A California contractor with no employees can still file a workers comp exemption with the CSLB in most license classes, but Business and Professions Code 7125 ends that exemption for the remaining classes on January 1, 2028. From then, a licensee needs a workers comp certificate or a self-insurance certification on file unless an exception applies. C-8, C-20, C-22, C-39 and C-61/D-49 licensees already can't file it.
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Today a licensee who has nobody on payroll can tell the Contractors State License Board so on an exemption form and keep the license active without a workers comp policy. Business and Professions Code 7125, in the version that takes effect on January 1, 2028, removes that choice for the license classes that still have it. From that date the CSLB expects proof from every licensee: a current workers comp certificate, or a certification showing the business is self-insured.
| Licensee | Before the Deadline | From the Deadline | Source |
|---|---|---|---|
| Any licensee with one or more employees | Workers comp required. | Workers comp required, with the certificate on file. | CSLB; Business and Professions Code 7125 |
| No-employee licensee in most classes | May file an exemption. | Needs a certificate or self-insurance certification on file. | Business and Professions Code 7125 |
| C-8, C-20, C-22, C-39 and C-61/D-49 licensees | Must carry coverage with or without employees. | No change. | CSLB |
| Joint venture with no employees | May file an exemption. | Excepted if it files the required statement. | Business and Professions Code 7125 |
| Inactive license | No coverage filing while inactive. | Excepted while the license stays inactive. | Business and Professions Code 7125 |
The CSLB's own page says coverage is required as soon as a contractor has a single employee, so the deadline matters most to owner-operators who work alone. The California contractor workers comp rules page puts this rule beside the state's other requirements.
Five groups on the CSLB's list can't file the exemption now: C-8, C-20, C-22, C-39 and C-61/D-49, which covers concrete, warm-air heating and air conditioning, asbestos abatement, roofing and tree service work. For these licensees the deadline changes nothing, because they already need a policy or self-insurance certification whether or not they have employees.
If your license is in one of these groups, start with the trade page: C-8 workers comp for concrete contractors, California HVAC workers compensation for the C-20 Warm-Air Heating, Ventilating and Air-Conditioning class and workers comp for tree service companies in California. Tree service licensees should confirm their current filing status with the CSLB, since its tree classes have been reorganized.
The deadline is set in statute, but statutes can be amended before they take effect. The Legislature asked the CSLB, through SB 291, to report on how exemptions could be checked, whether by an audit, proof or other means. The CSLB has delivered that report, and it proposes keeping a narrower exemption rather than ending it outright.
A proposal is not a law. Until the Legislature acts, plan around the date in Business and Professions Code 7125, and check the CSLB's workers comp page again before your next renewal.
Filing an exemption while you have employees, or letting employees work without coverage, now carries higher civil penalties under Business and Professions Code 7125.4, from SB 291.
The Helper Who Makes You an Employer
Under Labor Code 2750.5, someone doing work that needs a contractor license for you, without a license of their own, is presumed to be your employee. A no-employee exemption can be false the day a cousin or an unlicensed helper starts on your jobs.
Corporate officers and LLC members have their own waiver rules. The California workers comp owner waiver guide explains who may waive and how; confirm any choice about your own coverage with the carrier.
Find your trade and read what California expects of it, from workers comp for general contractors in California to workers comp for plumbers in California and California electrician workers compensation. When you know who works for you and what they earn, get a California contractor workers comp quote.
Owner waivers and wage-split payroll are among the other workers comp guides for contractors and restaurants. A business buying its first policy can start with workers comp for a new contracting business.
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If your class isn't one of C-8, C-20, C-22, C-39 and C-61/D-49, and you have no employees, you can generally file the exemption today. Business and Professions Code 7125 ends that option for the remaining classes on January 1, 2028. Check the CSLB's workers comp page, since the rule could still change.
Under the current statute, yes: from January 1, 2028 a licensee needs a workers comp certificate or a self-insurance certification on file. The listed exceptions are a joint venture with no employees that files a statement and an inactive license. The CSLB has proposed keeping a narrower exemption, so watch for changes.
Business and Professions Code 7125.4, from SB 291, sets a minimum civil penalty of $10,000 per violation for a sole owner licensee and $20,000 for a partnership, corporation, LLC or tribal business. For later violations the total may not exceed $30,000 per occurrence.
An inactive license is one of the exceptions in the version of Business and Professions Code 7125 that starts on January 1, 2028. Ask the CSLB what inactive status would mean for your business, and whether you could still take jobs, before relying on it.
The Legislature asked the CSLB to report on ways to verify exemptions, such as an audit, proof or other means, and the CSLB has delivered that report. How checks will work in practice depends on what the Legislature and the CSLB adopt, so check the CSLB's current guidance.
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California's no-employee exemption is scheduled to end. Plan the policy before the date arrives.
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