California Workers’ Comp Rates Are Rising – Here’s What Employers Need to Know

For the first time in over a decade, the California Department of Insurance has approved an increase to the state’s average advisory pure premium rate—up 8.7% to $1.52 per $100 of payroll.

This decision reflects growing concerns about the long-term sustainability of the system. Independent actuarial analysis confirmed several key cost drivers, including:

• Higher medical and medical-legal treatment costs
• Increased expenses related to adjusting claims
• A rise in cumulative trauma claims
• A projected combined ratio of 123% in 2024—the highest in nearly 15 years

While pure premium rates are advisory and may not affect all employers the same way, the shift signals a notable change in the broader workers’ compensation landscape.

The Department’s update serves as an early indicator of rising claims costs, and may prompt future legislative or regulatory review to maintain balance between protecting injured workers and managing systemwide expenses.