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Stress and psychiatric claims

By Richard Vaughn CPCU, ARM, AIS. Reviewed November 8, 2026. Richard is an insurance professional, not an attorney. This page explains the law; it is not legal advice.

Why psychiatric claims have their own rules

Psychiatric injuries are covered by California workers' compensation, but the Legislature wrote a separate section for them in 1989 and tightened it in 1993 because they are harder to verify and easier to attribute to things outside work. Labor Code §3208.3 sets the conditions. Each one is a threshold the claim has to clear before benefits are owed, and most denied psychiatric claims fail at one of them rather than on the medicine.

A diagnosed disorder that causes disability

The injury must be a mental disorder that causes disability or requires medical treatment, diagnosed under the procedures the DWC adopts or, until then, a nationally accepted psychiatric diagnostic manual (Labor Code §3208.3(a)). The practical effect is that a psychiatric claim rests on a psychiatrist's or psychologist's report applying recognized diagnostic criteria. Feeling overwhelmed, anxious or burned out is not a claim until a qualified evaluator makes a diagnosis.

Predominant cause

You must prove, by a preponderance of the evidence, that actual events of employment were the predominant cause of the disorder, which the statute defines as more than all other causes combined (Labor Code §3208.3(b)(1)). "Actual events" means things that happened, not your perception of them. A hostile supervisor, an unsafe assignment or a workplace assault are actual events; a belief that you were about to be fired, if nothing was said or done, is not. The evaluator weighs the work events against everything else in your life, and the claim succeeds only if work outweighs the rest.

There is one lower standard. If you were the victim of a violent act at work, or were directly exposed to a significant violent act, work need only be a substantial cause, which the statute defines as at least 35 to 40 percent of the total causation from all sources (Labor Code §3208.3(b)(2), (3)).

The six-month rule

No compensation is owed for a psychiatric injury unless you were employed by that employer for at least six months, which need not be continuous (Labor Code §3208.3(d)). The exception is an injury caused by a sudden and extraordinary employment condition: an event that is both unexpected and outside what the job ordinarily involves, such as an explosion or a robbery. Ordinary workplace conflict in the first six months does not qualify, however severe its effect.

Good-faith personnel actions

A psychiatric injury is not compensable if it was substantially caused by a lawful, nondiscriminatory, good-faith personnel action (Labor Code §3208.3(h)). Discipline, performance reviews, transfers, demotions, schedule changes and layoffs are personnel actions. If they were lawful, applied in good faith and not discriminatory, the psychiatric effect of receiving them is not a work injury, even when it is real and even when the action was mistaken. The employer bears the burden of proving the defense, and the usual fight is over whether the action was in fact in good faith and whether it was a substantial cause (again, 35 to 40 percent) of the disorder.

Claims filed after a termination notice

A psychiatric claim filed after you have been told you are being terminated or laid off, for an injury that predates the notice, is barred unless work was the predominant cause and at least one of five conditions is met: the injury came from sudden and extraordinary events; the employer had notice of the psychiatric injury before the termination notice; medical records before the notice show treatment for it; a court or the appeals board has found sexual or racial harassment; or the date of injury falls after the notice but before the termination takes effect (Labor Code §3208.3(e)). The rule exists to screen claims that first appear when a job ends; a worker who was already being treated, or had already told the employer, is outside it.

Psychiatric effects of a physical injury

Depression or anxiety that follows a serious physical injury is a compensable consequence of that injury: treatment for it is covered the same way as treatment for the physical condition. For injuries on or after January 1, 2013, however, a psychiatric condition arising from a physical injury does not increase the permanent disability rating unless it results from being the victim of a violent act or exposed to a significant violent act, or from a catastrophic injury such as loss of a limb, paralysis, severe burns or severe head injury (Labor Code §4660.1(c)). Treatment, yes; added rating, usually no.

What a compensable psychiatric claim pays

Once a psychiatric injury clears the thresholds, the benefits are the same as for any other injury: medical treatment reasonably required to cure or relieve it, including psychotherapy and medication under the treatment guidelines; temporary disability while a doctor says you cannot work, within the 104-week limit; permanent disability if the condition leaves a lasting impairment after it stabilizes, rated under the same schedule as a physical injury; and the job displacement voucher if you cannot return and are not offered work. The treating doctor is a psychiatrist or psychologist in the medical provider network, and disputes about the diagnosis or causation go to a psychiatric or psychological qualified medical evaluator through the same panel process as any other claim.

What this site does not say

Search results for stress claims are full of settlement figures. This site does not publish one, because there is no typical amount: a psychiatric claim's value depends on the rating from the medical-legal report, the weekly rate for the year of injury, and whether it clears the thresholds above at all. The permanent disability page shows what any given rating is worth in weeks and dollars; the settlements page explains how the two kinds of settlement work. For the employer side of the same rules, the DWC publishes an information sheet on preventing psychiatric injuries, which is in this site's sources.

Questions people ask

Richard Vaughn CPCU, ARM, AIS

Richard Vaughn spent 35 years in commercial property and casualty insurance, most of it in workers' compensation: running a self-insured group, auditing premiums, and implementing claims systems for carriers and third-party administrators. He is not an attorney. dickvaughn.com