What is the maximum penalty for failure to file a complete or timely annual report?

The maximum penalty for failure to file a complete or timely annual report in the California Workers' Compensation system is indeed $1,500 or 5% of the last report's incurred liabilities, whichever is less. This regulation is in place to ensure that self-insured employers comply with reporting requirements that are crucial for maintaining the integrity of the workers' compensation system.

By establishing this penalty structure, the California Workers' Compensation regulations aim to motivate timely and accurate reporting, which is essential for proper monitoring of self-insured entities. The penalty serves as a financial deterrent against non-compliance, which could otherwise jeopardize a self-insured employer’s ability to manage and fund workers' compensation claims effectively.

Understanding this penalty structure is important for anyone involved in claims handling or self-insurance practices, as it highlights the regulatory expectations that must be met to avoid financial repercussions.