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by Vanessa M. Greene, J.D.; Employment Law Subject Matter Expert, CalChamber
Workplace injuries don’t just affect employees — they also test a company’s legal compliance, communication and culture. When workplace injuries are handled well, employers show employees that they care about their well-being. When handled poorly, employers open the door to legal and financial risk. Knowing what’s covered, how to respond and how to stay compliant can make all the difference when it comes to protecting both employees and the business.
In California, workers’ compensation coverage is mandatory for every employer with at least one employee. The law protects any employee who suffers work-related injuries or illnesses. Only a few categories of workers — like independent contractors and volunteers — fall outside the workers’ compensation system.
To determine whether an injury qualifies for workers’ compensation, two key questions must be answered:
“Arising out of employment” (AOE) means there must be some job-related risk or connection to the injury, while “in the course of employment” (COE) means the injury happened while the employee was performing work. Importantly, the job doesn’t need to be the only injury cause — just a contributing one. An injury meets the standard if:
In some situations, an employee may be disqualified from receiving workers’ compensation benefits even if the injury occurred at work. This can happen when the injury results from the employee’s own misconduct, such as being intoxicated, intentionally self-inflicting harm or starting a physical fight.
Benefits may also be denied if the injury occurred while the employee was committing a felony, engaging in horseplay or participating in a purely voluntary off-duty activity unrelated to their job. Additionally, injuries sustained during a commute generally aren’t covered unless the employer exercises control over the route, the activity or the mode of transportation.
If it’s uncertain whether an injury is covered, don’t guess — contact the employer’s workers’ compensation claims adjuster or legal counsel. Making assumptions can delay necessary medical treatment and expose a business to liability.
When an employee reports a work-related injury or illness, employers must act quickly and follow several required steps. The first priority is ensuring the employee receives immediate medical attention. Emergency care must be provided without delay, and the employee should be referred to a medical provider as appropriate.
Next, complete the Employer’s Report of Occupational Injury or Illness (DWC Form 5020) and submit it to the employer’s workers’ compensation insurance carrier, or to the Department of Industrial Relations (DIR) if self-insured.
If it’s clear that the injury will require more than first aid or will cause the employee to miss work beyond the day of the incident, employers must provide a Workers’ Compensation Claim Form (DWC 1) within one business day of learning about the injury. Internal company reports should also be completed as needed. If the employee is eligible for the California Family Rights Act (CFRA) or federal Family and Medical Leave Act (FMLA), designate the leave accordingly to ensure continued health benefit coverage, because workers’ compensation only covers the medical costs of the injury itself — it does not automatically provide a leave of absence.
If the incident results in a serious injury, illness or fatality, it must be reported to the California Division of Occupational Safety and Health (Cal/OSHA) as soon as possible by phone or email. Cal/OSHA recommends reporting by phone within 24 hours of the incident. Detailed instructions for both phone and email reporting are available on the DIR’s website.
Ongoing communication with the employee is critical. Regular check-ins help ensure timely medical treatment and benefit payments. Employers can follow up with the treating physician to obtain and review the Doctor’s First Report of Occupational Injury or Illness (Form 5021). This report provides useful details, including how the injury occurred and whether the employee can return to work with or without restrictions. If modified duty is possible, offering it may reduce benefit costs and lessen the impact on your future premiums.
Employers are also required to investigate the incident under their Injury and Illness Prevention Program (IIPP). This includes identifying the cause of the injury and taking any necessary steps to prevent it from happening again. Be sure to document the investigation. If the injury was caused by workplace violence, take care to comply with California’s workplace violence prevention documentation and recordkeeping requirements. Finally, complete any required Cal/OSHA records, such as the Injury and Illness Incident Report (Form 301), the Log of Work-Related Injuries and Illnesses (Form 300) and the Annual Summary (Form 300A).
Sometimes an employee may decline medical care or say they don’t want to file a claim. When that happens, document everything, including what occurred, when and where it happened, and who witnessed it. If treatment was offered and declined, ask the employee to sign a statement confirming they chose not to receive care. If they refuse to sign, document that as well.
Even when the employee is reluctant to file a claim, employers may still be required to report the incident to their workers’ compensation carrier. Each carrier may have its own requirements, so check with the carrier to make sure to comply with their expectations.
A claims adjuster is a key partner in managing the claim and supporting the employee’s return to work. As soon as the employee submits their completed DWC 1 form, reach out to the employer’s workers’ compensation carrier or third-party administrator. Don’t wait for the adjuster to contact the employer — initiate the conversation and keep them in the loop. They can help assess coverage, guide through tricky situations, and collaborate on return-to-work or light-duty plans.
One common misconception is that workers’ compensation provides job-protected leave. It does not — there is no such thing as “workers’ compensation leave.” While it offers wage replacement and medical care, job protection comes from other laws, such as FMLA, CFRA or disability accommodation laws.
Employers must assess whether any of these laws apply separately. If the employee qualifies, their time off should be tracked under FMLA or CFRA. Once that leave is exhausted, the employer’s obligation doesn’t necessarily end. Under state and federal disability laws, employers must engage in an interactive process to determine whether further leave — or a modified return-to-work plan — is a reasonable accommodation.
Employers also must engage in the interactive process when an employee needs leave but is not eligible under FMLA or CFRA. In that situation, the employer may need to provide leave as a reasonable accommodation.
California law strictly prohibits employers from taking adverse action against an employee for filing or intending to file a workers’ compensation claim, receiving a Workers’ Compensation Appeals Board (WCAB) award, or testifying on behalf of another injured employee. Retaliation or discrimination in these situations may violate Labor Code section 132(a), which carries serious consequences, including financial penalties up to $10,000, back pay, reinstatement and reimbursement for lost benefits.
These claims are common and often hinge on nuanced facts. Courts have found violations in cases involving everything from changes to an employee’s shift, to termination for excessive tardiness, to inconsistent use of sick time policies. Employers must be prepared to show that any adverse action was based on legitimate business necessity — in other words, truly required by operational needs.
A question that often arises is whether a company must provide indefinite leave to an injured employee. The answer is no. While employers are required to engage in a good-faith interactive process under the Fair Employment and Housing Act (FEHA) and may need to provide reasonable accommodations -— such as a medical leave of absence — they are not obligated to offer open-ended or indefinite leave with no projected return date.
However, employers must proceed with caution. Taking any adverse action — including termination — against an employee who is receiving workers’ compensation benefits can trigger claims under Labor Code section 132a. Accordingly, thorough documentation and consultation with legal counsel are recommended to minimize risk and ensure the action is based solely on legitimate business necessity — not perceived retaliation.
Employers can take proactive steps to help mitigate workers’ compensation liability:
Workers’ compensation in California is complex, but employers don’t have to navigate it alone. By acting quickly when injuries occur, working closely with claims adjusters, understanding leave obligations, and creating a safe work environment, employers can protect both their business and their employees.