Back in August, the California Commission on Health and Safety and Workers' Compensation issued a report claiming that employers cost the California Workers Compensation system billions of dollars in premiums by underreporting payrolls. This commission is a "joint labor-management body", according to their website, so it would appear that they don't have a particular axe to grind on this subject. But even so, I don't know how well this finding was received by California employers. In my experience, a fair number of them feel pretty put-upon by the California Workers Compensation system. A fairly common feeling expressed to me by employers is that the California WC system is literally threatening to put them out of business.
Having worked with a fair number of California employers, I can see their point. A lot of them are covered by SCIF, the state Workers Comp fund, and SCIF often comes across as difficult to deal with. It's not easy to make private insurance companies look reasonable, but by comparison to SCIF they are, at least in this humble consultant's opinion.
On top of that, the rules and regulations in California give employers fewer protections against premium increases than can be found in a lot of other states. One would think that the opposite would be true, but it's not. So I might suggest to the commission that they keep in mind that some of those employers that they accuse of ripping off the system might be more desperate than greedy. The overall system that California has created for Workers Compensation insurance just isn't very employer-friendly. I know that employers in most states feel that way, but in California it's noticably worse than elsewhere.
The Golden State needs to take care that they don't kill the geese that lay their golden eggs--private employers, that is, particularly small and medium businesses.