Does Workers’ Comp Pay for Lost Wages in California?
Your paycheck stopped the day you got hurt. But rent didn’t. Groceries didn’t. Your car payment definitely didn’t.
If you got injured on the job in California, workers’ compensation does pay for lost wages. But not all of them. The system replaces roughly two-thirds of your gross weekly pay, subject to state-set minimums and maximums that adjust every year. For 2026, the maximum temporary disability payment is $1,764.11 per week, and the minimum is $264.61. That means even if you earn $200,000 a year, you’re capped. And if you’re a lower-wage worker, you’re getting two-thirds of an already tight budget.
California’s workers’ comp system is no-fault, meaning it doesn’t matter who caused the accident. You got hurt at work, you qualify. But “qualifying” and “getting paid quickly” are two different things, and the gap between them is where most of the stress lives.
Key Takeaways
Priority
Workers’ comp replaces two-thirds of your gross weekly wages, not your full paycheck, up to a 2026 maximum of $1,764.11 per week.
There’s a three-day waiting period before benefits kick in, but if your disability lasts more than 14 days or you’re hospitalized overnight, you get paid retroactively from day one.
You cannot collect full workers’ comp temporary disability and state disability insurance at the same time for the same injury.
→ Double-dipping triggers clawbacks — coordinate benefits carefully
If a third party caused your workplace injury (like a negligent driver), you may be able to recover the remaining one-third wage gap through a personal injury claim.
Workers’ comp liens on personal injury settlements are governed by Labor Code § 3860 and are often negotiable.
→ Don’t accept lien amounts at face value — always negotiate
How Does California Calculate Your Workers’ Comp Wage Replacement?
The formula itself is simple. Take your gross weekly wages before the injury. Multiply by two-thirds. That’s your temporary disability benefit.
So if you were earning $1,200 a week, your TD payment would be about $800. Straightforward enough. But the state sets a ceiling and a floor. For injuries occurring in 2026, you can’t receive more than $1,764.11 per week or less than $264.61, regardless of your actual earnings. These numbers adjust annually based on the State Average Weekly Wage, which increased about 5% from 2025 to 2026.
“Gross wages” means your total pay before taxes and deductions. Overtime counts. Tips count. Bonuses that are part of your regular compensation count. A lot of people only think about their base hourly rate and shortchange themselves in their calculations.
When Does Workers’ Comp Start Paying?
Not immediately. And this catches people off guard.
California Labor Code § 4652 creates a three-day waiting period. You don’t get paid for the first three days you miss work after your injury. Think of it like a deductible, except instead of money, it’s time.
Two exceptions. If your disability continues for more than 14 days, the waiting period becomes retroactive, and you get paid for those first three days after all. Or if you’re admitted to a hospital as an inpatient (not just observed in the ER), you get paid from day one. Observation stays don’t count. Actual admission does.
Once your claim is accepted, TD payments come every two weeks. Your first check should arrive within about 14 days of your employer being notified of the injury. If it’s late, that’s a red flag. California penalizes claims administrators who drag their feet on payments.
Who Pays Your Medical Bills While You’re on Workers’ Comp?
This is where people get confused. Workers’ comp and health insurance play very different roles, and understanding which one covers what can save you from surprise bills.
Your employer’s workers’ comp insurance pays all medical costs related to your workplace injury. Doctor visits, surgery, physical therapy, prescriptions, and imaging. All of it. You should never receive a bill for treatment connected to your work injury. If you do, something went wrong in the process, and you should flag it immediately.
Your regular health insurance stays in place for everything unrelated to the workplace injury. Caught the flu while recovering from a broken wrist at work? Health insurance covers the flu. Workers’ comp covers the wrist.
California law doesn’t require your employer to keep paying your health insurance premiums while you’re out on workers’ comp leave. Your workers’ comp medical coverage handles the injury itself, but your regular benefits could lapse. Check with your HR department about COBRA or continuation options early.
Can you collect state disability insurance and workers’ comp at the same time?
Not for the same injury. California prohibits stacking full TD benefits and full SDI for the same wage loss period. If you have a separate, non-work-related condition on top of your workplace injury, partial SDI coordination might be possible, but those situations are complicated and worth discussing with an attorney.
What Happens to Workers’ Comp Benefits When You Settle an Injury Case?
If someone other than your employer caused your workplace injury (a negligent driver, a defective product manufacturer, a property owner), you might have both a workers’ comp claim and a personal injury claim. The personal injury claim is how you recover that one-third of your wages that’s unaccounted for, plus pain and suffering and other damages that workers’ comp never covers.
But there’s a catch. Your workers’ comp insurer gets a lien on your personal injury settlement. Under Labor Code § 3860, they’re entitled to be reimbursed for the benefits they paid you. The settlement proceeds get distributed in a specific order: litigation costs and attorney fees first, then the workers’ comp lien, then whatever remains goes to you.
The good news is that liens are often negotiable. Workers’ comp insurers know that if their lien eats up the entire settlement, the injured worker has no reason to pursue the personal injury case in the first place. So there’s a built-in incentive for them to negotiate. Your attorney can often reduce the lien amount, especially when they’re the ones who did all the work to secure the settlement.
What Should You Do If Workers’ Comp Isn’t Covering Your Full Lost Wages?
Workers’ comp was designed as a safety net, not a full replacement. That one-third wage gap is real, and for most families, it’s the difference between keeping up with bills and falling behind.
If your benefits are denied or delayed, you have the right to challenge the decision through the Workers’ Compensation Appeals Board. If a third party caused your injury, a personal injury claim can recover the wages workers’ comp doesn’t touch, plus compensation for pain and suffering.
Contact DK Law for a free case evaluation. We’ll look at your situation, explain whether a third-party claim could increase your total recovery, and you won’t pay anything unless we win.
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