that can reach more.

Route one, the state fund. The Uninsured Employers Benefits Trust Fund, usually called UEBTF, pays the claims of workers injured while working for an illegally uninsured employer. It is run by the state, not by an insurance company, and it pays the benefits a workers’ compensation claim would have paid.

Route two, a lawsuit. Where an employer failed to secure the payment of compensation, the law lets the injured worker bring an action at law for damages against it, as though the workers’ compensation system did not apply. In an ordinary work injury, the employer cannot be sued; the comp claim is the only remedy. An employer that broke the law by not carrying insurance loses that protection.

Why the second route matters. Workers’ compensation does not pay for pain and suffering. A civil lawsuit can. In the right case, that is a great deal more than the comp benefits, and it is the route people are least often told about.

Why the two usually go together. An employer that did not buy workers’ compensation insurance often has little else: no assets worth the name and no other insurance. The fund pays benefits that will actually be paid. The lawsuit reaches what is there, if anything is. Pursued together, neither depends on guessing which one will work.

What the state fund pays

The benefits of a claim, from a fund that is not an insurer.

The same benefits. The fund pays medical treatment, temporary disability, permanent disability, the supplemental job displacement benefit and death benefits to workers injured by illegally uninsured employers. For the worker, the benefits are the ones the rest of this site describes; what is different is who pays them, and what has to happen first.

Not automatic. The Division’s own guide puts it plainly: the benefits will not be paid automatically. The fund is not your employer’s insurer and does not act like one. It does not adjust a claim the day it hears of it. It waits for a claim that has been properly built, and the employer properly brought into it.

It can pay before an award. Once the request reaches it with the papers it needs, the guide says the fund can decide to pay benefits before a workers’ compensation judgeWCJ Workers’ Compensation Judge. Decides your case. There is no jury. issues an award. That is the practical reason to get the steps right early rather than late.

It goes after the employer. The fund pays the worker and then tries to recover what it paid from the uninsured employer, which is one reason it insists that the employer be named and served correctly.

The ordinary deadline still applies. The claim is still a workers’ compensation claim, and the one-year limit to file applies: generally one year from the date of injury or, if later, from the last medical treatment provided or the last day a disability payment covered. The guide tells a worker who is close to a year with no claim filed to contact a Division information and assistance office immediately.

Workers’ comp claim denied? From the letter to the judge Your deadlines

The steps, in order

Where these claims are won or lost.

The Division’s guide lists eleven steps, and says to follow them in order and skip nothing. The guide is written for a worker doing it alone, and it is worth reading whole. In outline, it comes to this.

1. The claim form. Fill in the employee’s part of the DWC-1DWC-1 The claim form. Filing it starts the 90-day presumption and the $10,000 treatment obligation. claim form, sign and date it, and keep a copy. Give it to the employer by hand or by certified mail, return receipt requested, and keep the proof of delivery.
2. Verify that there was no coverage. The database search and, where needed, the Coverage Research Service Request. Keep the Rating Bureau’s response.
3. Gather the evidence while you wait. Medical reports and bills, proof that you worked there, and a list of witnesses.
4. File the Application for AdjudicationApplication for Adjudication Opens your case at the Appeals Board. One year. of Claim at the local Appeals Board office, with the declaration the law requires and a proof of service by mail, and mail a copy to the employer.
5. Prepare the rest of the packet. A Declaration of Readiness to ProceedDOR Declaration of Readiness to Proceed. Forces the calendar. You have 10 calendar days to object, or objections to proceeding on its issues are waived., the Special Notice of Lawsuit, and a Petition to Join Party Defendant, the request that brings the fund into the case.
6. Assemble it. The guide sets the order of the pages, from the Application on top to the petition and its verification at the back.
7. Make three copies, with an extra copy for each partner if the employer is a partnership.
8. Serve the employer in person. Not by mail. The guide names the local sheriff’s office or a process-serving company, and notes that the proof of personal service is a different document from the proof of service by mail.
9. File the served packet at the nearest Appeals Board district office.
10. Ask the fund for benefits. Send a letter, with one copy of the packet, to the nearest UEBTF office.
11. Keep one original packet, and watch for a notice of a conference from the Appeals Board.

Then the fund is joined. The Petition to Join Party Defendant is decided by the Appeals Board, on a showing of good cause. The fund’s liability generally attaches only after the employer has been properly served and joined, which is why each step before it carries so much weight.

No insurance is not no claim. It is a claim with more steps, and each one has to be taken in order.

Serving the employer

Not a formality. The point the whole claim turns on.

Why it matters so much. The fund can only pay your benefits if your employer is correctly named and served. The Division’s fact sheet on the fund says so in those terms. A claim against the wrong name, or against the right name served the wrong way, does not bring the fund in, however strong the injury.

The right name. The employer is the legal name of the business, not the name on the sign or the name of the manager who hired you. A restaurant may be owned by a corporation with an unrelated name; a contractor may be a sole owner trading under a business name. The Secretary of State’s records, the business license, a pay stub and a check stub can each show who the employer really is.

The right person to serve.

• A corporation or a limited liability company. Its agent for service of process must be served. Where three attempts fail, a petition for service on the Secretary of State is the route.
• A partnership. A partner must be served, and the guide calls for a copy of the packet for each partner.
• A sole proprietorship. The owner must be served.

The right way. Formal service, in a way the law allows for a summons, by a process server or the sheriff, with a proof of service. Handing papers to whoever is behind the counter, or mailing them, is not it.

A dissolved company is the hard case. Records disappear, agents resign and officers scatter, and it gets harder to serve every month. Do not let this be attempted informally.

What the employer is told. The Special Notice of Lawsuit is the formal warning to the employer that a claim has been filed against it, and what follows. The form itself tells the employer that a lien may be imposed on its property without further hearing.

The lawsuit against the employer

Immunity lost, and negligence presumed.

The ordinary rule, and the exception. In an ordinary work injury the employer is immune from a lawsuit, and the worker receives the statutory benefit, which is capped and pays nothing for pain and suffering. Where the employer failed to secure workers’ compensation, the law permits an action at law for damages instead.

What the law adds. In that lawsuit, the law gives the injured worker an unusually strong position:

• Negligence is presumed. The employer carries the burden of rebutting it, not the worker the burden of proving it.
• No contributory negligence. The employer may not argue that you were careless.
• No assumption of the risk. The employer may not argue that you knew the job was dangerous and took it anyway.
• No fellow-servant rule. The employer may not blame a coworker to escape responsibility.

Weigh it every time. It should be evaluated in every uninsured employer case, even where the answer is that the lawsuit is not worth bringing. Bringing it does not mean giving up the fund.

Whether there is anything to collect

The question that decides how hard to press the lawsuit.

A judgment is only paper. An employer that did not buy workers’ compensation insurance frequently has no assets and no other insurance. A large judgment against an empty business pays nothing. That is not a reason to skip the question; it is the question.

Where money can be found.

• Assets. Property, equipment, accounts, a business that is still operating.
• A general liability policy that may respond.
• A solvent parent or a successor that took over the business.
• A personally liable owner, where the business was the owner by another name.

Look past the employer entirely. A property owner, a general contractor, an equipment manufacturer, a driver: the ordinary third parties are unaffected by your employer’s insurance status. A claim against one of them is a separate lawsuit, and it pays for pain and suffering too.

In construction, the hiring contractor. Someone doing work that requires a contractor’s license, without holding the license, cannot be an independent contractor in California. Their crew is frequently deemed the employees of the licensed contractor or the property owner who hired them. That is often a solvent party standing behind an insolvent one.

In a staffing arrangement, the client. Where a labor contractor supplied you to do a client company’s regular, customary work at its worksite and failed to secure coverage, the law makes the client share the liability.

• Someone else caused it: third-party claims
• Hurt driving for work: two claims, one crash
• Construction workers
• My employer is a staffing agency

Paid in cash, or called a contractor

The label is not the law.

You are presumed to be an employee. The law presumes that anyone rendering service for another is an employee, and the presumption does not ask how you were paid. A 1099 does not decide it. A signed paper calling you a contractor does not decide it. Whoever hired you has to prove you were not an employee, not the other way around.

Cash changes the proof, not the claim. An employer that paid off the books almost certainly did not carry insurance either, which is why so many uninsured employer cases are also cash cases. The employment relationship then has to be proved with other evidence: texts and schedules, photographs of you at work with dates, uniforms, coworkers, deposit records. It regularly is. Where the employer kept no records at all, establishing the employment is the first fight.

What you earned, without a pay stub. The law lets earnings be set by what most reasonably represents your earning capacity, considering all the circumstances, not only documents. Your own testimony, bank deposits, a coworker’s word about the rate, texts about pay or hours and the going rate for the work all count. An employer is required to keep payroll records for every employee; where it kept none, that failure is the employer’s, not evidence that you did not work there.

The contractor label. For most work the law applies a three-part test, and the hiring business has to prove all three parts to call you a contractor; the work being outside the usual course of its business is where most such labels fail. In construction, the unlicensed-contractor rule above often settles it outright, with two limits: no license is required for a small job, one where the whole project is under $1,000 in labor, materials and everything else and needs no building permit; and a person hired by a homeowner to work on the home is outside the workers’ compensation definition of employee if the work was, or was contracted to be, for less than 52 hours, or for wages of $100 or less, in the 90 days before the injury.

File the claim anyway. Whether you were an employee is decided by a workers’ compensation judge, not by the person denying it. The claim form does not need the employer to agree.

I was paid in cash They say I’m an independent contractor

If you are undocumented

Covered, by the fund too.

Immigration status is irrelevant to the claim. California workers’ compensation covers workers regardless of immigration status, and so does the Uninsured Employers Benefits Trust Fund. The law defines “employee” without reference to it.

Threats are retaliation. It is unlawful for an employer to fire, threaten or discriminate against a worker because the worker filed or intends to file a claim. An immigration threat made over a workers’ compensation claim is retaliation. Write down the date, the words and who said them.

A claim is not an immigration proceeding. A claim can be filed for a worker without a Social Security number. Do not use someone else’s number, and do not invent one. Immigration law itself is not this firm’s practice; if you have an immigration question, ask an immigration lawyer.

I’m undocumented My employer is retaliating against me

What happens to the employer

Leverage, not payment.

It is a crime. Every California employer is required to carry workers’ compensation insurance, or to be approved to self-insure, and failing to do so is a crime. The Division’s fact sheet lists steep fines, the business being shut down and criminal charges.

The state can close the business. The Division’s guide says the Labor Commissioner’s Bureau of Field Enforcement can fine illegally uninsured employers and, in some cases, shut them down. A worker can report an uninsured employer to the Labor Commissioner.

None of that pays you. A fine goes to the state, not to the worker, and a shuttered business is harder to collect from, not easier. But it is leverage, and it explains why an uninsured employer who has been properly served sometimes finds a policy, or a settlement, it said it did not have.

When you do not need a lawyer for this

Some steps are yours to take this week.

The first steps need no one. You do not need a lawyer to search the coverage database, to give your employer the claim form by certified mail, to ask the Rating Bureau for a coverage search, or to start a folder of proof that you worked there. Do those now, whatever you decide later.

The Division helps workers without lawyers. Its information and assistance officers work with injured workers who are not represented, and the eleven-step guide is written so that a worker can follow it alone.

Some answers will not change. If the search shows that there was a policy on the date of injury, this is an ordinary claim against that insurer, and the uninsured-employer route does not apply. If the employer has nothing and no one else is responsible, a lawsuit will not collect, whatever it is worth on paper. A lawyer cannot make money appear in an empty business, and an honest one will say so.

When a consultation is worth having. When the employer is a corporation or LLC, or has dissolved, and has to be served; when the employer’s legal name is unclear; when a general contractor, a property owner, a staffing client or a driver may also be responsible; when there may be something to collect in a lawsuit; when you were paid in cash or called a contractor and the employment is disputed; or when a year from the injury is approaching. Most failures in these cases are procedural: coverage never verified, the employer never properly served, the fund never joined, the lawsuit never evaluated. A consultation with this office costs nothing, and if there is nothing worth doing, we will tell you that.

When you don’t need a lawyer, and what changes the answer When your employer has no insurance: the full route

A file to keep for an uninsured employer claim:

• The claim form — Your copy of the DWC-1, and the certified mail receipt or proof of hand delivery.
• The coverage answer — A printout of the database search and the Rating Bureau’s written response, for the date of injury.
• The employer’s legal name — And, for a corporation or LLC, its agent for service of process.
• Proof you worked there — Pay stubs, W-2s or 1099s, texts, schedules, dated photographs, a uniform, deposit records.
• Witnesses — Names and phone numbers of coworkers who saw the work or the injury.
• Medical records and bills — Every report, bill and receipt since the injury.
• Proofs of service — The proof of service by mail and the separate proof of personal service.
• Who else was there — The general contractor, the property owner, a staffing company, a driver, an equipment maker.