SB216 – New Worker’s Compensation Guidelines in California

ATTENTION ALL CALIFORNIA CONTRACTORS

If you are currently filed as exempt from worker’s compensation on your contractor’s license and don’t have any employees, we want to make you aware of the upcoming changes coming to the CSLB and the state of California for 2027 and 2028:

The upcoming change related to contractor workers’ compensation in California is driven by SB 216 and SB 1455, which mandates that nearly all licensed contractors carry workers’ compensation insurance, even if they have zero employees.

If you are a contractor currently filed as exempt, please note that as of January 1, 2027 the Contractors State License Board (CSLB) rolls out its strict new exemption-verification process. After that, Senate Bill 1455 dictates that the deadline for all contactors to carry work comp (whether you have payroll or not) is January 1, 2028.

Key Details of the Transition for Contractors

• The 2027 Verification Process: Starting by January 1, 2027, the CSLB will enforce a verification system requiring solo contractors who claim a workers’ comp exemption to prove they truly have no employees (through audits, sworn statements, or business documentation).
• The 2028 Universal Mandate: By January 1, 2028, the exemption goes away almost entirely, meaning every active licensee across all classifications will need an active workers’ comp policy on file with the CSLB.
• Already Affected Trades: Certain high-risk classifications—such as Concrete (C-8), HVAC (C-20), Asbestos Abatement (C-22), and Tree Service (D-49)—have already been required to carry coverage regardless of employee count since 2023, alongside Roofing (C-39) which was mandated earlier.
• Penalties: Under SB 291, California heavily increased civil and criminal penalties for contractors caught operating with false exemptions or lapsing on mandatory coverage.