“Eman at Yazdchi Law was extremely professional, responsive, and supportive at all times. He and his staff exceeded all of my expectations.”
Andrea Dalessandro
✦ Certified Specialist in Workers’ Compensation Law — Certified by the State Bar of California, Board of Legal Specialization ✦
Serving injured workers across California. Board-certified specialist; no fee unless we win.
By Eman Yazdchi, Esq. · Certified Specialist in Workers' Compensation Law, State Bar of California Board of Legal Specialization
In California, Labor Code §3700 requires every employer to secure workers' compensation insurance through an admitted carrier or qualify as a self-insured employer with the Department of Industrial Relations. Failure to comply opens the employer to §3700.5 misdemeanor exposure and §3706 civil tort liability. Yazdchi Law handles California §3700 disputes statewide.
California Labor Code §3700 requires every California employer to secure the payment of workers' compensation benefits through one of two routes: insurance against liability by an insurer admitted to transact comp business in California, or by securing a Certificate of Consent to Self-Insure from the Director of Industrial Relations. The §3700 California rule is the statutory foundation of the entire workers' compensation coverage system — without §3700 compliance, the no-fault bargain under California Labor Code §3600 cannot function.
Under California Labor Code §3700, virtually every California employer with at least one employee — regardless of full-time, part-time, or temporary status — must secure comp coverage. The §3700 mandate reaches construction, agriculture, retail, restaurant, manufacturing, healthcare, professional services. Worker classification under California Labor Code §2775 (the ABC test) determines who counts as an employee; once classified, California Labor Code §3351 confirms coverage regardless of immigration status, and §3700 requires the employer to insure.
Under California Labor Code §3700, a California employer satisfies the comp insurance mandate by one of two routes. Route one is purchasing a comp policy from an insurer admitted to transact comp business in California. Route two is qualifying as a self-insured employer through the Department of Industrial Relations Office of Self-Insurance Plans, which requires posting security, financial-strength demonstration, and ongoing reporting. The §3700 California requirement is non-delegable.
When a California employer violates California Labor Code §3700, three layers of consequence apply at once. Under California Labor Code §3700.5, the failure is a misdemeanor punishable by county jail and fines plus civil penalties of $10,000 per employee on the date of the offense. Under California Labor Code §3706, the injured worker may sue the employer in civil court outside the California Labor Code §3601 exclusive-remedy bar. The Uninsured Employers Benefits Trust Fund also pays the worker's benefits and seeks reimbursement from the uninsured employer.
Under California Labor Code §3700 and the UEBTF framework, when a California employer fails to carry comp insurance and a worker is injured, the Uninsured Employers Benefits Trust Fund administered by the Division of Workers' Compensation pays the worker's benefits — California Labor Code §4600 medical, California Labor Code §4653 TD, California Labor Code §4660 PD — and then pursues reimbursement from the uninsured employer. The §3700 violation does not leave the California worker uncompensated; it shifts the financial burden onto the uninsured employer.
Injured at work? Call (661) 273-1780
Tap to call →Last reviewed by Eman Yazdchi, Esq., May 2026.
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