Today, every California contractor with employees needs workers’ comp, and five license classifications need it even with no employees. A 2022 law, SB 216, extends the requirement to all licensed contractors; a 2024 law, SB 1455, moved that date from January 1, 2026 to January 1, 2028. If you rely on an exemption today, plan your coverage well before your first license renewal after that date. A lapse in coverage suspends your license.
Who needs workers’ comp today
California requires employers to carry workers’ compensation, and the Contractors State License Board (CSLB) requires every licensee to keep either a workers’ comp certificate or an exemption on file.
According to CSLB, these classifications must carry workers’ comp whether or not they have employees:
- C-8 Concrete
- C-20 Warm-Air Heating, Ventilating and Air-Conditioning (HVAC)
- C-22 Asbestos Abatement
- C-39 Roofing
- C-61/D-49 Tree Service
When an exemption is allowed today
CSLB does not accept an exemption if you employ anyone subject to California workers’ compensation law, if your license has a Responsible Managing Employee, or if you hold one of the classifications above.
California law presumes that people who work for you are employees. Calling someone an independent contractor doesn’t settle the question, and if that worker is hurt the burden falls on you.
What changes on January 1, 2028
SB 216, signed in 2022, requires all licensed contractors and license applicants, regardless of classification, to obtain and maintain workers’ compensation insurance, with limited exceptions. It was set to take effect January 1, 2026.
SB 1455, signed in 2024, postponed that date to January 1, 2028 and directed CSLB to strengthen how it verifies that licensees claiming an exemption really have no employees.
For a contractor who operates alone today on an exemption, that means coverage becomes part of keeping the license active.
What happens if coverage lapses
CSLB requires coverage to be continuous. If your workers’ comp lapses, your license is suspended, and work performed while suspended is treated as unlicensed activity. The suspension lifts once CSLB receives and processes acceptable proof of coverage.
Paying on time, keeping the policy in force through audits, and renewing before expiration protect the license as much as the policy.
How to get ahead of 2028
- Confirm your classifications and whether any already require coverage.
- Check what’s on file with CSLB: a certificate or an exemption.
- Note your license renewal date and start shopping coverage a few months before the first renewal after January 1, 2028.
- Gather payroll records, including owners who work in the field, and what you pay subcontractors.
- Collect subcontractors’ certificates. Uninsured subs are commonly counted as your payroll at audit.
- Bundle the conversation with general liability and your license bond so the certificates match what GCs require.
Six questions will tell you whether the rule reaches you now or in 2028, and here is how I place contractor insurance and bonds.
Common questions
Do I need workers’ comp if I have no employees?
Today, only if you hold C-8, C-20, C-22, C-39 or C-61/D-49 or otherwise can’t qualify for an exemption. Beginning January 1, 2028, the requirement extends to all licensed contractors, with limited exceptions.
Was the all-contractor requirement supposed to start in 2026?
Yes. SB 216 originally set January 1, 2026. SB 1455, signed in 2024, moved it to January 1, 2028.
What happens to my license if my policy is cancelled?
CSLB suspends the license when workers’ comp coverage lapses, and working while suspended is unlicensed activity. The suspension ends once CSLB processes acceptable proof of coverage.
How is contractor workers’ comp priced?
Premium is based on payroll by classification code, adjusted for claims history and other underwriting factors, and actual payroll is checked at audit.
Sources
- CSLB: Workers’ Compensation Requirements
- SB 216 (2022) bill text, California Legislative Information
- Business Insurance: California governor signs bill to delay comp mandate for contractors
- Insurance Journal: WCIRB summarizes 2024 California workers’ comp legislation
General information as of September 2026, not legal advice. Rules, programs and carrier appetite change; confirm current requirements before relying on them. Coverage depends on the terms, conditions and exclusions of the policy actually issued.