Workers’ Comp Rates to Rise in January 2021

Premium increase and COVID-19 surcharge may result in big rate hikes

September 21, 2020California

California employers will see their workers’ compensation premiums increased, perhaps significantly, for the first time in many years beginning January 2021.

Reversing a previous decision to lower rates, the Workers’ Compensation Insurance Rating Bureau (WCIRB) is now recommending an average increase of $1.56 per $100 of payroll, or an average 2.6 percent increase, from the approved January 1, 2020 advisory pure premium rates. To see the WCIRB’s full amended rate filing, click here.

Additionally, a COVID-19 surcharge will be applied on top of the premium rate increase for all employers based on a sliding scale. Employers in health care, social services and other industries with the greatest COVID-19 exposure to their workforce will be subject to the highest surcharge. The surchanges in the WCIRB’s amended filing range from $0.01 per $100 of payroll to $0.24 per $100 of payroll. There are also now six industry groupings, instead of four.


Combined, these actions will amount to the largest rate hikes in workers’ comp rates in years. They also follow a series of regulatory and legislative actions that culminated in the recent passage of California’s SB 1159, a bill that significantly expands Governor Gavin Newsom’s May 6 Executive Order regarding COVID-19 and workers’ compensation.

The new law has significant implications for California business regarding workers’ comp. To see a more detailed analysis from MMA, click here.

Time to Act is Now
With new rates set to take effect in three months, employers should work closely with an experienced insurance broker to review their workers’ compensation coverage and evaluate all carriers and options. Marsh & McLennan Agency works with employers to develop workers’ compensation strategies and can help you create an action plan. The MMA team is ready to help your organization move quickly in anticipation of the new rate environment. For more information, contact your MMA representative. www.MarshMMA.com