California contractors need workers comp from their first employee, and C-8, C-20, C-22, C-39 and C-61/D-49 license holders need it even when they work alone. The no-employee exemption for the other license classes is scheduled to end on January 1, 2028, several construction trades are split by hourly wage, and restaurants report payroll under California's own rules for tips and meals.
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The CSLB ties workers comp to the contractor license, and the WCIRB sets the classifications and payroll rules carriers rate from. Restaurants and breweries hold no contractor license, so only the owner and payroll rows reach them.
| Rule | What It Says | Who It Reaches | Source |
|---|---|---|---|
| First employee | A licensed contractor needs workers comp once it has a single employee. | Contractors | CSLB |
| Classes with no exemption | C-8, C-20, C-22, C-39 and C-61/D-49 licensees must carry workers comp whether or not they have employees. | Contractors | CSLB |
| No-employee exemption | Still open to the other license classes, and scheduled to end on January 1, 2028. | Contractors | Business and Professions Code 7125 |
| False exemption or uncovered workers | A civil penalty of at least $10,000 per violation for a sole owner or $20,000 for an entity; later violations up to $30,000 per occurrence. | Contractors | Business and Professions Code 7125.4 |
| Unlicensed help on licensed work | Presumed to be an employee unless they hold their own valid contractor license. | Contractors | Labor Code 2750.5 |
| Corporate officers and directors | An owner with at least 10% may waive coverage; the waiver takes effect when the insurer accepts it. | Contractors and restaurants | Department of Insurance notice |
| Tips, meals and overtime | Tips stay out. Meals and lodging stay out unless the class wording or a wage reduction brings them in. Overtime premium stays out only when recorded separately. | Restaurants and contractors | WCIRB payroll rules |
The CSLB wants a certificate of coverage or an exemption on file, and the exemption fits only a licensee with no employees in a class allowed to use it. Under the version of Business and Professions Code 7125 that takes effect on January 1, 2028, every licensee will need a certificate or self-insurance on file, apart from an inactive license or a joint venture with no employees. The CSLB's report to the Legislature proposes keeping a narrower exemption, so the rule could still change. The California 2028 workers comp deadline guide follows it.
SB 291 raised the penalties for a false exemption and asked the CSLB for a way to check exemptions. Labor Code 2750.5 matters to anyone who brings in help: an unlicensed person doing licensed work is presumed to be your employee, and that pay may be counted at audit, as the uninsured sub charges guide explains.
A corporate officer or director may waive coverage with at least 10% ownership, or at least 1% when a close relative owns 10% or more and the owner has health coverage. Each person meets the test alone, and the waiver starts when the insurer accepts it. A sole shareholder is excluded unless they elect in. Among partners and LLC members, only general partners and managing members are named as able to waive.
Officers, partners and members who stay on the policy are reported within a WCIRB payroll range of $66,300 to $171,600 a year. Settle the choice with the carrier once you know what a waiver gives up; the California workers comp owner waiver guide walks through each entity type.
California leaves tips out of payroll entirely, which matters for a dining room with a large tipped staff. Meals and lodging stay out unless a classification's wording or a wage reduction brings them in, and the overtime premium stays out only when records show it apart from regular pay. The restaurant workers comp payroll by role guide sorts kitchen, service and bar pay.
California runs its own classification system through the WCIRB, apart from the NCCI system Arizona and Nevada use, so California codes have no standing in either state. Several construction trades are split by hourly wage for policies from September 1, 2026: carpentry divides at $46.00 an hour, electrical at $40.00 and plumbing at $35.00, among others. Each worker's regular hourly wage, not the crew average, decides the side.
The California workers comp classifications by trade page lists the published classifications that mention each trade's work and every threshold. Which one applies depends on actual duties and the carrier's determination; this site never assigns one. Crown Your Crew builds a crew and a payroll estimate from the codes on your policy, and the dual wage workers comp California guide covers the records an auditor checks.
The Insurance Commissioner adopted an average advisory pure premium rate of $1.65 per $100 of payroll from September 1, 2026, 6.6% above the prior approved level, after the WCIRB proposed a larger increase. It is a benchmark for expected claim costs, not a price: each carrier files its own rates. The workers comp rate changes California Arizona Nevada page tracks it beside the Arizona and Nevada actions.
We can place through State Fund as well as national carriers, subject to underwriting. When your payroll and renewal month are handy, get a California workers comp quote.
Before a California renewal, line up the records that move the premium. We can place through State Fund as well as other carriers, so a review compares more than one market.
Workers comp follows California rules statewide, but payroll follows local pay. Each metro page below lists its cities by county with their ZIP codes, shows local trade pay beside the wage lines, and links the permit offices, projects and restaurant districts that bring work to the area.
Each page below covers one trade in California: its license, the published classifications that mention its work, what moves its premium and what an auditor asks for. Contractors can also start from workers comp for construction trades.
Building trades
Mechanical and electrical trades
Site and outdoor trades
Restaurants and breweries
Send your trade, state and payroll, and a broker reviews the request. If you would rather talk first, leave a number.
Swipe or use the arrows for every answer.
For now, yes, if your license class isn't one that must carry coverage anyway and you truly have no employees. Under current law that option ends on January 1, 2028, though the CSLB has asked to keep a narrower version, so check where things stand before you renew.
The exemption stops fitting the day you have an employee, so a policy needs to be in place first. Penalties for a false exemption or uncovered employees start at $10,000 for each violation by a sole owner, or $20,000 when the licensee is an entity.
No. California leaves tips out of the payroll a restaurant's premium is figured on, and meals and lodging stay out unless a classification or a wage reduction brings them in. Nevada handles tips the opposite way, so a group with locations in both states reports them differently.
It depends on the entity. A corporate officer or director with at least 10% ownership may waive, and a sole shareholder is excluded unless they elect in. Confirm it with the carrier ahead of the policy's start.
We can place through State Fund as well as national carriers, subject to underwriting. Which market fits depends on your trade or restaurant format, payroll, claims and experience, and a broker reviews every request before anything is quoted.
Some carriers offer monthly payroll reporting or pay-as-you-go billing for California businesses, often through a connected payroll provider. Availability depends on the carrier, your trade and underwriting, and a final audit still happens.
11 official sources, every one checked
Reviewed by David Gleason, Principal, on .
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California workers comp for contractors and restaurants, from the CSLB to the audit.
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