If your California LLC has any employees, yes, it must carry workers compensation insurance from the first hire, because California requires coverage from employee number one under Labor Code section 3700. If it is just you as a managing member with no employees, the LLC generally is not required to carry a policy, but California treats a managing member as a covered employee by default, so leaving yourself off takes a signed waiver. The number of members does not change the rule; your employees do.
Who this is for: Owners of a California LLC, whether a single-member LLC with no staff, a multi-member LLC, or an LLC running a payroll of W-2 employees.
The short version
- An LLC with even one employee must carry workers comp in California; there is no headcount threshold.
- A managing member is a covered employee by default, and can be left off only by signing a written waiver, under penalty of perjury, that goes to the insurer.
- A single-member LLC with no employees usually has no one the state requires it to cover.
- Your W-2 employees are always covered; the include-or-exclude choice applies only to managing members.
- Clients and general contractors routinely require proof of coverage before your LLC can start work.
How California treats LLC managing members
Since California's 2017-2018 changes (AB 2883 and SB 189), a managing member of an LLC is included as a covered employee by default when they work for the business. That is the reverse of what many owners expect. To be left off, a managing member must sign a written waiver, under penalty of perjury, stating that they are a qualifying managing member, and deliver it to the insurer. There is no minimum ownership percentage for a managing member to waive out, and the membership interest can be held in a revocable trust. So the practical question is not whether the law names LLC members, it is whether you sign the waiver or stay on the policy.
What applies to your LLC
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, no employees | No | You are covered by default if you take a policy; sign a waiver to opt out |
| Multi-member, no W-2 employees | No | Managing members are in by default; each can waive out in writing |
| Any LLC with W-2 employees | Yes | Employees must be covered from day one; owners may waive themselves off |
| LLC that holds a roofing license (C-39) | Yes | A licensed roofer must carry comp even with no employees |
The waiver, not an automatic exclusion
Because managing members start out covered, doing nothing leaves you on the policy and adds your wages to the premium. If you would rather keep your own pay out of the cost, you file the waiver and rely on other coverage for your own injuries. Many owner-run LLCs waive the members and keep only the employees on the policy, which lowers the premium while still protecting the business from an employee-injury lawsuit. The limited liability in LLC shields your personal assets from many business debts, but it does not by itself answer an injured employee, which is exactly what comp is built to handle.
A San Jose example
Illustrative, not a quote. A two-member electrical contracting LLC in San Jose runs the business with one W-2 apprentice. The members do not want to pay premium on their own wages, so each signs a waiver to leave themselves off, and they cover only the apprentice. When a builder they want to work for requires proof of coverage, the LLC already has a policy and can produce a certificate the same day. If the apprentice is hurt pulling wire, the injury is covered and the LLC keeps its exclusive-remedy protection instead of facing a negligence claim. We make sure the electrical work is rated correctly so the price is fair.
Real questions California owners ask
Does my California LLC have to carry workers comp?
If it has any employees, yes, from the first hire. If it is only managing members with no employees, coverage generally is not required, though managing members are covered by default unless they sign a waiver.
Am I covered as a managing member?
By default, yes. California treats you as a covered employee when you work for the business. You can be left off only by signing a written waiver, under penalty of perjury, that goes to the insurer.
Do I need comp for a single-member LLC with no employees?
Usually not, because there is no one the state requires you to cover. If you take a policy anyway, you are included by default and can sign a waiver to leave your own injuries off it.
Does having W-2 employees change things for my LLC?
Yes. Even one W-2 employee makes coverage mandatory from day one. The policy covers your employees and gives the LLC exclusive-remedy protection, so an injured worker generally cannot sue the business.
How do I exclude myself as a managing member?
You sign a written waiver, under penalty of perjury, stating you are a qualifying managing member, and deliver it to your insurer. There is no minimum ownership percentage required for a managing member to waive out.
Does the limited liability of an LLC protect me from an injured worker?
Not on its own. The LLC structure shields your personal assets from many business debts, but an injured employee is a separate exposure. Without workers comp, the business itself can still be sued.
Why do clients ask my LLC for proof of coverage?
General contractors, landlords, and commercial customers require a certificate to manage their own risk. Even when you have covered everyone required, you usually cannot start the job without showing proof.
Why California owners choose Morrow
- We shop the right market for you. In California you buy workers' comp on the open market from any licensed private carrier, with the State Compensation Insurance Fund competing alongside them and standing as the insurer of last resort, so we can shop your rate freely and still have a guaranteed fallback for hard-to-place accounts.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related California guides
Every California business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in California (start here)
- Workers comp: the owner's overview
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- What workers comp does not cover
- California electrician workers comp
This guide is general information, not legal advice. California rules and penalty amounts can change, so verify current requirements with California Division of Workers' Compensation (DWC), a division of the Department of Industrial Relations (DIR) or a licensed advisor before you rely on them. Last updated: July 2026.