For California workers' comp policies starting or renewing on or after September 1, 2026, the approved advisory pure premium rates average $1.65 per $100 of payroll, a 6.6 percent increase over the 2025 approved rate according to the California Department of Insurance (the WCIRB had asked for 10.4 percent). At the same time, the wage thresholds that separate the high-wage and low-wage codes rose by $2 to $5 an hour for 13 construction trades. Workers paid between the old and new thresholds now fall into the more expensive low-wage code. Actual premiums depend on your carrier, class codes, payroll, and experience modification.
Two Changes Hit on the Same Day
If your California workers' comp policy starts or renews on or after September 1, 2026, two things changed at once:
- The benchmark rate went up. The approved advisory pure premium rates now average $1.65 per $100 of payroll, which the California Department of Insurance described as a 6.6 percent increase over the 2025 approved rate. The WCIRB had requested 10.4 percent.
- The dual-wage thresholds went up. Thirteen construction trades now need a higher hourly wage to qualify for the cheaper high-wage class code.
Either one alone would raise renewals. Together, some contractors will see a bigger jump than the headline rate suggests.
Why Rates Are Rising
The WCIRB pointed to three drivers: more frequent cumulative trauma claims, higher medical costs, and higher claim-handling expenses. Cumulative trauma claims, injuries that build up over time instead of from one incident, are especially common in physical trades. None of these trends is reversing quickly.
Keep in mind the advisory rate is a benchmark for losses only. Carriers file their own rates on top of it. But advisory changes are a reliable signal of where the market is heading.
The Dual-Wage Change Is the Hidden Increase
Sixteen construction trades in California are split into two class codes. Workers paid at or above the hourly threshold go in the high-wage code, which carries a lower rate. Everyone below it goes in the low-wage code, which costs more.
Here are the new thresholds effective September 1, 2026:
| Trade | Class codes | Old threshold | New threshold |
|---|---|---|---|
| Carpentry | 5403 / 5432 | $41 | $46 |
| Steel framing | 5632 / 5633 | $41 | $46 |
| Wallboard | 5446 / 5447 | $41 | $45 |
| Electrical | 5190 / 5140 | $36 | $40 |
| Glaziers | 5467 / 5470 | $39 | $43 |
| Plastering and stucco | 5484 / 5485 | $38 | $42 |
| Masonry | 5027 / 5028 | $35 | $37 |
| Sheet metal | 5538 / 5542 | $33 | $37 |
| Concrete and cement | 5201 / 5205 | $33 | $36 |
| Sprinkler installation | 5185 / 5186 | $33 | $36 |
| Painting and waterproofing | 5474 / 5482 | $32 | $36 |
| Plumbing and HVAC | 5183 / 5187 | $32 | $35 |
| Roofing | 5552 / 5553 | $31 | $33 |
Consider a framer paid $44 an hour. Last year that worker was in the high-wage carpentry code. On a renewal after September 1, 2026, the same worker falls below the new $46 threshold and moves to the more expensive low-wage code, with no change in pay or duties.
Five Ways to Soften Your Renewal
- Review every worker near a threshold. If a small raise puts a key employee over the line, the premium savings can offset part of the raise. Run the numbers with your broker before you renew.
- Document wages carefully. Carriers look at the hourly rate actually paid. Clean, per-employee payroll records are what get workers placed in the high-wage code.
- Split payroll correctly. Office, estimating, and outside sales time belongs in much cheaper codes when your records support it. Our workers' comp audit guide explains the records auditors expect.
- Collect subcontractor certificates. An uninsured sub's pay can be added to your payroll at audit, at your rate.
- Shop the renewal. Carrier appetite for construction classes varies widely, and a broker with multiple markets can often find a better fit than a straight renewal.
Get a Second Look Before You Renew
If your renewal is coming up, we can compare it against other carriers and check your wage placement against the new thresholds. Request a free workers' comp quote or read more about California workers' compensation for contractors.
Frequently Asked Questions
How much did California workers' comp rates go up in 2026?
The approved advisory pure premium rates for policies starting on or after September 1, 2026 average $1.65 per $100 of payroll. The California Department of Insurance described that as a 6.6 percent increase over the 2025 approved rate, below the 10.4 percent increase the WCIRB had requested. The WCIRB named more frequent cumulative trauma claims, higher medical costs, and higher claim-handling expenses as the drivers.
Is the advisory rate what I will actually pay?
No. Advisory pure premium rates are a benchmark for expected losses only. Each carrier files its own rates and adds expenses, and your premium also depends on your class codes, payroll, experience modification, and any credits or debits. Advisory changes still signal the direction carriers will move.
What is a dual wage threshold?
Sixteen California construction trades are split into a high-wage and a low-wage class code. Payroll for workers paid at or above the hourly threshold goes into the high-wage code, which has a lower rate. Workers below it go into the low-wage code, which has a higher rate. When the threshold rises, some workers who used to qualify for the cheaper code no longer do.
Which trades had their dual-wage thresholds raised?
Thirteen trades, including carpentry and steel framing (from $41 to $46 an hour), wallboard ($41 to $45), electrical ($36 to $40), glaziers ($39 to $43), plastering ($38 to $42), masonry ($35 to $37), plumbing and HVAC ($32 to $35), sprinkler installation ($33 to $36), concrete ($33 to $36), painting and waterproofing ($32 to $36), sheet metal ($33 to $37), and roofing ($31 to $33).
How can I lower my workers' comp premium this year?
Document wages so every qualifying worker lands in the high-wage code, keep payroll split correctly across class codes, break out overtime, collect certificates from every subcontractor, and put a written safety and return-to-work program in place. Then shop the renewal, because carrier appetites for construction classes vary widely.
Sources
- California Department of Insurance: Commissioner's decision on the September 1, 2026 workers' compensation advisory pure premium rate (July 10, 2026)
- Insurance Journal: California Insurance Commissioner OKs Upping Workers' Comp Pure Premium
- Carrier Management: California Commissioner OKs Workers' Comp Pure Premium Increase
- WCIRB: Report on the Dual Wage Classification Thresholds
- Rancho Mesa: WCIRB Approves Dual Wage Threshold Increases for 2026