MJP –
The Division of Workers’ Compensation’s (DWC) Audit and Enforcement Unit conducts a profile audit review (PAR) for all adjusting locations of California workers’ compensation claims at least once every five years, per the requirements of Labor Code sections 129 and 129.5.
Performance of the adjusting locations is measured in five areas of claims administration:
- The payment of accrued and undisputed indemnity
- The late first payment of temporary disability / first notice of salary continuation
- The late first payment of permanent disability and death benefits
- The late subsequent indemnity payments
- The provision of notices with Qualified Medical Evaluator/Agreed Medical Evaluator advice.
DWC annually establishes profile audit review and full compliance audit (FCA) standards in accordance with Labor Code sections 129(b)(1) and (2) and California Code of Regulations, title 8 (8 C.C.R.), section 10107.1. The 2025 standards are based on the audit results of calendar years 2021 through 2023.
Performance Standards for 2025
The PAR performance standard for audits conducted in 2025 is 1.57376. Audit subjects with PAR performance ratings of 1.57376 or lower will be required to pay any unpaid compensation, but no administrative penalties will be assessed.
Report: Temporary Total Disability Rates for 2025 Announced by DWC, According To DIR
If an audit subject’s PAR performance rating is 1.57377 or higher, the audit will expand to a FCA, and an additional sample of indemnity claims will be audited.
The FCA performance standard for audits conducted in 2025 is 2.14192. Audit subjects with an FCA performance rating of 2.14192 or less will be required to pay any unpaid compensation and administrative penalties will be assessed for all violations involving unpaid and late paid compensation.
If an audit subject’s full compliance audit performance rating is 2.14193 or higher, an additional sample of denied claims as well as the expanded sample of indemnity claims will be audited. Penalties will be assessed for all violations as appropriate under 8 C.C.R. sections 10111 through 10111.2.
Severity Rate Standard for 2025
The Severity Rate standard for 2025 is $157.44.
More information on the performance standards that will be in use for the profile audit reviews and full compliance audits during calendar year 2025 will be posted on the DWC Audit and Enforcement Unit.
The California Department of Industrial Relations, established in 1927, protects and improves the health, safety, and economic well-being of over 18 million wage earners, and helps their employers comply with state labor laws. DIR is housed within the Labor & Workforce Development Agency
