Workers Compensation For Staffing Agencies In California

In California, any staffing agency with even one paid worker—full‑time, part‑time, seasonal, or temporary—is legally required to carry workers’ compensation insurance under Labor Code § 3700 Insurance Journal+8NPN Workers' Compensation+8Zurich North America+8. By law, temporary workers are considered employees of the staffing agency (“general employer”), making the agency responsible for providing coverage—even when staff are placed at client sites Law Office of Alice Strömbom+3Laguna Law Firm+3Cantrell Green Attorneys+3.

Temporary workers injured on assignment are entitled to the same statutory benefits as regular employees, including medical care, wage replacement, disability payments, retraining vouchers, and death benefits Laguna Law Firm. The staffing agency handles claim filing and benefits coordination, while the host client must provide a safe work environment and may face liability for negligence en.wikipedia.org+15Laguna Law Firm+15Law Office of Alice Strömbom+15.

Misclassification of independent contractors is especially problematic in California. The strict ABC test under Dynamex and AB‑5 presumes most staffing workers are employees unless all three criteria are met Law Office of Alice Strömbom+5en.wikipedia.org+5en.wikipedia.org+5.

Unlike many employers, staffing agencies in California are prohibited from self‑insuring, due to legislative rules under SB 863 Insurance Journal+1.

To manage costs, agencies should work with knowledgeable brokers to correctly classify roles, properly code payroll, and implement proactive risk‑management and safety programs tailored to client assignments