Does a business with one employee need workers' compensation?

There is no small-employer exemption. The obligation attaches at the first employee, and California is unusual in backing it with criminal exposure rather than only a civil penalty.

The statute is short and absolute — every employer except the state shall secure the payment of compensation. That is normally done by buying a policy, though a qualifying employer may self-insure with the state's consent. There is no headcount below which it does not apply.

The penalties are where this stops looking like ordinary compliance. Failure to secure coverage is a misdemeanour. A first conviction carries imprisonment in the county jail for up to one year, or a fine of not less than twice the amount of premium that would otherwise have been due — and not less than $10,000 — or both. A second conviction raises the multiplier to three times the premium with a $50,000 floor.

Separately, an employer who is uninsured when someone is hurt loses the exclusive-remedy protection that workers' compensation normally provides. The injured worker can sue in civil court, and the state can issue a stop order halting the use of employee labour until coverage is in place.

This connects directly to the day-one notice rule: the § 2810.5 notice has to name the workers' compensation carrier. An employer who cannot fill in that line on the form is being told, by their own paperwork, that something is missing.