Workers' comp · License requirements
Do California contractors need workers' comp if they have no employees?
Checked 20 October 2026 against CSLB's workers' comp page and forms 13L-50 and 13L-49, CSLB Board and stakeholder packets, the Business and Professions Code and Labor Code, and SB 216, SB 1455 and SB 291 · Written by the License Ladder team · Reviewed by AJ Sokol, Co-Founder
Try License Ladder for Free15 free cards in your browser. No credit card.Try freeTry License Ladder for Free15 free cards on the App StoreGet
Pass guarantee. Hit a green readiness score, and if you don't pass, we refund you.
Not yet, for most licenses. As of October 2026, a CSLB licensee with no employees can file an exemption instead of a policy, unless the license holds C-8, C-20, C-22, C-39 or C-61/D-49 or an RME qualifies it. That changes on January 1, 2028: under SB 1455, every active license needs workers' comp on file, except a joint venture with no employees. The 2026 date in CSLB's 2022 press release no longer applies.
Who can file a workers' comp exemption with CSLB today?
You can file CSLB's exemption instead of a policy only if three things are true. Your business employs no one covered by California's workers' comp laws. No RME qualifies the license. And the license holds none of five classifications. An owner, partner, officer, member or manager signs it under penalty of perjury (CSLB and B&P 7125, checked October 2026).
You can file the exemption if all of these are true
- No one works for you as an employee. Home improvement salespersons registered to your license count as employees.
- Your qualifier is not a responsible managing employee (RME).
- Your license has no C-8, C-20, C-22, C-39 or C-61/D-49 classification.
- Your license is active. An inactive license needs no policy and no exemption on file.
- An owner, partner, officer, member or manager signs it.
You need a policy instead if any of these is true
- You employ anyone, even one person, in a way covered by California's workers' comp laws.
- A home improvement salesperson is registered to your license.
- An RME qualifies your license.
- You hold C-8, C-20, C-22, C-39 or C-61/D-49.
A Certification of Self-Insurance from the Department of Industrial Relations (DIR) also counts.
How to file the exemption
File it online through CSLB, or print form 13L-50 (rev. 11/2022), sign it and mail it to CSLB. Both are on CSLB's Forms and Applications page. The form says not to submit it if you have employees, an RME qualifier, an inactive license or one of the five classifications.
How a policy gets on file
Your insurer files the Certificate of Workers' Compensation Insurance with CSLB, online or by mail. Only insurers licensed to write workers' comp in California can file one. The certificate names CSLB as certificate holder and shows your business name and license or application fee number.
At every renewal
With an exemption on file, you recertify it on the renewal form or send a certificate, or CSLB won't renew the license. If CSLB rejects the renewal for this, you have 30 days from its notice to fix it and still get the renewal dated to your postmark (B&P 7125.5). With a policy, you list its top three class codes (B&P 7125.6).
Joint ventures and inactive licenses
A joint venture license with no employees files the same no-employee statement, and keeps that option after 2028. An inactive license needs nothing on file, now or after 2028. Reactivating it brings the requirement back (B&P 7125).
Sources: CSLB, Workers' Compensation Requirements; CSLB, Forms and Applications; CSLB form 13L-50 (rev. 11/2022); B&P 7125, 7125.5 and 7125.6 on leginfo. Checked 20 October 2026.
Which licenses need workers' comp even with no employees?
Five: C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing and C-61/D-49 Tree Service. A license with any of them must keep a workers' comp policy, or a DIR certification of self-insurance, on file whether or not it has employees, per CSLB's workers' comp page (checked October 2026). Roofing came first; the other four followed on January 1, 2023.
| Classification | No exemption since | On a license that also holds other classifications |
|---|---|---|
| C-8 Concrete | January 1, 2023 (SB 216) | CSLB removes the C-8 if no valid certificate arrives |
| C-20 Warm-Air Heating, Ventilating and Air-Conditioning | January 1, 2023 (SB 216) | CSLB removes the C-20 |
| C-22 Asbestos Abatement | January 1, 2023 (SB 216) | CSLB removes the C-22 |
| C-39 Roofing | January 1, 2007 (AB 881) | CSLB removes the C-39 |
| C-61/D-49 Tree Service | January 1, 2023 (SB 216) | CSLB removes the D-49 |
On a license with only one of these classifications, a missing policy suspends the whole license automatically (B&P 7125.2). When the license also holds other classifications, CSLB removes the mandatory one instead, and suspends the license only if it then finds employees and no coverage (B&P 7125(f) and (g)). B, C-10, C-33 and C-36, for example, are not on the list, so a business in those trades with no employees and no RME qualifier can still use the exemption until 2028.
Sources: CSLB, Workers' Compensation Requirements; B&P 7125(b), (f) and (g) and 7125.2 on leginfo; CSLB's industry bulletin of October 11, 2022 (its 2026 date is superseded); AB 881 as chaptered. Checked 20 October 2026.
When will every California contractor need workers' comp?
On January 1, 2028. SB 1455 (Chapter 485, Statutes of 2024) moved the all-licensee requirement there from January 1, 2026, the date SB 216 set in 2022. From 2028, every active license needs a policy or a DIR self-insurance certificate on file. Only a joint venture with no employees can file a statement instead, and inactive licenses need nothing (B&P 7125 as it reads from 2028).
-
1
January 1, 2007: roofers first
AB 881 (Chapter 38, Statutes of 2006) takes the no-employee exemption away from C-39 roofing licenses, and AB 2219 (Chapter 389, Statutes of 2012) later makes the rule permanent. Until 2023, roofing was the only classification with no exemption.
-
2
September 30, 2022: SB 216 signed
SB 216 (Chapter 978, Statutes of 2022) takes the exemption away from C-8, C-20, C-22 and D-49 licenses starting January 1, 2023, and sets January 1, 2026 for every licensee.
-
3
October 11, 2022: CSLB announces 2026
CSLB's press release #22-08 says all licensed contractors “will need insurance by 2026.” The release, with its Spanish translation, is still posted on cslb.ca.gov. Its 2026 date is superseded.
-
4
January 1, 2023: four more classifications
C-8, C-20, C-22 and D-49 licenses need coverage even with no employees. On licenses active after July 1, 2023 that also hold other classifications, CSLB removes the classification if no certificate arrives.
-
5
September 22, 2024: SB 1455 signed
SB 1455 (Chapter 485, Statutes of 2024) moves the all-licensee date to January 1, 2028, keeps the no-employee exemption until then, and gives CSLB until January 1, 2027 to set up a way to verify exemptions.
-
6
January 1, 2026: SB 291 penalties
A licensee found to have employed workers without coverage now faces a minimum civil penalty of $10,000 per violation for a sole owner and $20,000 for a partnership, corporation, LLC or tribal business (B&P 7125.4).
-
7
January 1, 2027: CSLB's verification deadline
B&P 7125.7 requires CSLB to have a process, including an audit, proof or other evidence, to check that exemption filers have no employees, and to report it to the Legislature.
-
8
January 1, 2028: coverage for every active license
The no-employee exemption ends for everyone except a joint venture with no employees. Inactive licenses still need nothing on file.
Could the 2028 date move again?
Only through a new law. The current B&P 7125 is repealed on January 1, 2028 “unless a later enacted statute” passed before then “deletes or extends that date” (B&P 7125(i)). On 20 October 2026, leginfo showed no change after SB 1455.
CSLB has proposed a change. Its March 2026 report to the Legislature suggests a narrower exemption: individual owners only, no RME or registered home improvement salesperson, none of the no-exemption classifications (it adds C-49 Tree and Palm), a business plan and a fee of about $500. That is a proposal, not law.
Sources: B&P 7125 (both versions), 7125.4 and 7125.7 on leginfo; SB 216, SB 1455 and SB 291 as chaptered; AB 881 and AB 2219 on the C-39 rule; CSLB press release, October 11, 2022 (superseded); CSLB stakeholder packet, November 19, 2024; CSLB SB 291 report, March 2026. Checked 20 October 2026.
What happens when you hire your first employee?
Your exemption stops being valid the day you employ anyone covered by California's workers' comp laws, and every employer must have coverage (Labor Code 3700). CSLB gives you 90 days from the hire for proof to reach it. That is time for paperwork, not time to work uninsured: B&P 7125.4 makes it cause for discipline to hire after filing an exemption “without first filing” a certificate. So have the policy in force before the first day of work.
-
1
Buy a policy before the first day
Get a workers' comp policy from an insurer licensed to write it in California, or a Certification of Self-Insurance from the Department of Industrial Relations. California requires every employer to have one or the other (Labor Code 3700).
-
2
Your insurer files the certificate
The insurer files the Certificate of Workers' Compensation Insurance with CSLB, online or by mail, with CSLB as certificate holder and your license number on it. Once you have employees, your exemption no longer counts.
-
3
Check that CSLB has it within 90 days
CSLB accepts a certificate as of its effective date if it arrives within 90 days of that date (B&P 7125.1). After the filing, look up your license on CSLB's site to confirm the coverage shows.
-
4
Keep it continuous
Coverage must not lapse. A lapse suspends the license automatically, and work done while it is suspended counts as unlicensed (CSLB).
Who counts as an employee for the exemption
- Home improvement salespersons registered to your license count as employees (CSLB).
- An RME qualifier counts as an employee too, so a license an RME qualifies can't use the exemption.
- Helpers you pay on a 1099 count as employees unless you can prove all three parts of the ABC test: they are free from your control, their work is outside your usual business, and they run an established business of their own in that trade (Labor Code 2775; Labor Code 3351 applies it to workers' comp). For a written subcontract, Labor Code 2781 uses the older test in Labor Code 2750.5 instead, but only if the subcontractor holds a CSLB license covering the work and meets five other conditions. Under Labor Code 2750.5, a worker doing licensed work without a contractor license is presumed to be an employee.
Sources: CSLB, Workers' Compensation Requirements; CSLB, Forms and Applications; form 13L-50; B&P 7125.1 and 7125.4; Labor Code 2750.5, 2775, 2781 and 3700. Checked 20 October 2026.
What happens if your workers' comp lapses or your exemption is false?
Your license is suspended automatically, by law. The suspension starts on the date coverage lapses, or the date it was required, whichever comes first (B&P 7125.2). Work done while suspended counts as unlicensed. A false exemption is cause for discipline. And since January 1, 2026, a licensee found to have used workers without coverage faces a penalty of at least $10,000 per violation as a sole owner, or $20,000 as an entity (B&P 7125.4).
| What happens | The rule | Law |
|---|---|---|
| Automatic suspension | Starts on the earlier of the lapse date or the date coverage was required. After a lapse, CSLB sends a notice, and a pending suspension can show on the license record for up to 45 days first. | B&P 7125.2 |
| Work while suspended | Counts as unlicensed work, and CSLB can take disciplinary action | CSLB's workers' comp page |
| Getting the license back | Any time, with proof of coverage. A certificate CSLB receives within 90 days of its effective date counts from that date, and the license is reinstated back to it. After 90 days, only if you show the delay was beyond your control (form 13L-49). | B&P 7125.1 and 7125.2 |
| A false exemption, or employing workers without coverage | Cause for discipline. For employing workers without coverage, a minimum civil penalty of $10,000 per violation (sole owner) or $20,000 (partnership, corporation, LLC or tribal business), and more for later violations, up to $30,000 total per occurrence. No renewal or reinstatement until a certificate is on file. | B&P 7125.4, as amended by SB 291, from January 1, 2026 |
| The qualifier | Guilty of a misdemeanor for committing or failing to prevent these violations | B&P 7125.4(b) |
| Stop order at the job site | CSLB or the Director of Industrial Relations can order all employee labor to stop until the employer has coverage. Ignoring the order is a misdemeanor: up to 60 days in county jail, a fine up to $10,000, or both. | B&P 7127; Labor Code 3710.1 and 3710.2 |
CSLB enforces this. From January 1 to July 31, 2026, its Statewide Investigative Fraud Team (SWIFT) issued 181 stop orders for using employee labor without a valid policy, and referred 25 cases against licensees to district attorneys, mainly for failing to secure workers' comp. On July 31, 2026, 4,733 active licenses were under a workers' comp suspension and 3,137 more had one pending (CSLB, September 2026 Board packet).
Sources: B&P 7125.1, 7125.2, 7125.4 and 7127; SB 291 as chaptered; Labor Code 3710.1 and 3710.2; CSLB, Workers' Compensation Requirements; CSLB form 13L-49; CSLB Board packet, September 2026 (Licensing and Enforcement updates). Checked 20 October 2026.
How many California contractors use the workers' comp exemption?
On July 31, 2026, 121,679 active licenses, or 50%, had a workers' comp exemption on file. Another 114,219, or 47%, had a policy, per CSLB's September 2026 Board packet. Among General Building (B) licenses with a policy or exemption on file, 59% had the exemption. Unless the law changes, every exempt license that stays active, other than a joint venture with no employees, will need coverage on January 1, 2028.
| Classification | Exemptions on file | Policies on file | Exemptions as a share of all on file |
|---|---|---|---|
| B General Building | 62,736 | 43,170 | 59% |
| C-10 Electrical | 14,848 | 13,541 | 52% |
| C-36 Plumbing | 9,442 | 8,303 | 53% |
| C-33 Painting | 8,794 | 7,052 | 55% |
| C-61 Limited Specialty | 7,328 | 13,161 | 36% |
| A General Engineering | 5,287 | 9,665 | 35% |
| C-27 Landscaping | 5,069 | 7,154 | 41% |
| C-54 Ceramic and Mosaic Tile | 3,502 | 2,736 | 56% |
| B-2 Residential Remodeling | 1,230 | 424 | 74% |
| C-49 Tree and Palm | 78 | 497 | 14% |
| C-20 HVAC (no exemption) | 6 | 11,272 | 0.05% |
| C-8 Concrete (no exemption) | 10 | 5,196 | 0.2% |
| C-39 Roofing (no exemption) | 3 | 5,405 | 0.06% |
| C-22 Asbestos Abatement (no exemption) | 1 | 310 | 0.3% |
The rows add up to more than CSLB's license totals, which suggests that a license with several classifications is counted under each one. CSLB's table shows a handful of exemptions even in the no-exemption classifications and does not say why. Since January 1, 2024, CSLB has processed new tree service applications as C-49 Tree and Palm, not C-61/D-49 (CSLB's November 2023 bulletin). B&P 7125 and CSLB's list of five name D-49, not C-49; on July 31, 2026, 78 C-49 licenses had an exemption on file. CSLB's March 2026 report proposes excluding C-49 from any future exemption too. That is a proposal, not law.
The share has stayed near 50% for years. CSLB's 2022 release put it at about 50 to 60 percent, and its November 2024 stakeholder packet counted 118,000 licensees, or 49%. CSLB says its enforcement shows that many licensees with an exemption on file do have workers (CSLB, November 2024).
Sources: CSLB Board packet, September 2026 (Licensing Program Update: workers' comp coverage for active licenses, July 31, 2026); CSLB stakeholder packet, November 19, 2024; CSLB press release, October 11, 2022; CSLB SB 291 report, March 2026; CSLB industry bulletin, November 2023 (C-49 Tree and Palm). The note on row totals is our arithmetic. Checked 20 October 2026.
Is workers' comp on the CSLB Law and Business exam?
Yes. Workers' compensation insurance is the first subtopic of Insurance and Liens, about 12% of the Law and Business exam in CSLB's study guide 13E-LAW (03-2026). Hiring and payroll fall under Employment Requirements, about 20%. The qualifier in every classification takes this exam unless a waiver applies.
What CSLB lists in Insurance and Liens
Three subtopics: workers' compensation insurance, business insurance, and liens and other remedies. CSLB publishes no question count for any section. See all seven sections and their weights, or try the free Law and Business practice test.
How to prepare for it
Use License Ladder as directed. It is $99 for Law & Business and has the printed 142-card deck, digital study guides and one year of the app. Study the cards and guides, then work the app's practice questions and timed mock exams until your readiness score turns green.
Sources: CSLB, Law and Business study guide 13E-LAW (03-2026); its Spanish edition. Checked 20 October 2026.
Questions people ask about contractor workers' comp
Workers' comp is Law and Business material
License Ladder covers Law & Business, the exam every classification takes: the printed 142-card deck, digital study guides and one year of the app, for $99. One payment, no subscription. Use it as directed until your readiness score turns green.
Enter your name and email to access the free demo. No credit card.
15 free cards on the App Store.
Where every fact on this page comes from
We fetched and read each source below on 20 October 2026. CSLB revises its pages and forms; if anything here differs from CSLB’s own wording when you read it, CSLB’s governs.
CSLB pages and forms: Workers' Compensation Requirements · Forms and Applications · Exemption from Workers' Compensation, form 13L-50 (rev. 11/2022) · Request for Workers' Compensation Insurance Certificate Acceptance, form 13L-49
CSLB reports, packets and releases: Board meeting packet, September 2026 (Licensing and Enforcement updates) · Workers' Compensation Insurance Stakeholder Meeting packet, November 19, 2024 · SB 291 Workers' Compensation Exemption Report, March 2026 · Press release, October 11, 2022 (its 2026 date is superseded) · Industry bulletin, October 11, 2022 (its 2026 date is superseded) · Industry bulletin, November 13, 2023 (C-49 Tree and Palm)
CSLB study guides: Law and Business study guide, 13E-LAW (03-2026) · Law and Business study guide, Spanish edition
Statutes (leginfo): B&P 7125, both versions (Article 7.5) · B&P 7125.1 · B&P 7125.2 · B&P 7125.4 · B&P 7125.5 · B&P 7125.7 · B&P 7127 · Labor Code 2750.5 · Labor Code 2775 · Labor Code 2781 · Labor Code 3351 · Labor Code 3700 · Labor Code 3710.1 · Labor Code 3710.2
Bills as chaptered: AB 881 (Chapter 38, Statutes of 2006) · AB 2219 (Chapter 389, Statutes of 2012) · SB 216 (Chapter 978, Statutes of 2022) · SB 1455 (Chapter 485, Statutes of 2024) · SB 291 (Chapter 455, Statutes of 2025)
We looked for and did not find: a CSLB web page that states the January 1, 2028 date (CSLB's workers' comp page cites B&P 7125 but does not mention 2028; the statute, CSLB's November 2024 packet and its March 2026 report do); any law after SB 1455 that changes that date (leginfo, 20 October 2026); and CSLB's reason for the few exemptions its July 2026 table shows in the five no-exemption classifications. The exemption PDF linked from CSLB's workers' comp page returned “not found” on 20 October 2026; form 13L-50 on CSLB's Forms page works.
License Ladder is independent study material, not affiliated with or endorsed by CSLB or PSI.