Key Dates that Will Define California’s Workers’ Compensation 2025 Rates
Author, Kevin Howard, Partner, Rancho Mesa Insurance Services, Inc.
In California, September 2025 will be a pivotal month for the state’s workers’ compensation marketplace. With inflated post-Covid-19 payrolls still affecting premiums, both the Workers’ Compensation Insurance Rating Bureau (WCIRB) and California’s Insurance Commissioner Ricardo Lara have been working to establish appropriate pure premium rates that are reasonable for both insurance carriers and employers.
Many California worker’s compensation carriers have shared that their combined ratios continue to rise. This means the cost of claims and expenses are increasing disproportionately to the collected premiums. And, at some point, a middle ground needs to be met based on the data analytics to ensure the carriers can continue to operate in the state.
Over the last few years, the WCIRB has provided Lara with recommendations to increase pure premium rates which should help to lower the carriers’ combined ratios, though the approved rates have trended lower than the recommendations. Now that the data shows carriers’ combined ratios are too high to sustain long-term, all eyes are on Lara over the next 5 months to see how this will unfold.
Pure premium rates are the WCIRB’s advisory rates, which change annually for each California class code. Pure premium rates do not include factors like commissions, carrier overhead expenses, or profit margins that are later added to the equation. The pure premium rates can be viewed as the starting point for independent carrier actuaries when they are deciding on annual increases or decreases based on the WCIRB’s posted pure premium rates.
A deep dive into the timeline of events that will shape the future of pure premium rates, dual wage thresholds, and carriers’ base rates per class code is important in order to understand the current workers’ compensation changes to come.
January
Up until 2023, January 1 was the official date when carriers would file new base rates with the California Department of Insurance (CDI). However, moving the carrier rate filings away from the beginning of the calendar year helps carriers avoid the year-end crunch, analyze data more efficiently (including the prior Q4), and better synchronize their timelines with the WCIRB and CDI recommendations.
April
Around mid to late April, the WCIRB will make a recommendation for pure premium rates that would go into effect on September 1. This recommendation is based on actual data that has been analyzed by actuaries. This analysis offers tangible insights that the insurance commissioner, the Department of Insurance’s chief actuary, and independent carriers can use to make informed decisions.
May–June
At the San Francisco headquarters, the CDI hosts public hearings where stakeholders, unions, and insurers can comment on the WCIRB’s proposed changes that include, but are not limited to, pure premium rate recommendations.
July
Dual wage recommendations are issued by the WCIRB in July. Based on data collected since the prior 4th quarter, the WCIRB will make a split class code recommendation that takes into account wage inflation and economic shifts throughout each industry that utilizes dual wage thresholds.
September
Advisory rates approved by the insurance commissioner go into effect in September. For example, in the current year of 2025, the WCIRB has recommended a 11.2% increase in pure premium rates. The Insurance Commissioner and the chief actuary will make the advisory pure premium rates official, which could be the same, less, or more than the WCIRB’s recommendation.
In September, carriers also lock in their base rates according to their own predictions, needs, and actuarial results.
October
The WCIRB prepares for the next year by gathering actuarial data.
California has some really important dates to pay attention to this summer and into the fall. The current WCIRB-recommended 11.2% increase is the largest recommended increase in the past 5 years. Communicating with your insurance broker and developing plans to prepare for this most certain increase will be critical to managing this line item on your profit and loss statement.
For questions about the pure premium rates and how they will affect your workers’ compensation premiums, contact me at khoward@ranchomesa.com or (619) 438-6874.