SB 291: Contractors: workers’ compensation insurance.
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-10-07
Current Status:
Passed
(2025-10-07: Chaptered by Secretary of State. Chapter 455, Statutes of 2025.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
Existing law requires the board, by no later than January 1, 2027, to establish a process and procedure to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers compensation insurance requirement, and authorizes the process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill would require that verification process or procedure to include an audit, proof, or other means to obtain evidence to verify eligibility for exemption from the workers compensation insurance requirement. The bill would also require the board to report its proposed verification process to the Legislature no later than January 1, 2027.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage, and would make conforming changes. The bill would prohibit the board from renewing or reinstating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
This bill would incorporate additional changes to Section 7099.2 of the Business and Professions Code proposed by SB 779 to be operative only if this bill and SB 779 are enacted and this bill is enacted last.
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
Existing law requires the board, by no later than January 1, 2027, to establish a process and procedure to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers compensation insurance requirement, and authorizes the process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill would require that verification process or procedure to include an audit, proof, or other means to obtain evidence to verify eligibility for exemption from the workers compensation insurance requirement. The bill would also require the board to report its proposed verification process to the Legislature no later than January 1, 2027.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage, and would make conforming changes. The bill would prohibit the board from renewing or reinstating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
This bill would incorporate additional changes to Section 7099.2 of the Business and Professions Code proposed by SB 779 to be operative only if this bill and SB 779 are enacted and this bill is enacted last.
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
Existing law requires the board, by no later than January 1, 2027, to establish a process and procedure to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers compensation insurance requirement, and authorizes the process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill would require that verification process or procedure to include an audit, proof, or other means to obtain evidence to verify eligibility for exemption from the workers compensation insurance requirement. The bill would also require the board to report its proposed verification process to the Legislature no later than January 1, 2027.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage, and would make conforming changes. The bill would prohibit the board from renewing or restating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
This bill would incorporate additional changes to Section 7099.2 of the Business and Professions Code proposed by SB 779 to be operative only if this bill and SB 779 are enacted and this bill is enacted last.
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
Existing law requires the board, by no later than January 1, 2027, to establish a process and procedure to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers compensation insurance requirement, and authorizes the process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill would require that verification process or procedure to include an audit, proof, or other means to obtain evidence to verify eligibility for exemption from the workers compensation insurance requirement. The bill would also require the board to report its proposed verification process to the Legislature no later than January 1, 2027.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage. coverage, and would make conforming changes. The bill would prohibit the board from renewing or restating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
This bill would instead repeal the above-described provisions on January 1, 2027.Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
This bill would, commencing January 1, 2027, instead exempt from the above-described filing requirement an applicant or licensee organized as a joint venture in which all individual licensees that formed the joint venture comply with the above-described filing requirement, and an applicant or licensee that has no employees, does not undertake construction projects valued over a specified amount, as prescribed, and has not been cited or otherwise disciplined by the board, as specified. The bill would require an applicant or licensee exempt pursuant to these provisions to file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified. The bill would specify that the above-described exemptions do not apply to any applicant or licensee that has an active C-39 classification, as specified.Existing law requires the board, by no later than January 1, 2027, to establish a process and procedure to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers compensation insurance requirement, and authorizes the process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill would require that verification process or procedure to include an audit, proof, or other means to obtain evidence to verify eligibility for exemption from the workers compensation insurance requirement. The bill would also require the board to report its proposed verification process to the Legislature no later than January 1, 2027.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage. The bill would prohibit the board from renewing or restating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires all active licensees with an exemption for workers compensation insurance on file with the board, at the time of renewal, to either recertify the licensees exemption by completing a recertification statement on the license renewal form, as provided by the board, or provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.This bill would require the board, on or before January 1, 2027, to develop an open book examination, as specified, and update the license renewal form to include the open book examination and a requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the above-described penalties. The bill would also require specified license applicants exempt from the above-described filing requirement to complete and submit to the board the open book examination before the issuance of a license. The bill would instead require the licensee to recertify the licensees exemption by completing the applicable license renewal form, as provided by the board. By requiring a licensee who completes a license renewal form to provide a statement under penalty of perjury, this bill would expand the crime of perjury and impose a state-mandated local program.Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
This bill would instead repeal the above-described provisions on January 1, 2027.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
This bill would, commencing January 1, 2027, instead exempt from the above-described filing requirement an applicant or licensee organized as a joint venture in which all individual licensees that formed the joint venture comply with the above-described filing requirement, and an applicant or licensee that has no employees, does not undertake construction projects valued over a specified amount, amount, as prescribed, and has not been cited or otherwise disciplined by the board, as specified, provided that they specified. The bill would require an applicant or licensee exempt pursuant to these provisions to file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified. The bill would specify that the above-described exemptions do not apply to any applicant or licensee that has an active C-39 classification, as specified. The bill would require the board to periodically review and consult with the Legislature to amend or adopt regulations to update the construction project value amount described above to account for inflation, as specified.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage. The bill would prohibit the board from renewing or restating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires all active licensees with an exemption for workers compensation insurance on file with the board, at the time of renewal, to either recertify the licensees exemption by completing a recertification statement on the license renewal form, as provided by the board, or provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.
This bill would require the board, on or before January 1, 2027, to develop an open book examination, as specified, and update the license renewal form to include the open book examination and a requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the above-described penalties. The bill would also require specified license applicants exempt from the above-described filing requirement to complete and submit to the board the open book examination before the issuance of a license. The bill would instead require the licensee to recertify the licensees exemption by completing the applicable license renewal form, as provided by the board. By requiring a licensee who completes a license renewal form to provide a statement under penalty of perjury, this bill would expand the crime of perjury and impose a state-mandated local program.
Existing law requires the board to report annually to the Legislature, no later than October 1 of each year, certain statistical information for the prior fiscal year, including, among other things, the number of disciplinary actions taken by the board categorized by type, as specified, and by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
This bill would require that the report specify the number of disciplinary actions for violations of specified provisions relating to the filing of a workers compensation insurance exemption certificate or a certification of self-insurance.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law authorizes the board to appoint committees and make rules and regulations, as specified.
Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, a licensed contractor or applicant for licensure to have on file at all times with the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name, as specified. Existing law generally makes a violation of these provisions a misdemeanor. Existing law exempts from this requirement an applicant or licensee who has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified, and who does not hold a specified license issued by the board, including a C-8 license, as defined. Existing law repeals these provisions on January 1, 2028.
This bill would instead repeal the above-described provisions on January 1, 2027.
Existing law, commencing January 1, 2028, removes the above-specified exemptions, and instead exempts from the above-described filing requirement an applicant or licensee organized as a joint venture that has no employees, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified.
This bill would, commencing January 1, 2027, instead exempt from the above-described filing requirement an applicant or licensee organized as a joint venture in which all individual licensees that formed the joint venture comply with the above-described filing requirement, and an applicant or licensee that has no employees, does not undertake construction projects valued over a specified amount, and has not been cited or otherwise disciplined by the board, as specified, provided that they file a statement with the board before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that they do not employ any person, as specified. The bill would specify that the above-described exemptions do not apply to any applicant or licensee that has an active C-39 classification, as specified. The bill would require the board to periodically review and consult with the Legislature to amend or adopt regulations to update the construction project value amount described above to account for inflation, as specified.
Existing law makes the filing of an exemption certificate for workers compensation insurance on file with the board that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with specified provisions or without maintaining coverage for that person, cause for disciplinary action.
This bill would include as disciplinary action, among other penalties, a minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage. The bill would prohibit the board from renewing or restating a license subject to the above-described disciplinary action until the applicant or licensee provides the board a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
Existing law requires all active licensees with an exemption for workers compensation insurance on file with the board, at the time of renewal, to either recertify the licensees exemption by completing a recertification statement on the license renewal form, as provided by the board, or provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.
This bill would require the board, on or before January 1, 2027, to develop an open book examination, as specified, and update the license renewal form to include the open book examination and a requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the above-described penalties. The bill would instead require the licensee to recertify the licensees exemption by completing the applicable license renewal form, as provided by the board. By requiring a licensee who completes a license renewal form to provide a statement under penalty of perjury, this bill would expand the crime of perjury and impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SEC. 2.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, or 7118.
SEC. 2.1.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, or 7118.
(c)This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
SEC. 2.2.Section 7099.2 is added to the Business and Professions Code, to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)(1)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall be assessed in an amount not less than five hundred dollars ($500) nor greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty shall be assessed in an amount not less than one thousand five hundred dollars ($1,500) nor greater than thirty thousand dollars ($30,000) for a violation of Section 7110, 7114, or 7118.
(2)The board may adjust all minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded as follows:
(A)In multiples of one hundred dollars ($100) for penalties greater than one hundred dollars ($100) but less than or equal to one thousand dollars ($1,000).
(B)In multiples of one thousand dollars ($1,000) for penalties greater than one thousand dollars ($1,000).
(c)This section shall become operative on July 1, 2026.
SEC. 3.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 4.Section 7125.7 of the Business and Professions Code is amended to read:7125.7.(a)By no later than January 1, 2027, the board shall establish a process and procedure, which shall include an audit, proof, or other means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers compensation insurance requirement pursuant to Section 7125. The board shall report its proposed verification process to the Legislature no later than January 1, 2027.
(b)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Sections 2.1 and 2.2 of this bill incorporate amendments to Section 7099.2 of the Business and Professions Code proposed by both this bill and Senate Bill 779. Those sections of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) this bill amends Section 7099.2 of the Business and Professions Code and Senate Bill 779 amends, repeals, and adds Section 7099.2 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 779, in which case Section 2 of this bill and Section 4 of Senate Bill 779 shall not become operative.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SEC. 2.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, or 7118.
SEC. 2.1.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, or 7118.
(c)This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
SEC. 2.2.Section 7099.2 is added to the Business and Professions Code, to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)(1)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall be assessed in an amount not less than five hundred dollars ($500) nor greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty shall be assessed in an amount not less than one thousand five hundred dollars ($1,500) nor greater than thirty thousand dollars ($30,000) for a violation of Section 7110, 7114, or 7118.
(2)The board may adjust all minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded as follows:
(A)In multiples of one hundred dollars ($100) for penalties greater than one hundred dollars ($100) but less than or equal to one thousand dollars ($1,000).
(B)In multiples of one thousand dollars ($1,000) for penalties greater than one thousand dollars ($1,000).
(c)This section shall become operative on July 1, 2026.
SEC. 3.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 4.Section 7125.7 of the Business and Professions Code is amended to read:7125.7.(a)By no later than January 1, 2027, the board shall establish a process and procedure, which shall include an audit, proof, or other means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers compensation insurance requirement pursuant to Section 7125. The board shall report its proposed verification process to the Legislature no later than January 1, 2027.
(b)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Sections 2.1 and 2.2 of this bill incorporate amendments to Section 7099.2 of the Business and Professions Code proposed by both this bill and Senate Bill 779. Those sections of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) this bill amends Section 7099.2 of the Business and Professions Code and Senate Bill 779 amends, repeals, and adds Section 7099.2 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 779, in which case Section 2 of this bill and Section 4 of Senate Bill 779 shall not become operative.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SEC. 2.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, or 7118.
SEC. 2.1.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, 7118, or 7125.4 or 7118.
(c)This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
SEC. 2.2.Section 7099.2 is added to the Business and Professions Code, to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)(1)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall be assessed in an amount not less than five hundred dollars ($500) nor greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty shall be assessed in an amount not less than one thousand five hundred dollars ($1,500) nor greater than thirty thousand dollars ($30,000) for a violation of Section 7110, 7114, or 7118.
(2)The board may adjust all minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded as follows:
(A)In multiples of one hundred dollars ($100) for penalties greater than one hundred dollars ($100) but less than or equal to one thousand dollars ($1,000).
(B)In multiples of one thousand dollars ($1,000) for penalties greater than one thousand dollars ($1,000).
(c)This section shall become operative on July 1, 2026.
SEC. 3.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 4.Section 7125.7 of the Business and Professions Code is amended to read:7125.7.(a)By no later than January 1, 2027, the board shall establish a process and procedure, which shall include an audit, proof, or other means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers compensation insurance requirement pursuant to Section 7125. The board shall report its proposed verification process to the Legislature no later than January 1, 2027.
(b)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Sections 2.1 and 2.2 of this bill incorporate amendments to Section 7099.2 of the Business and Professions Code proposed by both this bill and Senate Bill 779. Those sections of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) this bill amends Section 7099.2 of the Business and Professions Code and Senate Bill 779 amends, repeals, and adds Section 7099.2 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 779, in which case Section 2 of this bill and Section 4 of Senate Bill 779 shall not become operative.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SEC. 2.Section 7099.2 of the Business and Professions Code is amended to read:7099.2.(a)The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1)The gravity of the violation.
(2)The good faith of the licensee or applicant for licensure being charged.
(3)The history of previous violations.
(b)Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, 7118, or 7125.4 or 7118.
SEC. 2.SEC. 3.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 3.SEC. 4.Section 7125.7 of the Business and Professions Code is amended to read:7125.7.(a)By no later than January 1, 2027, the board shall establish a process and procedure, which shall include an audit, proof, or other means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers compensation insurance requirement pursuant to Section 7125. The board shall report its proposed verification process to the Legislature no later than January 1, 2027.
(b)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SEC. 2.Section 7125 of the Business and Professions Code, as amended by Section 12 of Chapter 485 of the Statutes of 2024, is amended to read:7125.(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.(b)This section does not apply to an applicant or licensee who meets both of the following conditions:(1)Has no employees provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law.(2)Does not hold a C-8 license, as defined in Section 832.08 of Title 16 of the California Code of Regulations, a C-20 license, as defined in Section 832.20 of Title 16 of the California Code of Regulations, a C-22 license, as defined in Section 832.22 of Title 16 of the California Code of Regulations, a C-39 license, as defined in Section 832.39 of Title 16 of the California Code of Regulations, or a D-49 license, a subcategory of a C-61 license, as defined in Section 832.61 of Title 16 of the California Code of Regulations.(c)This section does not apply to an applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files the statement prescribed by subparagraph (1) of subdivision (b).(d)A Certificate of Workers Compensation Insurance, Certification of Self-Insurance, or exemption certificate is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.(e)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:(A)The insurer has completed a premium audit or investigation.(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.(C)No reimbursement has been paid by the insured to the insurer.(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.(f)(1)For any license that, on January 1, 2013, is active and includes a C-39 classification in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-39 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.(2)For any licensee whose license, after January 1, 2013, is active and has had the C-39 classification removed as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.(g)(1)For any licensee whose license, after July 1, 2023, is active and includes a C-8, C-20, C-22, or D-49 classification, in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-8, C-20, C-22, or D-49 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.(2)For any licensee whose license, after July 1, 2023, is active and has had the C-8, C-20, C-22, or D-49 classification removed, as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.(h)The information reported pursuant to paragraph (2) of subdivision (e) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).(i)This section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2027, deletes or extends that date.SEC. 3.Section 7125 of the Business and Professions Code, as amended by Section 13 of Chapter 485 of the Statutes of 2024, is amended to read:7125.(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.(b)(1)This section does not apply to either of the following:(A)An applicant or licensee organized as a joint venture pursuant to Section 7029 in which all individual licensees that formed the joint venture comply with the filing requirement of this section.(B)(i)An applicant or licensee that has no employees, does not undertake construction projects valued over two thousand dollars ($2,000) for labor and materials, and has not been cited or otherwise disciplined by the board previously for failure to maintain a Certificate of Workers Compensation Insurance or Certification of Self-Insurance. The two-thousand-dollar ($2,000) valuation described in this clause shall apply to a single work or operation and shall not be circumvented by division of contracts of amounts less than two thousand dollars ($2,000) for purpose of evasion of this paragraph or otherwise.(ii)An applicant described in clause (i) shall complete and submit to the board the open book examination described in section 7125.5 before the issuance of a license.(2)Paragraph (1) does not apply to any applicant or licensee that has an active C-39 classification, either solely or in addition to any other classification, issued by the board.(3)An applicant or licensee described in paragraph (1) shall file a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws or is not otherwise required to provide for workers compensation insurance coverage under state law.(c)A Certificate of Workers Compensation Insurance or Certification of Self-Insurance is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.(d)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:(A)The insurer has completed a premium audit or investigation.(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.(C)Reimbursement has not been paid by the insured to the insurer.(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.(e)The information reported pursuant to paragraph (2) of subdivision (d) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).(f)This section shall become operative on January 1, 2027.SEC. 4.SEC. 2.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 5.Section 7125.5 of the Business and Professions Code is amended to read:7125.5.(a)(1)At the time of renewal, all active licensees with an exemption for workers compensation insurance on file with the board, submitted pursuant to subdivision (b) of Section 7125, shall do either of the following:(A)Recertify the licensees exemption by completing the applicable license renewal form, as provided by the board.(B)Provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.(2)The board shall, on or before January 1, 2027, complete both of the following:(A)The board shall develop an open book examination that includes questions regarding workers compensation laws and regulations and requires the licensee to answer those questions correctly.(B)The board shall update the license renewal form to include both of the following:(i)The open book examination, as described in subparagraph (A).(ii)A requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the penalties described in Section 7125.4.(b)The license shall not be renewed unless a licensee with an exemption for workers compensation insurance on file with the board recertifies the exemption status or provides a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance in conjunction with the license renewal.(c)If the documentation required by subdivision (a) is not provided with the license renewal but is received within 30 days after notification by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the date of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason after 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision.SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.SEC. 3.Section 7125.7 of the Business and Professions Code is amended to read:7125.7.(a)By no later than January 1, 2027, the board shall establish a process and procedure, which may shall include an audit, proof, or other means, means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers compensation insurance requirement pursuant to Section 7125. The board shall report its proposed verification process to the Legislature no later than January 1, 2027.
(b)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on January 1, 2030, pursuant to Section 10231.5 of the Government Code.
(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
The Contractors State License Board shall report annually to the Legislature, not later than October 1 of each year, the following statistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed contractors, registered home improvement salespersons, and unlicensed persons acting as licensees or registrants:
(a)The number of complaints received by the board categorized by source, such as public, trade, profession, government agency, or board-initiated, and by type of complaint, such as licensee or nonlicensee.
(b)The number of complaints closed prior to referral for field investigation, categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(c)The number of complaints referred for field investigation categorized by the type of complaint, such as licensee or nonlicensee.
(d)The number of complaints closed after referral for field investigation categorized by the reason for the closure, such as settled, referred for mandatory arbitration, or referred for voluntary arbitration.
(e)For the boards Intake/Mediation Center and the boards Investigation Center closures, respectively, the total number of complaints closed prior to a field investigation per consumer services representative, and the total number of complaints closed after referral for a field investigation per investigator and special investigator. Additionally, the board shall report the total number of complaints closed by other board staff during the year.
(f)The number of complaints pending at the end of the fiscal year grouped in 90-day increments, and the percentage of total complaints pending, represented by the number of complaints in each grouping.
(g)The number of citations issued to licensees categorized by the type of citation such as order of correction only or order of correction and fine, and the number of citations issued to licensees that were vacated or withdrawn.
(h)The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn.
(i)The number of complaints referred to a local prosecutor for criminal investigation or prosecution, the number of complaints referred to the Attorney General for the filing of an accusation, and the number of complaints referred to both a local prosecutor and the Attorney General, categorized by type of complaint, such as licensee and nonlicensee.
(j)Actions taken by the board, including, but not limited to, the following:
(1)(A)The number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
(B)The number of disciplinary actions described in subparagraph (A) shall specify the number of disciplinary actions for violations of Section 7125.4.
(2)The number of accusations dismissed or withdrawn.
(k)For subdivisions (g) and (j), the number of cases containing violations of Sections 7121 and 7121.5, and paragraph (5) of subdivision (a) of Section 7159.5, categorized by section.
(l)The number of interim suspension orders sought, the number of interim suspension orders granted, the number of temporary restraining orders sought, and the number of temporary restraining orders granted.
(m)The amount of cost recovery ordered and the amount collected.
(n)Case aging data, including data for each major stage of the enforcement process, including the following:
(1)The average number of days from the filing of a complaint to its closure by the boards Intake/Mediation Center prior to the referral for an investigation categorized by the type of complaint, such as licensee or nonlicensee.
(2)The average number of days from the referral of a complaint for an investigation to its closure by the Investigation Center categorized by the type of complaint, such as licensee or nonlicensee.
(3)The average number of days from the filing of a complaint to the referral of the completed investigation to the Attorney General.
(4)The average number of days from the referral of a completed investigation to the Attorney General to the filing of an accusation by the Attorney General.
(5)The average number of days from the filing of an accusation to the first hearing date or date of a stipulated settlement.
(6)The average number of days from the receipt of the administrative law judges proposed decision to the registrars final decision.
SECTION 1.SEC. 2.Section 7125 of the Business and Professions Code, as amended by Section 12 of Chapter 485 of the Statutes of 2024, is amended to read:7125.(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)This section does not apply to an applicant or licensee who meets both of the following conditions:
(1)Has no employees provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law.
(2)Does not hold a C-8 license, as defined in Section 832.08 of Title 16 of the California Code of Regulations, a C-20 license, as defined in Section 832.20 of Title 16 of the California Code of Regulations, a C-22 license, as defined in Section 832.22 of Title 16 of the California Code of Regulations, a C-39 license, as defined in Section 832.39 of Title 16 of the California Code of Regulations, or a D-49 license, a subcategory of a C-61 license, as defined in Section 832.61 of Title 16 of the California Code of Regulations.
(c)This section does not apply to an applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files the statement prescribed by subparagraph (1) of subdivision (b).
(d)A Certificate of Workers Compensation Insurance, Certification of Self-Insurance, or exemption certificate is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(e)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)The insurer has completed a premium audit or investigation.
(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)No reimbursement has been paid by the insured to the insurer.
(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(f)(1)For any license that, on January 1, 2013, is active and includes a C-39 classification in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-39 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)For any licensee whose license, after January 1, 2013, is active and has had the C-39 classification removed as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(g)(1)For any licensee whose license, after July 1, 2023, is active and includes a C-8, C-20, C-22, or D-49 classification, in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-8, C-20, C-22, or D-49 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)For any licensee whose license, after July 1, 2023, is active and has had the C-8, C-20, C-22, or D-49 classification removed, as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(h)The information reported pursuant to paragraph (2) of subdivision (e) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(i)This section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2027, deletes or extends that date.
SEC. 2.SEC. 3.Section 7125 of the Business and Professions Code, as amended by Section 13 of Chapter 485 of the Statutes of 2024, is amended to read:7125.(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)(1)This section does not apply to either of the following:
(A)An applicant or licensee organized as a joint venture pursuant to Section 7029 in which all individual licensees that formed the joint venture comply with the filing requirement of this section.
(B)(i)An applicant or licensee that has no employees, does not undertake construction projects valued over two thousand dollars ($2,000) for labor and materials, and has not been cited or otherwise disciplined by the board previously for failure to maintain a Certificate of Workers Compensation Insurance or Certification of Self-Insurance, provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law. Self-Insurance. The two-thousand-dollar ($2,000) valuation described in this clause shall apply to a single work or operation and shall not be circumvented by division of contracts of amounts less than two thousand dollars ($2,000) for purpose of evasion of this paragraph or otherwise.
(ii)An applicant described in clause (i) shall complete and submit to the board the open book examination described in section 7125.5 before the issuance of a license.
(2)Paragraph (1) does not apply to any applicant or licensee that has an active C-39 classification, either solely or in addition to any other classification, issued by the board.
(3)An applicant or licensee described in paragraph (1) shall file a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws or is not otherwise required to provide for workers compensation insurance coverage under state law.
(c)A Certificate of Workers Compensation Insurance or Certification of Self-Insurance is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(d)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)The insurer has completed a premium audit or investigation.
(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)Reimbursement has not been paid by the insured to the insurer.
(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(e)The information reported pursuant to paragraph (2) of subdivision (d) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(f)(1)The board shall periodically review and consult with the Legislature to amend or adopt regulations to update the construction project value amount for labor and materials described in subdivision (b) to account for inflation.(2)Any construction project value amount for labor and materials amount updated pursuant to paragraph (1) shall supersede the amount described in subdivision (b). (g)(f)This section shall become operative on January 1, 2027.
SEC. 3.SEC. 4.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 4.SEC. 5.Section 7125.5 of the Business and Professions Code is amended to read:7125.5.(a)(1)At the time of renewal, all active licensees with an exemption for workers compensation insurance on file with the board, submitted pursuant to subdivision (b) of Section 7125, shall do either of the following:
(A)Recertify the licensees exemption by completing the applicable license renewal form, as provided by the board.
(B)Provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.
(2)The board shall, on or before January 1, 2027, complete both of the following:
(A)The board shall develop an open book examination that includes questions regarding workers compensation laws and regulations and requires the licensee to answer those questions correctly.
(B)The board shall update the license renewal form to include both of the following:
(i)The open book examination, as described in subparagraph (A).
(ii)A requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the penalties described in Section 7125.4.
(b)The license shall not be renewed unless a licensee with an exemption for workers compensation insurance on file with the board recertifies the exemption status or provides a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance in conjunction with the license renewal.
(c)If the documentation required by subdivision (a) is not provided with the license renewal but is received within 30 days after notification by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the date of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason after 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision.
SEC. 5.SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)This section does not apply to an applicant or licensee who meets both of the following conditions:
(1)Has no employees provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law.
(2)Does not hold a C-8 license, as defined in Section 832.08 of Title 16 of the California Code of Regulations, a C-20 license, as defined in Section 832.20 of Title 16 of the California Code of Regulations, a C-22 license, as defined in Section 832.22 of Title 16 of the California Code of Regulations, a C-39 license, as defined in Section 832.39 of Title 16 of the California Code of Regulations, or a D-49 license, a subcategory of a C-61 license, as defined in Section 832.61 of Title 16 of the California Code of Regulations.
(c)This section does not apply to an applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files the statement prescribed by subparagraph (1) of subdivision (b).
(d)A Certificate of Workers Compensation Insurance, Certification of Self-Insurance, or exemption certificate is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(e)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)The insurer has completed a premium audit or investigation.
(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)No reimbursement has been paid by the insured to the insurer.
(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(f)(1)For any license that, on January 1, 2013, is active and includes a C-39 classification in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-39 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)For any licensee whose license, after January 1, 2013, is active and has had the C-39 classification removed as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(g)(1)For any licensee whose license, after July 1, 2023, is active and includes a C-8, C-20, C-22, or D-49 classification, in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-8, C-20, C-22, or D-49 classification from the license unless a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)For any licensee whose license, after July 1, 2023, is active and has had the C-8, C-20, C-22, or D-49 classification removed, as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(h)The information reported pursuant to paragraph (2) of subdivision (e) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(i)This section shall remain in effect only until January 1, 2028, 2027, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2028, 2027, deletes or extends that date.
SEC. 2.Section 7125 of the Business and Professions Code, as amended by Section 13 of Chapter 485 of the Statutes of 2024, is amended to read:7125.(a)Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name. A Certificate of Workers Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)(1)This section does not apply to an either of the following:
(A)An applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law. in which all individual licensees that formed the joint venture comply with the filing requirement of this section.
(B)An applicant or licensee that has no employees, does not undertake construction projects valued over two thousand dollars ($2,000) for labor and materials, and has not been cited or otherwise disciplined by the board previously for failure to maintain a Certificate of Workers Compensation Insurance or Certification of Self-Insurance, provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers compensation laws of California or is not otherwise required to provide for workers compensation insurance coverage under California law.
(2)Paragraph (1) does not apply to any applicant or licensee that has an active C-39 classification, either solely or in addition to any other classification, issued by the board.
(c)A Certificate of Workers Compensation Insurance or Certification of Self-Insurance is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(d)(1)The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)A workers compensation insurer shall also report to the registrar a licensee whose workers compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)The insurer has completed a premium audit or investigation.
(B)A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)Reimbursement has not been paid by the insured to the insurer.
(3)Willful or deliberate disregard and violation of workers compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(e)The information reported pursuant to paragraph (2) of subdivision (d) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(f)(1)The board shall periodically review and consult with the Legislature to amend or adopt regulations to update the construction project value amount for labor and materials described in subdivision (b) to account for inflation.
(2)Any construction project value amount for labor and materials amount updated pursuant to paragraph (1) shall supersede the amount described in subdivision (b).
(f)(g)This section shall become operative on January 1, 2028. 2027.
SEC. 3.Section 7125.4 of the Business and Professions Code is amended to read:7125.4.(a)The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action. action, including, but not limited to, the following civil penalties:
(1)A minimum civil penalty of ten thousand dollars ($10,000) per violation for any sole owner licensee found to have employed workers without maintaining workers compensation coverage.
(2)A minimum civil penalty of twenty thousand dollars ($20,000) per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers compensation coverage.
(3)Additional civil penalties for any subsequent violations, not to exceed a total of thirty thousand dollars ($30,000) per occurrence.
(b)Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.
(c)The board shall not renew or reinstate a license in violation of this section until the applicant or licensee provides the board with a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicants or licensees business name.
SEC. 4.Section 7125.5 of the Business and Professions Code is amended to read:7125.5.(a)(1)At the time of renewal, all active licensees with an exemption for workers compensation insurance on file with the board, submitted pursuant to subdivision (b) of Section 7125, shall either recertify do either of the following:
(A)Recertify the licensees exemption by completing a recertification statement on the the applicable license renewal form, as provided by the board, or shall provide board.
(B)Provide a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.
(2)The board shall, on or before January 1, 2027, complete both of the following:
(A)The board shall develop an open book examination that includes questions regarding workers compensation laws and regulations and requires the licensee to answer those questions correctly.
(B)The board shall update the license renewal form to include both of the following:
(i)The open book examination, as described in subparagraph (A).
(ii)A requirement that the licensee state under penalty of perjury that they do not have employees and that they understand the penalties described in Section 7125.4.
(b)The license shall not be renewed unless a licensee with an exemption for workers compensation insurance on file with the board recertifies the exemption status or provides a current and valid Certificate of Workers Compensation Insurance or Certificate of Self-Insurance in conjunction with the license renewal.
(c)If the documentation required by subdivision (a) is not provided with the license renewal but is received within 30 days after notification by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the date of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason after 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Oct 7, 2025 | Chaptered by Secretary of State. Chapter 455, Statutes of 2025. |
| Oct 7, 2025 | Approved by the Governor. |
| Sep 16, 2025 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 9, 2025 | Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2740.) Ordered to engrossing and enrolling. |
| Sep 8, 2025 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 8, 2025 | Read third time. Passed. (Ayes 79. Noes 0. Page 2990.) Ordered to the Senate. |
| Sep 4, 2025 | Read third time and amended. |
| Sep 4, 2025 | Ordered to third reading. |
| Sep 2, 2025 | Read second time. Ordered to third reading. |
| Aug 29, 2025 | From committee: Do pass. (Ayes 15. Noes 0.) (August 29). |
| Aug 20, 2025 | August 20 set for first hearing. Placed on APPR. suspense file. |
| Jul 16, 2025 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 17. Noes 0.) (July 16). Re-referred to Com. on APPR. |
| Jun 24, 2025 | From committee: Do pass and re-refer to Com. on INS. with recommendation: To consent calendar. (Ayes 16. Noes 0.) (June 24). Re-referred to Com. on INS. |
| Jun 5, 2025 | Referred to Coms. on B. & P. and INS. |
| May 28, 2025 | In Assembly. Read first time. Held at Desk. |
| May 28, 2025 | Read third time. Passed. (Ayes 35. Noes 0. Page 1285.) Ordered to the Assembly. |
| May 13, 2025 | Read second time. Ordered to third reading. |
| May 12, 2025 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| May 6, 2025 | Set for hearing May 12. |
| May 1, 2025 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 30, 2025 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 13. Noes 0. Page 938.) (April 29). |
| Apr 22, 2025 | Set for hearing April 29. |
| Apr 22, 2025 | Read second time and amended. Re-referred to Com. on JUD. |
| Apr 21, 2025 | From committee: Do pass as amended and re-refer to Com. on JUD. (Ayes 11. Noes 0. Page 808.) (April 21). |
| Apr 17, 2025 | Set for hearing April 21. |
| Apr 3, 2025 | April 7 hearing postponed by committee. |
| Apr 1, 2025 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. P. & E.D. |
| Mar 18, 2025 | Set for hearing April 7. |
| Feb 19, 2025 | Referred to Coms. on B. P. & E.D. and JUD. |
| Feb 7, 2025 | From printer. May be acted upon on or after March 9. |
| Feb 6, 2025 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 9, 2025 | Unfinished Business SB291 Grayson Concurrence | Senate Floor |
Passed |
|
| Sep 8, 2025 | SB 291 Grayson Senate Third Reading By Carrillo | Assembly Floor |
Passed |
|
| Aug 29, 2025 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 16, 2025 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Insurance |
Passed |
|
| Jun 24, 2025 | Do pass and be re-referred to the Committee on [Insurance] with recommendation: To Consent Calendar | Assembly Standing Committee on Business and Professions |
Passed |
|
| May 28, 2025 | Senate 3rd Reading SB291 Grayson | Senate Floor |
Passed |
|
| Apr 29, 2025 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Judiciary |
Passed |
|
| Apr 21, 2025 | Do pass as amended, but first amend, and re-refer to the Committee on [Judiciary] | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Associated Builders And Contractors Of California | ** Support | |
| Associated General Contractors, California Chapters | ** Support | |
| Contractors State License Board | ** Support | |
| Western Electrical Contractors Association | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 291 |
UNFINISHED BUSINESS
Bill No: SB 291
Author: Grayson (D)
Amended: 9/4/25 in Assembly
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 11-0, 4/21/25
AYES: Ashby, Choi, Archuleta, Arreguín, Grayson, Niello, Richardson, Smallwood-Cuevas, Strickland, Umberg, Weber Pierson
SENATE JUDICIARY COMMITTEE: 13-0, 4/29/25
AYES: Umberg, Niello, Allen, Arreguín, Ashby, Caballero, Durazo, Laird, Stern, Valladares, Wahab, Weber Pierson, Wiener
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 35-0, 5/28/25
AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Hurtado, Laird, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
NO VOTE RECORDED: Cervantes, Grove, Jones, Limón, Reyes
ASSEMBLY FLOOR: 79-0, 9/8/25 - See last page for vote
SUBJECT: Contractors: workers’ compensation insurance
SOURCE: Contractors State License Board
DIGEST:
This bill (1) requires the Contractors State License Board (CSLB) to report statistical data on violations of workers’ compensation coverage requirements; (2) increases the civil penalty amount for violating workers’ compensation coverage requirements; and, (3) requires the CSLB to provide a process to verify exemption eligibility for workers’ compensation coverage by January 1, 2027, as specified.
Assembly Amendments
Add language to resolve a chaptering conflict with SB 779 (Archuleta).
ANALYSIS:
Existing law:
- Establishes the CSLB under the jurisdiction of the Department of Consumer Affairs to license and regulate contractors and home improvement salespersons (HIS), and sunsets the CSLB on January 1, 2029, and its authority to appoint a registrar. (Business and Professions Code (BPC) § 7000 et seq.)
- Requires the CSLB to provide an annual report to the Legislature, no later than October 1, related to complaints filed with the CSLB, as specified.
- Exempts from the for an applicant/licensee to have workers’ compensation insurance, as specified, if the applicant or licensee meets both of the following, until January 1, 2028:
- Has no employees provided that the applicant or licensee files a statement with the CSLB on a form prescribed by the registrar certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers’ compensation insurance coverage under California law; or,
- Does not hold a C-8, C-20, C-22, C-39, D-49, or subcategory of a C-61 license, as specified, (BPC § 7125(b))
- Requires, beginning January 1, 2028, as a condition precedent to the issuance, reinstatement, reactivation, renewal or continued maintenance of a contractor license, the applicant to have on file at all times a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant’s or licensee’s business name, regardless of license classification as specified. (BPC § 7125(a) operative on January 1, 2028)
- Requires the CSLB, by no later than January 1, 2027, to establish a process and procedure which may include an audit, proof, or other means to verify that an applicant or licensee without an employee or employees is eligible for an exemption from the requirement to obtain workers’ compensation insurance as a condition of licensure. (BPC § 7125.7)
This bill:
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for violating workers’ compensation requirements, as specified.
- Increases the civil penalty amounts for violating workers’ compensation requirements, as specified.
- Requires the CSLB to provide a report to the Legislature of its proposed verification process for workers’ compensation exemptions by January 1, 2027.
- Adds language to address a chaptering conflict.
Background
Contractors State License Board. The CSLB is responsible for the licensure and regulation of the contracting profession along with the registration of home improvement salespersons. All businesses and individuals who by themselves or through others construct, alter, or repair, or offer to construct, alter, or repair, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost, including both labor and materials of one or more contracts on the project is $1,000 or more. The CSLB issues four distinct license types within three branches of contracting services. Each license classification specifies the type of contracting work that may be commenced. A licensee may not work outside of the scope of the classification in which they hold the license.
Annually, no later than October 1, the CSLB is required to provide a report to the Legislature providing statistical information about complaints received by the CSLB. The report includes data about where the complaint originated (public complaint, industry complaint, government agency, etc.); number of complaints referred for field investigations; number of complaints referred to local prosecution; complaints referred to the Attorney General; number of citations issued categorized by the type of citations such as was it an order of correction only or an order of correction and a fine; the number of citations issued to licensees that were vacated or withdrawn; and the number of disciplinary actions categorized by type- revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award, among others. The current report from the CSLB to the Legislature is not required to provide specific data points on the number of complaints or disciplinary actions related to workers’ compensation violations. This bill will update the CSLB’s report to include the number of disciplinary actions for violations of workers’ compensation requirements.
Workers’ Compensation and Licensure History. In California, all employers are required to have workers’ compensation insurance to pay for workers’ compensation benefits for workers who experience work-related injury or illness. Workers’ compensation coverage is important to protect workers in the event of an on-the-job injury. The CSLB does not determine the coverage amount that is required for an entity to obtain workers’ compensation insurance. As part of the licensure and renewal process, the CSLB simply verifies that the applicant or licensee has the required workers’ compensation insurance on file. There are five basic types of workers’ compensation benefits that include medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits. Injured workers may be entitled to one or more of these benefits. The construction industry, as a whole, is often noted as one of the industries at risk for worker injury. Employers may purchase workers’ compensation insurance from a licensed insurance company or through the State Compensation Insurance Fund. Self-insurance is also an option but requires state approval, a minimum net worth of $5 million, net income of $500,000 annually, and posting of a security deposit. As a condition of initial licensure and to maintain an active license, all license classifications are required to have on file with the CSLB, a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance from the Department of Industrial Relations in the applicant’s or licensee’s business name, unless they qualify for an exemption by certifying to the CSLB that they do not have any employees and do not hold a C-39 roofing license, a C-8 (Concrete) D-49 (Tree Service) and C-20 (Warm-Air Heating, Ventilating or Air-Conditioning) license (BPC § 7125(b)), as those license classifications are currently ineligible to self-certify that they do not have employees. There have been longstanding issues within the contracting profession in California regarding the workers’ compensation coverage requirements.
To address concerns that some applicants or licensees were providing a certification of exemption even though they had employees, SB 216 (Dodd, Chapter 978, Statues of 2022) expanded the license classifications required to have a Certificate of Workers’ Compensation Insurance on file with the CSLB to include the (C-8 Concrete), (C-20 HVAC), (C-22 Asbestos Abatement), and (D-49 Tree Service), regardless if the contractor has employees, effective January 1, 2023, and additionally required all licensing classifications (regardless of employee status) obtain workers’ compensation beginning January 1, 2026. Prior to the passage of SB 216, only a C-39 Roofing contractor was required to have workers’ compensation insurance regardless of employees.
SB 1455 and Sunset Review. The CSLB is subject to the joint sunset oversight review process. In December of 2023, the CSLB submitted its required sunset review report to this committee along with the Assembly Committee on Business and Professions. That reported noted significant challenges stemming from the implementation of SB 216. The report highlighted concerns that the implementation of SB 216 would have had a greater impact on CSLB’s workload than anticipated and could potentially increase license processing times.
As a result of the concern raised with respect to those potential licensees who may qualify for an exemption and to address the administrative workload impacts from the CSLB, SB 1455 (Ashby, Chapter 485, Statutes of 2024) paused the requirement for all licensees to have workers’ compensation coverage, regardless on employee status by January 1, 2026, and instead delayed implementation of the requirement until January 1, 2028, and additionally required the CSLB to establish a process, no later than January 1, 2027, to verify through and audit or other means that a contractor applicant or licensee may not have employees. This bill additionally reaffirms the Legislature’s mandate for the CSLB to establish a process to verify that a licensee or applicant who states that they do not have any employees no later than January 1, 2027.
Under current law, BPC § 7126 specifically states that any licensee or agent thereof, who violates the workers’ compensation requirements, under existing law, is guilty of a misdemeanor. This bill adds new civil penalties for a violation of the requirement to have workers’ compensation insurance for those applicants and licensees who have employees in addition the current misdemeanor penalties. The civil penalties range between $10,000 and $30,000 depending on the license type and the number of violations received.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Assembly Committee on Appropriations, CSLB indicates its licensing division estimates approximately 120 hours to develop and report to Legislature the verification process and CSLB’s Information Technology department estimates approximately 1,000 hours for custom programming to implement the exemption verification change and to make changes to the website.
The bill will result in possible increased penalty revenue of an unknown amount, potentially in the mid-hundreds of thousands of dollars annually to the extent this legislation results in higher civil penalties collected. The Committee notes that “Although hard to predict, to the extent the bill does not deter violators or cause contractors to stop paying to maintain a license, continued violations could result in significant penalty revenue increases to CSLB. For context, CSLB reported that between January 2018 and March 2020 it issued 500 stop-work orders to licensed contractors on job sites for failing to secure workers’ compensation and took 342 legal actions against licensed contractors for workers’ compensation insurance violations.”
SUPPORT: (Verified 9/8/25)
Contractors State License Board (source)
Associated Builders and Contractors of California
Western Electrical Contractors Association
OPPOSITION: (Verified 9/8/25)
None received
ARGUMENTS IN SUPPORT: Supporters note generally their support to address concerns and issues related to workers’ compensation requirements for licensed contractors.
ASSEMBLY FLOOR: 79-0, 9/8/25
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
NO VOTE RECORDED: Nguyen
Prepared by: Elissa Silva / B., P. & E.D. / 916-651-4104
9/8/25 19:36:12
**** END ****
SENATE THIRD READING
STR Bill Id:SB 291
Author:(Grayson)
As Amended Ver:September 4, 2025
Majority vote
SUMMARY
Strengthens enforcement of workers' compensation insurance requirements for contractors licensed by the Contractors State License Board (CSLB).
Major Provisions
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for workers' compensation insurance violations.
- Establishes minimum civil penalties for workers' compensation insurance violations:
- Prohibits the CSLB from renewing or reinstating a license in violation of workers' compensation insurance requirements until the applicant or licensee provides the CSLB with a current and valid Certificate of Workers' Compensation Insurance or Certification of Self-Insurance in the applicant's or licensee's business name.
- Requires the CSLB to report its proposed process for verifying that an applicant or licensee without employees is eligible for exemption from the workers' compensation insurance requirement to the Legislature by January 1, 2027, as specified.
COMMENTS
Workers' Compensation Insurance. The License Law, which governs contractors in California and is enforced by the CSLB, requires contractors to have workers' compensation insurance if they have employees. Contractors are required to submit to CSLB a valid Certificate of Workers' Compensation Insurance, a valid Certification of Self-Insurance from the Department of Industrial Relations, or a Certificate of Exemption. Contractors without employees may file an exemption–except for those holding C-8 (Concrete), C-20 (Heating, Ventilation, and Air Conditioning), C-22 (Asbestos Abatement), and D-49 (Tree Service) licenses. Filing a false workers' compensation insurance exemption is cause for disciplinary action by the CSLB and cancellation of the false exemption, which subjects the license to suspension. This bill would prohibit the CSLB from renewing or reinstating a contractor's license until they comply.
Recent History of Workers' Compensation Insurance Requirements for Contractors. Before the passage of SB 216 (Dodd), Chapter 978, Statutes of 2022, only a C-39 (Roofing) contractor was required to have workers' compensation insurance regardless of whether they had any employees. In response to growing evidence that a significant number of contractors had exemptions on file but were still employing workers, SB 216 expanded the classifications prohibited from filing an exemption, effective January 1, 2023. It also required every contractor to have workers' compensation insurance, without exception, beginning January 1, 2026.
During the CSLB's 2024 Sunset Review, the CSLB estimated that 115,000 contractors would need to obtain workers' compensation insurance and expressed concerns that the implementation of SB 216 would have a greater-than-anticipated impact on its workload and potentially increase license processing times. The CSLB also shared concerns raised by stakeholders that the bill would unfairly impact contractors with no employees. Moreover, the CSLB projected that if 10% of licensees stopped paying to maintain a license, it could lose $8 million in revenue, potentially impacting its enforcement operations. In response, Senator Dodd introduced SB 1071 of 2024, which would have allowed contractors to file an exemption if they provided both an affidavit and adequate proof that they have no employees. That bill was held in the Assembly Appropriations Committee, but the CSLB's sunset bill, SB 1455 (Ashby), Chapter 485, Statutes of 2024, delayed the implementation of the universal workers' compensation requirement to January 1, 2028, and required the CSLB to establish an exemption verification process by January 1, 2027.
This bill initially sought to rescind the universal workers' compensation insurance mandate that takes effect on January 1, 2028, and instead allow contractors, except C-39 (Roofing) contractors, to file an exemption if they meet specified criteria. These provisions were stricken from the bill in the Senate and replaced by a requirement that the CSLB provide a report to the Legislature by January 1, 2027, outlining a process to verify that a contractor has no employees.
CSLB Civil Penalties. The CSLB is authorized to take disciplinary action against licensed and unlicensed contractors who have violated the License Law and is empowered to use an escalating scale of penalties, ranging from citations and fines (referred to as civil penalties) to license suspension and revocation. Current law caps the civil penalty amount that the CSLB may assess for workers' compensation insurance violations at $30,000. This bill would establish a minimum fine of $10,000 per violation for any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee. This bill would authorize additional civil penalties for subsequent violations, up to $30,000 per occurrence.
Report to the Legislature. Current law requires the CSLB to submit an annual report to the Legislature by October 1st with data related to its enforcement program, including, but not limited to, the number of complaints received, disciplinary actions taken, and enforcement timeframes. This bill would require the CSLB to include the number of disciplinary actions it has taken against contractors for workers' compensation insurance violations.
According to the Author
"[This bill] will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law, and will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers' compensation insurance policies. This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs, while meeting our commitments to California's workers."
Arguments in Support
As the sponsor of this bill, the CSLB writes: "Board members expressed support for the enhanced penalties in the bill and is committed to working in good faith with [Senator Tim Grayson] and the Legislature on a responsible and lasting solution to the concern of requiring business owners who do not use employees to obtain workers' compensation insurance."
Arguments in Opposition
There is no opposition on file.
FISCAL COMMENTS
According to the Assembly Appropriations Committee:
- CSLB's estimates minor and absorbable special fund costs to create a verification process for workers' compensation insurance exemptions and report its proposed process to the Legislature by January 1, 2027. Specifically, CSLB indicates its licensing division estimates approximately 120 hours to develop and report to Legislature the verification process and CSLB's Information Technology department estimates approximately 1,000 hours for custom programming to implement the exemption verification change and to make changes to the website.
- Possible increased penalty revenue of an unknown amount, potentially in the mid-hundreds of thousands of dollars annually (special funds), to the extent this legislation results in higher civil penalties collected. For example, 30 contractors paying the minimum $10,000 penalty, rather than the $200 required under existing law, would generate additional penalty revenue of nearly $300,000 annually.
Although hard to predict, to the extent the bill does not deter violators or cause contractors to stop paying to maintain a license, continued violations could result in significant penalty revenue increases to CSLB. For context, CSLB reported that between January 2018 and March 2020 it issued 500 stop-work orders to licensed contractors on job sites for failing to secure workers' compensation and took 342 legal actions against licensed contractors for workers' compensation insurance violations.
VOTES
SENATE FLOOR: 35-0-5
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Hurtado, Laird, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
ABS, ABST OR NV: Cervantes, Grove, Jones, Limón, Reyes
ASM BUSINESS AND PROFESSIONS: 16-0-2
YES: Berman, Flora, Ahrens, Alanis, Caloza, Chen, Elhawary, Hadwick, Haney, Irwin, Jackson, Krell, Lowenthal, Ellis, Nguyen, Pellerin
ABS, ABST OR NV: Bains, Bauer-Kahan
ASM INSURANCE: 17-0-0
YES: Calderon, Wallis, Addis, Alvarez, Ávila Farías, Berman, Chen, Ellis, Gipson, Hadwick, Harabedian, Krell, Nguyen, Ortega, Petrie-Norris, Michelle Rodriguez, Valencia
ASM APPROPRIATIONS: 15-0-0
YES: Wicks, Sanchez, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Ahrens, Pacheco, Pellerin, Solache, Ta, Tangipa
UPDATED
VERSION: September 3, 2025
CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0001656
SENATE THIRD READING
STR Bill Id:SB 291
Author:(Grayson)
As Amended Ver:May 1, 2025
Majority vote
SUMMARY
Strengthens enforcement of workers' compensation insurance requirements for contractors licensed by the Contractors State License Board (CSLB).
Major Provisions
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for workers' compensation insurance violations.
- Establishes minimum civil penalties for workers' compensation insurance violations:
- Prohibits the CSLB from renewing or reinstating a license in violation of workers' compensation insurance requirements until the applicant or licensee provides the CSLB with a current and valid Certificate of Workers' Compensation Insurance or Certification of Self-Insurance in the applicant's or licensee's business name.
- Requires the CSLB to report its proposed process for verifying that an applicant or licensee without employees is eligible for exemption from the workers' compensation insurance requirement to the Legislature by January 1, 2027, as specified.
COMMENTS
Workers' Compensation Insurance. The License Law, which governs contractors in California and is enforced by the CSLB, requires contractors to have workers' compensation insurance if they have employees. Contractors are required to submit to CSLB a valid Certificate of Workers' Compensation Insurance, a valid Certification of Self-Insurance from the Department of Industrial Relations, or a Certificate of Exemption. Contractors without employees may file an exemption–except for those holding C-8 (Concrete), C-20 (Heating, Ventilation, and Air Conditioning), C-22 (Asbestos Abatement), and D-49 (Tree Service) licenses. Filing a false workers’ compensation insurance exemption is cause for disciplinary action by the CSLB and cancellation of the false exemption, which subjects the license to suspension. This bill would prohibit the CSLB from renewing or reinstating a contractor's license until they comply.
Recent History of Workers' Compensation Insurance Requirements for Contractors. Before the passage of SB 216 (Dodd), Chapter 978, Statutes of 2022, only a C-39 (Roofing) contractor was required to have workers' compensation insurance regardless of whether they had any employees. In response to growing evidence that a significant number of contractors had exemptions on file but were still employing workers, SB 216 expanded the classifications prohibited from filing an exemption, effective January 1, 2023. It also required every contractor to have workers' compensation insurance, without exception, beginning January 1, 2026.
During the CSLB's 2024 Sunset Review, the CSLB estimated that 115,000 contractors would need to obtain workers' compensation insurance and expressed concerns that the implementation of SB 216 would have a greater-than-anticipated impact on its workload and potentially increase license processing times. The CSLB also shared concerns raised by stakeholders that the bill would unfairly impact contractors with no employees. Moreover, the CSLB projected that if 10% of licensees stopped paying to maintain a license, it could lose $8 million in revenue, potentially impacting its enforcement operations. In response, Senator Dodd introduced SB 1071 of 2024, which would have allowed contractors to file an exemption if they provided both an affidavit and adequate proof that they have no employees. That bill was held in the Assembly Appropriations Committee, but the CSLB’s sunset bill, SB 1455 (Ashby), Chapter 485, Statutes of 2024, delayed the implementation of the universal workers' compensation requirement to January 1, 2028, and required the CSLB to establish an exemption verification process by January 1, 2027.
This bill initially sought to rescind the universal workers' compensation insurance mandate that takes effect on January 1, 2028, and instead allow contractors, except C-39 (Roofing) contractors, to file an exemption if they meet specified criteria. These provisions were stricken from the bill in the Senate and replaced by a requirement that the CSLB provide a report to the Legislature by January 1, 2027, outlining a process to verify that a contractor has no employees.
CSLB Civil Penalties. The CSLB is authorized to take disciplinary action against licensed and unlicensed contractors who have violated the License Law and is empowered to use an escalating scale of penalties, ranging from citations and fines (referred to as civil penalties) to license suspension and revocation. Current law caps the civil penalty amount that the CSLB may assess for workers’ compensation insurance violations at $30,000. This bill would establish a minimum fine of $10,000 per violation for any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee. This bill would authorize additional civil penalties for subsequent violations, up to $30,000 per occurrence.
Report to the Legislature. Current law requires the CSLB to submit an annual report to the Legislature by October 1st with data related to its enforcement program, including, but not limited to, the number of complaints received, disciplinary actions taken, and enforcement timeframes. This bill would require the CSLB to include the number of disciplinary actions it has taken against contractors for workers' compensation insurance violations.
According to the Author
“[This bill] will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law, and will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers' compensation insurance policies. This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs, while meeting our commitments to California’s workers.”
Arguments in Support
As the sponsor of this bill, the CSLB writes: “Board members expressed support for the enhanced penalties in the bill and is committed to working in good faith with [Senator Tim Grayson] and the Legislature on a responsible and lasting solution to the concern of requiring business owners who do not use employees to obtain workers’ compensation insurance.”
Arguments in Opposition
There is no opposition on file.
FISCAL COMMENTS
According to the Assembly Appropriations Committee:
- CSLB's estimates minor and absorbable special fund costs to create a verification process for workers' compensation insurance exemptions and report its proposed process to the Legislature by January 1, 2027. Specifically, CSLB indicates its licensing division estimates approximately 120 hours to develop and report to Legislature the verification process and CSLB's Information Technology department estimates approximately 1,000 hours for custom programming to implement the exemption verification change and to make changes to the website.
- Possible increased penalty revenue of an unknown amount, potentially in the mid-hundreds of thousands of dollars annually (special funds), to the extent this legislation results in higher civil penalties collected. For example, 30 contractors paying the minimum $10,000 penalty, rather than the $200 required under existing law, would generate additional penalty revenue of nearly $300,000 annually.
Although hard to predict, to the extent the bill does not deter violators or cause contractors to stop paying to maintain a license, continued violations could result in significant penalty revenue increases to CSLB. For context, CSLB reported that between January 2018 and March 2020 it issued 500 stop-work orders to licensed contractors on job sites for failing to secure workers’ compensation and took 342 legal actions against licensed contractors for workers’ compensation insurance violations.
VOTES
SENATE FLOOR: 35-0-5
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Hurtado, Laird, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
ABS, ABST OR NV: Cervantes, Grove, Jones, Limón, Reyes
ASM BUSINESS AND PROFESSIONS: 16-0-2
YES: Berman, Flora, Ahrens, Alanis, Caloza, Chen, Elhawary, Hadwick, Haney, Irwin, Jackson, Krell, Lowenthal, Ellis, Nguyen, Pellerin
ABS, ABST OR NV: Bains, Bauer-Kahan
ASM INSURANCE: 17-0-0
YES: Calderon, Wallis, Addis, Alvarez, Ávila Farías, Berman, Chen, Ellis, Gipson, Hadwick, Harabedian, Krell, Nguyen, Ortega, Petrie-Norris, Michelle Rodriguez, Valencia
ASM APPROPRIATIONS: 15-0-0
YES: Wicks, Sanchez, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Ahrens, Pacheco, Pellerin, Solache, Ta, Tangipa
UPDATED
VERSION: May 1, 2025
CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0001428
Date of Hearing: August 20, 2025
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
SBPCA Bill Id:SB 291
Author:(Grayson) – As Amended Ver:May 1, 2025
Policy Committee: | Business and Professions | Vote: | 16 - 0 |
Insurance | 17 - 0 | ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill establishes minimum civil penalties the Contractors State License Board (CSLB) may assess for a violation of workers’ compensation insurance requirements, prohibits CSLB from renewing or reinstating a contractor license in violation of workers’ compensation insurance requirements until specified conditions are met, and imposes additional reporting requirements on CSLB.
Specifically, this bill:
- Requires CSLB to include in its annual report to the Legislature the number of disciplinary actions for workers’ compensation insurance violations.
- Establishes the following minimum civil penalties for workers’ compensation insurance violations:
- $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers’ compensation coverage.
- $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without workers’ compensation coverage.
- Additional civil penalties for subsequent violations, not to exceed a total of $30,000 per occurrence.
- Prohibits CSLB from renewing or reinstating a license in violation of workers’ compensation insurance requirements until the applicant or licensee provides CSLB with a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name.
- Requires CSLB to report to the Legislature by January 1, 2027, its proposed process for verifying an applicant or licensee without employees is eligible for exemption from the workers’ compensation insurance requirement.
FISCAL EFFECT:
- CSLB’s estimates minor and absorbable special fund costs to create a verification process for workers’ compensation insurance exemptions and report its proposed process to the Legislature by January 1, 2027. Specifically, CSLB indicates its licensing division estimates approximately 120 hours to develop and report to Legislature the verification process and CSLB’s Information Technology department estimates approximately 1,000 hours for custom programming to implement the exemption verification change and to make changes to the website.
- Possible increased penalty revenue of an unknown amount, potentially in the mid-hundreds of thousands of dollars annually (special funds), to the extent this legislation results in higher civil penalties collected. For example, 30 contractors paying the minimum $10,000 penalty, rather than the $200 required under existing law, would generate additional penalty revenue of nearly $300,000 annually.
Although hard to predict, to the extent the bill does not deter violators or cause contractors to stop paying to maintain a license, continued violations could result in significant penalty revenue increases to CSLB. For context, CSLB reported that between January 2018 and March 2020 it issued 500 stop-work orders to licensed contractors on job sites for failing to secure workers’ compensation and took 342 legal actions against licensed contractors for workers’ compensation insurance violations.
COMMENTS:
- Purpose. This bill is sponsored by CSLB. According to the author:
[This bill] will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law, and will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers compensation insurance policies. This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs, while meeting our commitments to California’s workers.
- Background. CSLB and Workers’ Compensation Insurance Exemptions. Existing law establishes CSLB under the Department of Consumer Affairs (DCA) to implement and enforce the Contractors State License Law (License Law), which includes the licensing and regulation of contractors and home improvement salespersons. There are over 241,000 contractors with an active license in California.
The Contractors State License Law requires, as a condition of CSLB licensure, an applicant or licensee have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance. Until January 1, 2028, existing law exempts an applicant or licensee that has no employees and does not hold a specified license, an applicant or licensee organized as a joint venture, or a holder of an inactive license, as specified. Existing law, beginning January 1, 2028, instead exempts only an applicant or licensee organized as a joint venture that has no employees or a holder of an inactive license, as specified.
Existing law requires CSLB, by January 1, 2027, to establish a process and procedure to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance requirement. Existing law authorizes this process or procedure to include an audit, proof, or other means, to verify eligibility.
This bill requires CSLB, by January 1, 2027, to provide this report to the Legislature, and requires, rather than authorizes, the verification process or procedure to include an audit, proof, or other means to verify eligibility for exemption.
CSLB Civil Penalties. Existing law authorizes CSLB to issue various civil penalties under the Contractors State License Law for both unlicensed persons and licensees. The minimum civil penalty for all but five violations is $500 or less, with the majority being $100 or $200. The CSLB last updated the minimum civil penalties in 2007.
Existing law sets the minimum civil penalty amount CSLB may assess for workers’ compensation insurance violations at $200, and caps the amount at $30,000.
This bill establishes a minimum fine of $10,000 per violation for a sole owner and $20,000 per violation for a partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation insurance coverage. This bill authorizes additional civil penalties for any subsequent violations, not to exceed $30,000 per occurrence.
Annual Reporting. Existing law requires CSLB to submit an annual report to the Legislature by October 1st of each year with data related to its enforcement program, including, but not limited to, the number of complaints received, disciplinary actions taken, and enforcement timeframes. This bill requires CSLB additionally include in this report the number of disciplinary actions it has taken against contractors for violations of workers’ compensation insurance.
- Related Legislation. SB 779 (Archuleta), of this legislative session, increases minimum civil penalty amounts for Contractors State License Law violations, effective July 1, 2026, including establishing a $1,500 minimum civil penalty for filing false workers’ compensation materials, and authorizes CSLB to raise the minimum fines every five years pursuant to the Consumer Price Index. SB 799 is pending in this committee.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: July 16, 2025
ASSEMBLY COMMITTEE ON INSURANCE
Lisa Calderon, Chair
SBPCA Bill Id:SB 291
Author:(Grayson) – As Amended Ver:May 1, 2025
SENATE VOTE: 35-0
SUBJECT: Contractors: workers’ compensation insurance
SUMMARY: Increases penalties for workers’ compensation violations by contractors.
Specifically, this bill:
- Requires the Contractors State License Board (CSLB) to include in its annual report to the Legislature the number of disciplinary actions for workers’ compensation insurance violations.
- Establishes the following minimum civil penalties for workers’ compensation insurance violations:
- $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers’ compensation coverage.
- $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without workers’ compensation coverage.
- Additional civil penalties for subsequent violations, not to exceed a total of $30,000 per occurrence.
- Prohibits the CSLB from renewing or reinstating a license in violation of workers’ compensation insurance requirements until the applicant or licensee provides the CSLB with a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name.
- Requires the CSLB to report its proposed process for verifying that an applicant or licensee without employees is eligible for exemption from the workers’ compensation insurance requirement to the Legislature by January 1, 2027, as specified.
EXISTING LAW:
- Establishes, until January 1, 2025, the CSLB under the Department of Consumer Affairs (DCA) to implement and enforce the Contractors State License Law (License Law), which includes the licensing and regulation of contractors and home improvement salespersons. (Business and Professions Code (BPC) §§ 7000 et seq.)
- Establishes an enforcement division within the CSLB to enforce the License Law, prohibiting all forms of unlicensed activity and enforcing the obligation to secure the payment of valid and current workers’ compensation insurance, as specified. (BPC § 7011.4(a))
- Permits the CSLB to assess a civil penalty up to $30,000 for specified violations including workers’ compensation fraud. (BPC § 7099.2)
- Requires, as a general matter, that an applicant or licensee have a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance. (BPC § 7125)
- Provides that the failure of a licensee to obtain or maintain workers’ compensation insurance coverage will result in the automatic suspension of the license. (BPC § 7125.2)
FISCAL EFFECT: Unknown.
COMMENTS:
- Purpose: According to the author, “SB 291 will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law. It will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers compensation insurance policies. This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs, while meeting our commitments to California’s workers.”
- Background: The CSLB is responsible for implementing and enforcing the License Law, which governs the licensure, practice, and discipline of contractors in California. A license is required for construction projects valued at $1,000 or more, including labor and materials. The CSLB issues licenses to business entities and sole proprietors. Each license requires a qualifying individual (a “qualifier”) who satisfies the experience and examination requirements for licensure and directly supervises and controls construction work performed under the license. At the time of this writing, there are more than 241,000 contractors with an active license in California.
- The License Law requires applicants and licensees, as a condition of licensure, to have workers’ compensation insurance if they have any employees. Applicants and licensees are required to submit to CSLB a valid Certificate of Workers’ Compensation Insurance, a valid Certification of Self-Insurance from the Department of Industrial Relations, or a Certificate of Exemption. Contractors without employees may file an exemption, except for those holding C-8 (Concrete), C-20 (Heating, Ventilation, and Air Conditioning), C-22 (Asbestos Abatement), and D-49 (Tree Service) licenses. Filing a false workers’ compensation insurance exemption is cause for disciplinary action by the CSLB and cancellation of the false exemption, which subjects the license to suspension. This bill would prohibit the CSLB from renewing or reinstating the license of a contractor who previously violated the workers’ compensation insurance requirements until they provide the CSLB with a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance.
- CSLB Civil Penalties. The CSLB is authorized to take disciplinary action against licensed and unlicensed contractors who have violated the License Law and is empowered to use an escalating scale of penalties, ranging from citations and fines (referred to as civil penalties) to license suspension and revocation. Current law caps the civil penalty amount that the CSLB may assess for workers’ compensation insurance violations at $30,000. This bill would establish a minimum fine of $10,000 per violation for any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation insurance coverage. This bill would authorize additional civil penalties for any subsequent violations, not to exceed $30,000 per occurrence.
- Double Referral. This bill previously passed out of the Assembly Business and Professions committee 16-0.
REGISTERED SUPPORT / OPPOSITION:
Support
Associated Builders and Contractors of California
Contractors State License Board
Western Electrical Contractors Association
Opposition
None on file.
Analysis Prepared by: Paul Riches / INS. / (916) 319-2086
Date of Hearing: June 24, 2025
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Marc Berman, Chair
SBPCA Bill Id:SB 291
Author:(Grayson) – As Amended Ver:May 1, 2025
NOTE: This bill is double referred and if passed by this Committee will be re-referred to the Assembly Insurance Committee.
SENATE VOTE: 35-0
SUBJECT: Contractors: workers’ compensation insurance
SUMMARY: Requires the Contractors State License Board (CSLB) to report workers’ compensation insurance violations through an existing reporting requirement to the Legislature; establishes minimum civil penalties for workers’ compensation insurance violations; prohibits the CSLB from renewing or reinstating a license without a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance if that contractor previously violated the workers’ compensation insurance mandate; and requires the CSLB to provide a report to the Legislature by January 1, 2027, detailing how it could verify that a contractor has no employees.
EXISTING LAW:
- Establishes, until January 1, 2025, the CSLB under the Department of Consumer Affairs (DCA) to implement and enforce the Contractors State License Law (License Law), which includes the licensing and regulation of contractors and home improvement salespersons. (Business and Professions Code (BPC) §§ 7000 et seq.)
- Requires, until January 1, 2025, the CSLB, by and with the approval of the director, to appoint a registrar of contractors, to be the executive officer and secretary of the CSLB, and to carry out all of the administrative duties of the board. (BPC § 7011)
- Establishes an enforcement division within the CSLB to rigorously enforce the License Law, prohibiting all forms of unlicensed activity and enforcing the obligation to secure the payment of valid and current workers’ compensation insurance, as specified. (BPC § 7011.4(a))
- Requires the CSLB to provide an annual report to the Legislature, no later than October 1, related to complaints filed with the CSLB, as specified. (BPC § 7017.3)
- Exempts from the License Law a work or operation on one undertaking or project by one or more contracts if the aggregate price for labor, materials, and all other items is less than $1,000 that work or operation being considered of casual, minor, or inconsequential nature, and the work or operation does not require a building permit. (BPC § 7048)
- Authorizes the CSLB to issue contractors’ licenses to individual owners, partnerships, corporations, and limited liability companies. (BPC § 7065(b))
- Requires the CSLB to promulgate regulations covering the assessment of civil penalties that consider the gravity of the violation, the good faith of the licensee or applicant for licensure being charged, and the history of previous violations. Except as otherwise provided, prohibits the CSLB from assessing a civil penalty that exceeds $8,000. Specifies that the CSLB may assess a civil penalty up to $30,000 for specified violations (e.g., willful or deliberate disregard and violation of state and local building laws; aiding or abetting an unlicensed person to violate the License Law; entering into a contract with an unlicensed person; and committing workers’ compensation insurance fraud). (BPC § 7099.2)
- Requires, until January 1, 2028, as a condition of licensure, that an applicant or licensee have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, unless that applicant or licensee has no employees and does not hold a C-8, C-20, C-22, C-39, or a D-49 license; the applicant or licensee is organized as a joint venture; or the license is inactive, as specified. (BPC § 7125(a-d))
- Requires, beginning January 1, 2028, as a condition of licensure, that an applicant or licensee have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, unless the applicant or licensee is organized as a joint venture that has no employees or the license is inactive, as specified. (BPC § 7125(a-c) operative on January 1, 2028)
- Makes the failure of a licensee to obtain or maintain workers’ compensation insurance coverage, if required, result in the automatic suspension of the license by operation of law, as specified, and imposes the license suspension upon the earlier of either of the following:
- a) On the date that the relevant workers’ compensation coverage lapses.
- b) On the date that workers’ compensation coverage is required to be obtained.
- (BPC § 7125.2)
- Prohibits filing a false Workers’ Compensation Insurance exemption certificate, employing a person without filing a certificate of insurance with CSLB for that person, or employing a person without maintaining coverage for that person. (BPC § 7125.4)
- Requires the CSLB, by no later than January 1, 2027, to establish a process and procedure, which may include an audit, proof, or other means, to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance requirement. (BPC § 7125.7)
- Makes any licensee, agent, or officer, who violates or omits to comply with the provisions requiring a certificate of workers’ compensation under the License Law guilty of a misdemeanor and makes any non-licensee, acting in the capacity of a contractor, who fails to comply with workers’ compensation requirements specified in Labor Code § 3700 guilty of a misdemeanor, as specified. (BPC § 7126(a)(b))
- Requires every employer, except the state, to secure the payment of workers’ compensation in one or more of the following ways:
- By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this state.
- By securing from the Director of Industrial Relations a certificate of consent to self-insure either as an individual employer, or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his or her employees.
- For any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state, including each member of a pooling arrangement under a joint exercise of powers agreement (but not the state itself), by securing from the Director of Industrial Relations a certificate of consent to self-insure against workers’ compensation claims, which certificate may be given upon furnishing proof satisfactory to the director of ability to administer workers’ compensation claims properly, and to pay workers’ compensation claims that may become due to its employees.
(Labor Code § 3700)
THIS BILL:
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for workers’ compensation insurance violations.
- Establishes the following minimum civil penalties for workers’ compensation insurance violations:
- $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers’ compensation coverage.
- $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without workers’ compensation coverage.
- Additional civil penalties for subsequent violations, not to exceed a total of $30,000 per occurrence.
- Prohibits the CSLB from renewing or reinstating a license in violation of workers’ compensation insurance requirements until the applicant or licensee provides the CSLB with a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name.
- Requires the CSLB to report its proposed process for verifying that an applicant or licensee without employees is eligible for exemption from the workers’ compensation insurance requirement to the Legislature by January 1, 2027, as specified.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, no significant state costs anticipated.
COMMENTS:
Purpose. This bill is sponsored by the Contractors State License Board. According to the author:
[This bill] will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law, and will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers compensation insurance policies. This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs, while meeting our commitments to California’s workers.
Background. The CSLB is responsible for implementing and enforcing the License Law, which governs the licensure, practice, and discipline of contractors in California. A license is required for construction projects valued at $1,000 or more, including labor and materials. The CSLB issues licenses to business entities and sole proprietors. Each license requires a qualifying individual (a “qualifier”) who satisfies the experience and examination requirements for licensure and directly supervises and controls construction work performed under the license. The CSLB issues four types of licenses: “A” General Engineering Contractor; “B” General Building Contractor; “B-2” Residential Remodeling Contractor; and “C” Specialty Contractor, of which there are 42 classifications. Each licensing classification (I.e., electrical, drywall, painting, plumbing, roofing, and fencing) authorizes a specific type of construction work. At the time of this writing, there are more than 241,000 contractors with an active license in California.
Workers’ Compensation Insurance. In California, all employers are required to have workers’ compensation insurance and to pay for workers’ compensation benefits for workers who experience a work-related injury or illness. Workers’ compensation benefits include medical care, disability benefits, job displacement benefits, and death benefits. These benefits are designed to provide injured or ill employees with the necessary medical treatment to recover, partially replace lost wages, and support workers’ return to work. Workers’ compensation benefits do not include damages for pain and suffering or punitive damages. Employers may purchase workers’ compensation insurance from a licensed insurance company or through the State Compensation Insurance Fund. Self-insurance is also an option, but it requires state approval, a net worth of at least $5 million, an annual net income of $500,000, and the posting of a security deposit.
The state does not regulate workers’ compensation insurance premium rates. The Workers’ Compensation Insurance Rating Bureau recommends rates, and insurance companies must disclose their rates to the California Department of Insurance, but rates can vary among insurance companies. Annual premiums are determined by a variety of factors, including industry classification. Insurance companies assign a specific rate to each classification code, subject to approval by the Insurance Commissioner. The classification code and related rate are used to calculate the base rate of the workers’ compensation insurance premium. The assigned rate is expressed as a dollar value and multiplied by each $100 of payroll per classification.
Employees who suffer from a work-related injury or illness are entitled to medical treatment and other benefits regardless of whether their employer has workers’ compensation insurance. The Uninsured Employers Benefits Trust Fund pays claims to workers when employers fail to pay workers’ compensation benefits due to being uninsured. The UEBTF then pursues reimbursement from the responsible employer.
The License Law requires applicants and licensees, as a condition of licensure, to have workers’ compensation insurance if they have any employees. Applicants and licensees are required to submit to CSLB a valid Certificate of Workers’ Compensation Insurance, a valid Certification of Self-Insurance from the Department of Industrial Relations, or a Certificate of Exemption. Contractors without employees may file an exemption, except for those holding C-8 (Concrete), C-20 (Heating, Ventilation, and Air Conditioning), C-22 (Asbestos Abatement), and D-49 (Tree Service) licenses. Filing a false workers’ compensation insurance exemption is cause for disciplinary action by the CSLB and cancellation of the false exemption, which subjects the license to suspension. This bill would prohibit the CSLB from renewing or reinstating the license of a contractor who previously violated the workers’ compensation insurance requirements until they provide the CSLB with a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance.
Recent History of Workers’ Compensation Insurance Requirements for Contractors. Prior to the passage of SB 216 (Dodd), Chapter 978, Statues of 2022, only a C-39 (Roofing) contractor was required to have workers’ compensation insurance regardless of whether they had any employees. SB 216 expanded the classifications prohibited from filing an exemption, effective January 1, 2023, and required every contractor to have workers’ compensation insurance, without exception, beginning January 1, 2026. That bill was sponsored by CSLB and introduced after it became evident that a significant number of contractors had exemptions on file but were employing workers. A 2017 audit of a sample of C-8 (Concrete), C-12 (Earthwork/Paving), C-27 (Landscaping), and D-49 (Tree Service) contractors revealed that at least 59% had false workers’ compensation insurance exemptions on file with the CSLB. Moreover, the CSLB reported that between January 2018 and March 2020, it issued 500 stop-work orders to licensed contractors on job sites for failing to secure workers’ compensation and took 342 legal actions against licensed contractors for workers’ compensation insurance violations. At that time, approximately 55% of contractors had a current exemption on file with the CSLB. SB 216 was intended to curb workers’ compensation insurance fraud in the construction industry.
During the CSLB’s 2024 Sunset Review, the Board estimated that 115,000 contractors would need to obtain workers’ compensation insurance and expressed concerns that the implementation of SB 216 would have a greater-than-anticipated impact on its workload and potentially increase license processing times. The CSLB also shared concerns raised by stakeholders that this bill would unfairly impact contractors with no employees. Moreover, the CSLB projected that if 10% of licensees stopped paying to maintain a license, it could lose $8 million in revenue, potentially impacting its enforcement operations.
In response to the CSLB’s concerns, Senator Dodd introduced a subsequent bill, SB 1071 of 2024, which would have allowed contractors with no employees to file an exemption from the requirement to obtain workers’ compensation insurance, if the applicant or licensee provided both an affidavit and adequate proof, as provided for by the CSLB, to demonstrate they are operating without employees. That bill was held in the Assembly Appropriations Committee. However, the CSLB’s sunset bill, SB 1455 (Ashby), Chapter 485, Statutes of 2024, delayed the implementation of the universal workers’ compensation requirement to January 1, 2028, and required the CSLB, by January 1, 2027, to establish a process for verifying whether contractors have employees.
This bill initially sought to rescind the universal workers’ compensation insurance mandate that takes effect on January 1, 2028, and instead allow contractors, except C-39 (roofing) contractors, to file an exemption if they have no employees, do not undertake construction projects valued over $2,000 for labor and materials, and have not been cited or otherwise disciplined by the CSLB previously for failure to maintain workers’ compensation insurance. The applicant or licensee would have also been required to file a statement on a form prescribed by the CSLB before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that the applicant or licensee qualifies for an exemption. Additionally, the bill would have required applicants and licensees to complete an open-book examination that includes questions regarding workers’ compensation laws and regulations. These provisions were stricken from the bill in the Senate Business, Professions and Economic Development Committee and replaced by a requirement that the CSLB provide a report to the Legislature by January 1, 2027, outlining a process to verify that a contractor has no employees.
CSLB Civil Penalties. The CSLB is authorized to take disciplinary action against licensed and unlicensed contractors who have violated the License Law and is empowered to use an escalating scale of penalties, ranging from citations and fines (referred to as civil penalties) to license suspension and revocation. Current law caps the civil penalty amount that the CSLB may assess for workers’ compensation insurance violations at $30,000. This bill would establish a minimum fine of $10,000 per violation for any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation insurance coverage. This bill would authorize additional civil penalties for any subsequent violations, not to exceed $30,000 per occurrence.
Report to the Legislature. Current law requires the CSLB to submit an annual report to the Legislature by October 1st with data related to its enforcement program, including, but not limited to, the number of complaints received, disciplinary actions taken, and enforcement timeframes. This bill would require the CSLB to include the number of disciplinary actions it has taken against contractors for violations of workers’ compensation insurance.
Current Related Legislation. SB 779 (Archuleta) would increase the minimum civil penalty amounts that the CSLB may assess, effective July 1, 2026, and authorize the CSLB to raise the minimums every five years to account for inflation. SB 799 is pending in this committee.
Prior Related Legislation. SB 1455 (Ashby), Chapter 485, Statutes of 2024, as it related to this bill, delayed implementation of the universal worker’s compensation requirement to January 1, 2028, and required the board, by no later than January 1, 2027, to establish a process and procedure, which may include an audit, proof, or other means, to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance requirement.
SB 1071 (Dodd) of 2024 would have added an additional exception to the requirement to obtain workers’ compensation insurance for applicants and licensees that have no employees, if the applicant or licensee provides both an affidavit to the CSLB affirming they have no employees and adequate proof, as provided for by the CSLB, demonstrating they are operating without employees beginning, January 1, 2026. SB 1071 was held under submission in the Senate Appropriations Committee.
SB 601 (McGuire), Chapter 403, Statutes of 2023, required the maximum fine of $5,000 to be imposed when violations of home improvement contract requirements are committed in declared disaster areas.
AB 1747 (Quirk), Chapter 757, Statutes of 2022, authorized the CSLB to assess a civil penalty up to $30,000 for the willful or deliberate disregard of the various state building, labor, and safety laws.
AB 2894 (Cooper) of 2022 would require an applicant or licensee to inform the CSLB of its workers’ compensation classification code as a condition of licensure. AB 2894 died on the Senate Appropriations Committee Suspense File.
SB 216 (Dodd), Chapter 978, Statutes of 2022, required asbestos abatement contractors; concrete contractors; heating, ventilation, and air conditioning (HVAC) contractors; and tree service contractors to have workers' compensation insurance, regardless of whether they have employees, until January 1, 2026, at which time all contractors are required to have workers' compensation insurance regardless of whether they have employees.
AB 569 (Grayson), Chapter 94, Statutes of 2021, increased the maximum fine for general violations of the License Law from $5,000 to $8,000 and increased the maximum fine from $15,000 to $30,000 for specified violations.
AB 2705 (Holden), Chapter 323, Statutes of 2018, subjected an unlicensed person acting as a contractor to the existing criminal penalties that apply to licensed contractors for not securing the required workers’ compensation and makes this crime subject to the same two-year statute of limitations as for licensees.
AB 996 (Cunningham and Brough) of 2018, would have required the CSLB to adopt an enhancement feature on website to allow consumers to monitor the status and progress of a workers’ compensation certification, as specified, and view the time elapsed from when the CSLB received the certification until a final disposition has been approved. AB 996 was held in the Senate Committee on Appropriations.
AB 2219 (Knight), Chapter 389, Statutes of 2012, deleted the sunset date, thereby extending indefinitely the law requiring roofing contractors who hold a C-39 classification to maintain workers' compensation insurance, whether they have employees, and makes additional changes to the law regarding C-39 contractors.
AB 878 (Berryhill), Chapter 686, Statutes of 2011, required a workers' compensation insurer to report to the CSLB a licensed contractor whose insurance policy it cancels, as specified.
AB 397 (Monning), Chapter 546, Statutes of 2011, required a licensed contractor with an exemption for workers' compensation insurance to recertify the exemption upon license renewal or provide proof of workers' compensation coverage.
AB 2305 (Knight) Chapter 423, Statutes of 2010, extended the sunset date, from January 1, 2011 to January 1, 2014, on the law requiring a roofing contractor to obtain and maintain workers' compensation insurance, even if he or she has no employees, and extended the parallel sunset date requiring the Department of Insurance to report on this effect.
AB 881 (Emmerson and Sharon Runner), Chapter 38, Statutes of 2006, required all licensed roofers to have workers compensation insurance, authorizes the Registrar to remove the roofing classification from a contractor license for failure to maintain workers’ compensation insurance, and required workers compensation insurers to roofing contractors to perform annual audits of these policyholders.
ARGUMENTS IN SUPPORT:
As the sponsor of this bill, the CSLB writes: “Board members expressed support for the enhanced penalties in the bill and is committed to working in good faith with [Senator Tim Grayson] and the Legislature on a responsible and lasting solution to the concern of requiring business owners who do not use employees to obtain workers’ compensation insurance.”
The Associated General Contractors, California Chapters, writes in support:
This bill takes important steps to stop bad actors from fraudulently claiming to have no employees in order to avoid securing legally required coverage. Contractors who misrepresent their employee status not only place workers at serious risk but also undercut honest businesses that play by the rules. [This bill’s] provisions enhancing CSLB reporting, increasing civil penalties, and establishing a meaningful exemption verification process are critical to ensuring a level playing field in the construction industry.
ARGUMENTS IN OPPOSITION:
There is no opposition on file.
REGISTERED SUPPORT:
Contractors State License Board (Sponsor)
Associated Builders and Contractors of California
Associated General Contractors, California Chapters
Western Electrical Contractors Association
REGISTERED OPPOSITION:
There is no opposition on file.
Analysis Prepared by: Kaitlin Curry / B. & P. / (916) 319-3301
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 291 |
THIRD READING
Bill No: SB 291
Author: Grayson (D)
Amended: 5/1/25
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 11-0, 4/21/25
AYES: Ashby, Choi, Archuleta, Arreguín, Grayson, Niello, Richardson, Smallwood-Cuevas, Strickland, Umberg, Weber Pierson
SUBJECT: Contractors: workers’ compensation insurance
SOURCE: Author
DIGEST:
This bill (1) requires the Contractors State License Board (CSLB) to report statistical data on violations of workers’ compensation coverage requirements; (2) increases the civil penalty amount for violating workers’ compensation coverage requirements; and, (3) requires the CSLB to provide a process to verify exemption eligibility for workers’ compensation coverage by January 1, 2027, as specified.
ANALYSIS:
Existing law:
- Establishes the CSLB under the jurisdiction of the Department of Consumer Affairs to license and regulate contractors and home improvement salespersons (HIS), and sunsets the CSLB on January 1, 2029, and its authority to appoint a registrar. (Business and Professions Code (BPC) § 7000 et seq.)
- Establishes an enforcement division within the CSLB to rigorously enforce the Contractors State License Law (license law), prohibiting all forms of unlicensed activity and enforcing the obligation to secure the payment of valid and current workers’ compensation insurance, as specified. (BPC § 7011.4(a))
- Requires the CSLB to provide an annual report to the Legislature, no later than October 1, related to complaints filed with the CSLB, as specified.
- Requires as a condition precedent to the issuance, reinstatement, reactivation, renewal or continued maintenance of a contractor license, the applicant to have on file at all times a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant’s or licensee’s business name, as specified. (BPC § 7125(a))
- Exempts from the requirement in 4) above for an applicant/licensee to have workers’ compensation insurance, as specified, if the applicant or licensee meets both of the following, until January 1, 2028:
- Has no employees provided that the applicant or licensee files a statement with the CSLB on a form prescribed by the registrar certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers’ compensation insurance coverage under California law; or,
- Does not hold a C-8, C-20, C-22, C-39, D-49, or subcategory of a C-61 license, as specified, (BPC § 7125(b))
- Requires, beginning January 1, 2028, as a condition precedent to the issuance, reinstatement, reactivation, renewal or continued maintenance of a contractor license, the applicant to have on file at all times a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant’s or licensee’s business name, regardless of license classification as specified. (BPC § 7125(a) operative on January 1, 2028)
- Requires the CSLB, by no later than January 1, 2027, to establish a process and procedure which may include an audit, proof, or other means to verify that an applicant or licensee without an employee or employees is eligible for an exemption from the requirement to obtain workers’ compensation insurance as a condition of licensure. (BPC § 7125.7)
This bill:
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for violating workers’ compensation requirements, as specified.
- Increases the civil penalty amounts for violating workers’ compensation requirements, as specified.
- Requires the CSLB to provide a report to the Legislature of its proposed verification process for workers’ compensation exemptions by January 1, 2027
Background
Contractors State License Board. The CSLB is responsible for the licensure and regulation of the contracting profession along with the registration of home improvement salespersons. All businesses and individuals who by themselves or through others construct, alter, or repair, or offer to construct, alter, or repair, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost, including both labor and materials of one or more contracts on the project is $1,000 or more. The CSLB issues four distinct license types within three branches of contracting services. Each license classification specifies the type of contracting work that may be commenced. A licensee may not work outside of the scope of the classification in which they hold the license.
Annually, no later than October 1, the CSLB is required to provide a report to the Legislature providing statistical information about complaints received by the CSLB. The report includes data about where the complaint originated (public complaint, industry complaint, government agency, etc.); number of complaints referred for field investigations; number of complaints referred to local prosecution; complaints referred to the Attorney General; number of citations issued categorized by the type of citations such as was it an order of correction only or an order of correction and a fine; the number of citations issued to licensees that were vacated or withdrawn; and the number of disciplinary actions categorized by type- revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award, among others. The current report from the CSLB to the Legislature is not required to provide specific data points on the number of complaints or disciplinary actions related to workers’ compensation violations. This bill will update the CSLB’s report to include the number of disciplinary actions for violations of workers’ compensation requirements.
Workers’ Compensation and Licensure History. In California, all employers are required to have workers’ compensation insurance to pay for workers’ compensation benefits for workers who experience work-related injury or illness. Workers’ compensation coverage is important to protect workers in the event of an on-the-job injury. The CSLB does not determine the coverage amount that is required for an entity to obtain workers’ compensation insurance. As part of the licensure and renewal process, the CSLB simply verifies that the applicant or licensee has the required workers’ compensation insurance on file. There are five basic types of workers’ compensation benefits that include medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits. Injured workers may be entitled to one or more of these benefits. The construction industry, as a whole, is often noted as one of the industries at risk for worker injury. Employers may purchase workers’ compensation insurance from a licensed insurance company or through the State Compensation Insurance Fund. Self-insurance is also an option but requires state approval, a minimum net worth of $5 million, net income of $500,000 annually, and posting of a security deposit. As a condition of initial licensure and to maintain an active license, all license classifications are required to have on file with the CSLB, a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance from the Department of Industrial Relations in the applicant’s or licensee’s business name, unless they qualify for an exemption by certifying to the CSLB that they do not have any employees and do not hold a C-39 roofing license, a C-8 (Concrete) D-49 (Tree Service) and C-20 (Warm-Air Heating, Ventilating or Air-Conditioning) license (BPC § 7125(b)), as those license classifications are currently ineligible to self-certify that they do not have employees. There have been longstanding issues within the contracting profession in California regarding the workers’ compensation coverage requirements.
To address concerns that some applicants or licensees were providing a certification of exemption even though they had employees, SB 216 (Dodd, Chapter 978, Statues of 2022) expanded the license classifications required to have a Certificate of Workers’ Compensation Insurance on file with the CSLB to include the (C-8 Concrete), (C-20 HVAC), (C-22 Asbestos Abatement), and (D-49 Tree Service), regardless if the contractor has employees, effective January 1, 2023, and additionally required all licensing classifications (regardless of employee status) obtain workers’ compensation beginning January 1, 2026. Prior to the passage of SB 216, only a C-39 Roofing contractor was required to have workers’ compensation insurance regardless of employees.
SB 1455 and Sunset Review. The CSLB is subject to the joint sunset oversight review process. In December of 2023, the CSLB submitted its required sunset review report to this committee along with the Assembly Committee on Business and Professions. That reported noted significant challenges stemming from the implementation of SB 216. The report highlighted concerns that the implementation of SB 216 would have had a greater impact on CSLB’s workload than anticipated and could potentially increase license processing times.
As a result of the concern raised with respect to those potential licensees who may qualify for an exemption and to address the administrative workload impacts from the CSLB, SB 1455 (Ashby, Chapter 485, Statutes of 2024) paused the requirement for all licensees to have workers’ compensation coverage, regardless on employee status by January 1, 2026, and instead delayed implementation of the requirement until January 1, 2028, and additionally required the CSLB to establish a process, no later than January 1, 2027, to verify through and audit or other means that a contractor applicant or licensee may not have employees. This bill additionally reaffirms the Legislature’s mandate for the CSLB to establish a process to verify that a licensee or applicant who states that they do not have any employees no later than January 1, 2027.
Under current law, BPC § 7126 specifically states that any licensee or agent thereof, who violates the workers’ compensation requirements, under existing law, is guilty of a misdemeanor. This bill adds new civil penalties for a violation of the requirement to have workers’ compensation insurance for those applicants and licensees who have employees in addition the current misdemeanor penalties. The civil penalties range between $10,000 and $30,000 depending on the license type and the number of violations received.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 5/12/25)
Western Electrical Contractors Association
OPPOSITION: (Verified 5/12/25)
None received
ARGUMENTS IN SUPPORT: Western Electrical Contractors Association notes, “SB 291 continues this bipartisan, industry-supported effort to address the abuse of the workers’ compensation requirement for contractors.”
Prepared by: Elissa Silva / B., P. & E.D. / 916-651-4104
5/14/25 12:26:01
**** END ****
Senator Thomas Umberg, Chair
2025-2026 Regular Session
Bill No: SB 291 (Author:Grayson)
Version: April 22, 2025
Hearing Date: April 29, 2025
Fiscal: Yes
Urgency: No
AMConsultant:
SUBJECT
Contractors: workers’ compensation insurance
DIGEST
This bill sets a minimum civil penalty of $10,000 per violation of any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation coverage, as specified. The bill also requires additional data regarding disciplinary actions for violations maintaining workers’ compensation coverage be reported to the Legislature, as provided.
EXECUTIVE SUMMARY
The Contractors State License Board (Board) licenses and regulates contractors and home improvement salespersons in this state and is authorized to impose civil fines for violations of that law. Existing law provides that it is a cause for disciplinary action to: file a false exemption certificate; employ a person subject to coverage under the workers’ compensation laws after the filing of an exemption certificate without first filing a certificate of workers’ compensation insurance or certification of self-insurance; or employ a person subject to coverage under the workers’ compensation laws without maintaining coverage for that person. (Bus. & Prof. Code § 7125.4.) The maximum civil penalty for a violation of these provisions is $30,000. (Bus. & Prof. Code § 7099.2.) This bill sets minimum civil penalties for employing workers without maintaining workers’ compensation coverage.
The bill is sponsored by the Contractors State License Board and supported by the Western Electrical Contractors Association. The Committee received no other timely opposition. The bill passed the Senate Business, Professions and Economic Development Committee on a vote of 11 to 0.
PROPOSED CHANGES TO THE LAW
Existing law:
- Establishes the Contractors State License Board (Board) within the Department of Consumer Affairs to license and regulate contractors and home improvement salespersons pursuant to the Contractors State License Law. (Bus. & Prof. Code §§ 7000 et seq.)
- Authorizes the Board to appoint a Registrar of Contractors to be the executive officer and secretary of the Board. (Bus. & Prof. Code § 7011.)
- Authorizes the Board to establish, by regulation, a system for the issuance of a citation to a licensee that may contain an order of abatement or an order to pay an administrative fine, as provided. (Bus. & Prof. Code § 125.9.)
- Prohibits a civil penalty from exceeding $30,000 for the following acts:
- filing a false exemption certificate;
- the employment of a person subject to coverage under the workers’ compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance; or
- employment of a person subject to coverage under the workers’ compensation laws without maintaining coverage for that worker. (Bus. & Prof. Code § 7099.2; 7125.4.)
- Requires the Board to annually report to the Legislature specified data on complaints filed with the Board, including the number of disciplinary actions categorized by type, such as revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award.
- Requires the Board to establish a process and procedure, no later than January 1, 2027, to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance. This process or procedure may include an audit, proof, or other means. (Bus. & Prof. Code § 7099.2.)
This bill:
- Sets a minimum civil penalty of $10,000 per violation of any sole owner found to have employed workers without maintaining workers’ compensation coverage under 3), above.
- Sets a minimum civil penalty of $20,000 per violation of any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation coverage under 3), above.
- Prohibits civil penalties for any subsequent violation of 1) or 2), above, from exceeding $30,000 per occurrence.
- Requires the Board to also annually report to the Legislature the number of disciplinary actions for violations of 1) through 2), above.
- Requires the Board to report its findings and proposed verification process under 5, above, to the Legislature no later than January 1, 2027.
- Requires the process or procedure to include an audit, proof, or other means to obtain evidence to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance.
COMMENTS
- Stated need for the bill
The author writes:
It is only fair to exempt California’s licensed contractors from the requirement to maintain a certificate of workers’ compensation (WC) insurance on file as a condition of licensure if the licensee does not employ any workers. However, licensees who currently claim an exemption they do not qualify for have an unfair business advantage over those licensees who follow the rules. SB 291 is a commonsense measure allowing for a narrow exemption from WC insurance requirements for licensees who do not have employees. The bill also maintains protection for workers by establishing significant penalties for licensees who falsely claim an exemption. By passing this measure, we can uphold consumer protections while helping to ensure that California maintains the licensee population needed to meet consumer construction needs.
- Bill seeks to increase minimum penalties under the Contractors State License Law
The Board is authorized to issue various civil penalties under the Contractors State License Law for both unlicensed persons and licensees. Under current law, a contractor must have a workers’ compensation insurance certificate on file with the Contractors State License Board at all times as a condition of licensure, but may file a certificate of exemption if they certify that they have no employees. Under existing law, the minimum fine for a violation of this requirement is $200 and a maximum fine is $30,000. This bill seeks to increase the minimum fine to $10,000 per violation of any sole owner and $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation coverage, as specified. The bill requires the Board to report to the Legislature its findings and proposed verification process to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance by January 1, 2027. The bill also requires additional data regarding disciplinary actions for having employed workers without maintaining workers’ compensation coverage be reported to the Legislature in an existing annual report.
- Amendment
Under existing law, Section 7099.2 of the Business and Professions Code requires the Board to promulgate regulations covering the assessment of civil penalties for violations of specified provisions of the Contractors State License Law, and provides that a civil penalty is not to exceed $30,000 under specified sections of the Contractors State License Law, including Section 7125.4 of the Business and Professions Code. This bills is amending Section 7125.4 of the Business and Professions Code to provide its own minimum and maximum penalty scheme, so the cross-reference in Section 7099.2 is no longer needed and could lead to confusion in the future if it is not stricken. The author has agreed to take the following amendment to delete the cross reference in Section 7099.2 to Section 7125.4. The specific amendment is as follows:
Amendment
7099.2 of the Business and Professions Code is amended to read:
Section 7099.2. (a) The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors:
(1) The gravity of the violation.
(2) The good faith of the licensee or applicant for licensure being charged.
(3) The history of previous violations.
(b) Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, 7118, or 7125.4. or 7118.
- Support
The Contractors State License Board, sponsor of the bill, writes in support stating:
On behalf of the Contractors State License Board (CSLB), I am pleased to inform you of CSLB’s SUPPORT for SB 291. As the bill’s sponsor, CSLB appreciates partnering with you on this important legislation[…] This bill also establishes steep penalties for falsely claiming a [worker’s compensation] WC exemption.
SUPPORT
Contractors State License Board
Western Electrical Contractors Association
OPPOSITION
None received
RELATED LEGISLATION
Pending Legislation: SB 799 (Archuleta, 2025) increases the amount of certain minimum civil fines, effective July 1, 2026, that the Contractors State License Board may assess under the Contractors State License Law, and authorizes those fines to be increased every five years, as specified. This bill is currently pending in the Senate Appropriations Committee.
Prior Legislation:
SB 601 (McGuire, Ch. 403, Stats. 2023) required the maximum fine of $5,000 to be imposed when violations of home improvement contract requirements are committed in declared disaster areas.
AB 1747 (Quirk, Ch. 757, Stats. 2022) authorized the Board to assess a civil penalty up to $30,000 for the willful or deliberate disregard of the various state building, labor, and safety laws.
AB 569 (Grayson, Ch. 94, Stats. 2021) increased the maximum fine for general violations of the Contractors State License Law from $5,000 to $8,000, and increased the maximum fine from $15,000 to $30,000 for specified violations.
PRIOR VOTES:
Senate Business, Profession and Economic Development Committee (11 Ayes, 0 Noes)
**************
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Angelique Ashby, Chair
2025 - 2026 Regular
Bill No: Hearing Date: April 21, 2025
Author: | |||
Version: |
| ||
Urgency: | Fiscal: | ||
Consultant: | |||
Subject:
SUMMARY:
Revises and recasts the current requirements for a contractor licensee or applicant to have workers’ compensation insurance coverage, as specified.
NOTE:
This measure is double-referred to the Senate Committee on Judiciary, second.
Existing law:
- Establishes the Contractors State License Board (CSLB) under the jurisdiction of the Department of Consumer Affairs (DCA) to license and regulate contractors and home improvement salespersons (HIS), and sunsets the CSLB on January 1, 2029, and its authority to appoint a registrar. (Business and Professions Code (BPC) § 7000 et seq.)
- Establishes an enforcement division within the CSLB to rigorously enforce the Contractors State License Law (license law), prohibiting all forms of unlicensed activity and enforcing the obligation to secure the payment of valid and current workers’ compensation insurance, as specified. (BPC § 7011.4(a))
- Requires the CSLB to provide an annual report to the Legislature, no later than October 1, related to complaints filed with the CSLB, as specified.
- Requires as a condition precedent to the issuance, reinstatement, reactivation, renewal or continued maintenance of a contractor license, the applicant to have on file at all times a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant’s or licensee’s business name, as specified. (BPC § 7125(a))
- Exempts from the requirement in 3) above for an applicant/licensee to have workers’ compensation insurance, as specified, if the applicant or licensee meets both of the following, until January 1, 2028:
- Has no employees provided that the applicant or licensee files a statement with the CSLB on a form prescribed by the registrar certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers’ compensation insurance coverage under California law; or,
- Does not hold a C-8, C-20, C-22, C-39, D-49, or subcategory of a C-61 license, as specified, (BPC § 7125(b))
- States that a certificate of workers’ compensation insurance, self-insurance, or an exemption certificate is not required for the holder on an inactive license. (BPC § 7125(d))
- Requires, beginning January 1, 2028, as a condition precedent to the issuance, reinstatement, reactivation, renewal or continued maintenance of a contractor license, the applicant to have on file at all times a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant’s or licensee’s business name, regardless of license classification as specified. (BPC § 7125(a) operative on January 1, 2028)
- Requires the CSLB, by no later than January 1, 2027, to establish a process and procedure which may include an audit, proof, or other means to verify that an applicant or licensee without an employee or employees is eligible for an exemption from the requirement to obtain workers’ compensation insurance as a condition of licensure. (BPC § 7125.7)
- Makes the failure of a licensee to obtain or maintain workers’ compensation insurance coverage, if required, to result in the automatic suspension of the license by operation of law, as specified, and makes the license suspension imposed upon the earlier of either of the following:
- On the date that the relevant workers’ compensation coverage lapses; or,
- On the date that workers’ compensation coverage is required to be obtained. (BPC § 7125.2)
- Requires the registrar to accept a certificate of workers’ compensation coverage as of the effective date shown on the certificate, if the certificate is received by the registrar within 90 days after that date, the registrar must reinstate a license to which the certificate pertains, if otherwise eligible, retroactive to the effective date of the certificate. (BPC 7125.1(a))
- Requires a licensee who is subject to licensure suspension for failing to maintain workers’ compensation insurance to be provided a notice by the registrar, as specified. (BPC § 7125.2(b))
- Makes any licensee, agent, or officer, who violates or omits to comply with the provisions requiring a certificate of workers’ compensation under the license law to be guilty of a misdemeanor, and makes any non-licensee, acting in the capacity of a contractor, who fails to comply with workers’ compensation requirements specified in Labor Code (LC) § 3700 guilty of a misdemeanor, as specified. (BPC § 7126(a)(b))
- Requires every employer, except the state, to secure the payment of workers’ compensation in one or more of the following ways:
- By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this state.
- By securing from the Director of Industrial Relations a certificate of consent to self-insure either as an individual employer, or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his or her employees.
- For any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state, including each member of a pooling arrangement under a joint exercise of powers agreement (but not the state itself), by securing from the Director of Industrial Relations a certificate of consent to self-insure against workers’ compensation claims, which certificate may be given upon furnishing proof satisfactory to the director of ability to administer workers’ compensation claims properly, and to pay workers’ compensation claims that may become due to its employees. (Labor Code (LC) § 3700))
This bill:
- Revises the January 1, 2028 mandate for workers’ compensation coverage by exempting from the requirement that all licensees and applicants obtain a certificate of workers’ compensation coverage, regardless of employee status, and allows an exemption for an applicant or licensee who has no employees and does not undertake construction projects valued over $2,000 for labor and materials, and has not been citied or otherwise disciplined by the CSLB previously for failure to maintain workers’ compensation coverage or certification of self-insurance, as specified, effective January 1, 2027.
- Specifies that the $2,000 valuation applies to a single work or operation and cannot be circumvented by division of contracts of amounts less than $2,000 for purposes of evasion of workers’ compensation requirements for licensure.
- Requires applicants or licensees to file a statement on a form prescribed by the CSLB before the issuance, reinstatement, reactivation, or continued maintenance of a license certifying that the applicant or licensee does not employ any person in any manner so as to become subject to workers’ compensation las of California, as specified.
- Maintains that only a C-39 roofing contractor is ineligible for an exemption from workers’ compensation coverage requirements for no employees, and restores exemption eligibility for a C-8, C-20, C-22, and D-49, a subcategory of a C-61 license, as specified.
- Adds civil penalties for a violation of filing an exemption for a certificate of workers compensation coverage, or employing individuals subject to workers’ compensation coverage requirements, after filing an exemption, or the employment of persons subject to coverage under the cause for disciplinary action, including, but not limited to the following:
- A minimum civil penalty of $10,000 per violation for any sole owner licensee found to have employed workers without maintaining workers’ compensation coverage;
- A minimum civil penalty of $20,000 per violation for any partnership, corporation, limited liability company, or tribal business licensee found to have employed workers without maintaining workers’ compensation coverage; or,
- Additional civil penalties for any subsequent violations, not to exceed $30,000 per occurrence.
- Prohibits the CSLB from renewing or reinstating a license in violation of the workers’ compensation coverage requirements until the applicant or licensee provides the CSLB with a current and valid certificate of workers’ compensation insurance or certification of self-insurance in the applicant or licensee’s business name.
- Requires the CSLB, on or before January 1, 2027, to complete both of the following:
- Develop an open book examination that includes questions regarding workers’ compensation laws and regulations and requires the licensee to answer those questions correctly; and
- Update the license renewal form to include the open book examination and a requirement that the licensee state under penalty of perjury that they do not have any employees and understand the penalties as specified in 4) above.
- Requires applicants for licensure who are exempt from the workers’ compensation coverage requirements to submit to the CSLB an open book examination, as specified.
- Requires the CSLB to include in its annual report to the Legislature the number of disciplinary actions for violating workers’ compensation requirements, as specified.
FISCAL EFFECT:
Unknown. This bill is keyed fiscal by Legislative Counsel.
COMMENTS:
- Purpose. This bill will update the requirement for workers’ compensation coverage for contractor licensees who have no employees in response to legislation last year which paused the requirement for all licensees, regardless of licensing status, to acquire a certificate of workers’ compensation insurance in order to be licensed. The Contractors State License Board is the sponsor of this bill. According to the author, “It is only fair to exempt California’s licensed contractors from the requirement to maintain a certificate of workers’ compensation (WC) insurance on file as a condition of licensure if the licensee does not employ any workers. SB 291 is a commonsense measure to allow for reasonable exemptions from WC insurance requirements for licensees who do not have employees. By passing this measure, we can ensure employees are protected if they are harmed or injured on the job by establishing significant penalties for any licensee who files a false exemption, while ensuring that California maintains the licensee population needed to meet consumer construction needs.”
- Background.
Contractors State License Board. The CSLB is responsible for the licensure and regulation of the contracting profession along with the registration of home improvement salespersons. All businesses and individuals who by themselves or through others construct, alter, or repair, or offer to construct, alter, or repair, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost, including both labor and materials of one or more contracts on the project is $1,000 or more. There are approximately 280,000 licensed contractors and 28,000 registered home improvement salespersons under the CSLB’s jurisdiction.
Annually, no later than October 1, the CSLB is required to provide a report to the Legislature which provides statistical information about complaints received by the CSLB. Points to be included in the report include where the complaint originated (public complaint, industry complaint, government agency, etc.); number of complaints referred for field investigations; number of complaints referred to local prosecution; complaints referred to the Attorney General; number of citations issued categorized by the type of citations such as was it an order of correction only or an order of correction and a fine; the number of citations issued to licensees that were vacated or withdrawn; and the number of disciplinary actions categorized by type- revocations or suspensions, categorized by whether the disciplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award, among others. The current report from the CSLB to the Legislature is not required to provide specific data points on the number of complaints or disciplinary actions related to workers’ compensation violations. This bill will update the CSLB’s report to include the number of disciplinary actions for violations of workers’ compensation requirements.
The CSLB issues four distinct license types within three branches of contracting services. Each license classification specifies the type of contracting work that may be commenced. A licensee may not work outside of the scope of the classification in which they hold the license.
A summary of each licensure category and construction work allowed is as follows:
- “A”—General Engineering Contractor – A general engineering contractor’s principal contracting business is in connection with fixed works requiring specialized engineering knowledge and skill. Examples of fixed works projects include irrigation, drainage, water power, water supply, flood control, inland waterways, harbors, docks and wharves, shipyards and ports, dams and hydroelectric projects, levees, river control and reclamation works, railroads, highways, streets and roads, tunnels, airports and airways, sewers and sewage disposal plants and systems, waste reduction plants, bridges, overpasses, underpasses and other similar works, pipelines and other systems for the transmission of petroleum and other liquid or gaseous substances, parks, playgrounds and other recreational works, refineries, chemical plants, similar industrial plants requiring specialized engineering knowledge and skill, powerhouses, power plants and other utility plants and installations, mines and metallurgical plants, land leveling and earthmoving projects, excavating, grading, trenching, paving and surfacing work, along with cement and concrete work in connection with the above mentioned fixed works. (Business and Professions Code (BPC) § 7056)
- “B”—General Building Contractor – A general building contractor is a contractor whose principal contracting business is in connection with any structure built or being built for the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind and requiring in that construction the use of at least two unrelated building trades or crafts. (BPC § 7057)
- “B-2”—Residential Remodeling Contractor – A contractor whose principal contracting business is in connection with any project to make improvements to, on, or in an existing residential wood frame structure, and the project requires the use of at least three unrelated building trades or crafts for a single contract. (BPC § 7057.5)
• “C”—Specialty Contractor – A specialty contractor’s operations involve the performance of construction work requiring special skill and involving the use of specialized building trades or crafts (BPC § 7058). In the “C’ category there are 43 specialties. The specialties, which are described in Title 16, California Code of Regulations, are as follows:
- C-2 - Insulation and Acoustical Contractor
- C-4 - Boiler, Hot Water Heating and Steam Fitting Contractor
- C-5 - Framing and Rough Carpentry Contractor
- C-6 - Cabinet, Millwork and Finish Carpentry Contractor
- C-7 - Low Voltage Systems Contractor
- C-8 - Concrete Contractor
- C-9 - Drywall Contractor
- C-10 - Electrical Contractor
- C-11 - Elevator Contractor
- C-12 - Earthwork and Paving Contractors
- C-13 - Fencing Contractor
- C-15 - Flooring and Floor Covering Contractors
- C-16 - Fire Protection Contractor
- C-17 - Glazing Contractor
- C-20 - Warm-Air Heating, Ventilating and Air-Conditioning Contractor
- C-21 - Building Moving/Demolition Contractor
- C-22 - Asbestos Abatement Contractor
- C-23 - Ornamental Metal Contractor
- C-27 - Landscaping Contractor
- C-28 - Lock and Security Equipment Contractor
- C-29 - Masonry Contractor
- C-31 - Construction Zone Traffic Control Contractor
- C-32 - Parking and Highway Improvement Contractor
- C-33 - Painting and Decorating Contractor
- C-34 - Pipeline Contractor
- C-35 - Lathing and Plastering Contractor
- C-36 - Plumbing Contractor
- C-38 - Refrigeration Contractor
- C-39 - Roofing Contractor
- C-42 - Sanitation System Contractor
- C-43 - Sheet Metal Contractor
- C-45 - Sign Contractor
- C-46 - Solar Contractor
- C-47 - General Manufactured Housing Contractor
- C-49 - Tree and Palm Contractor
- C-50 - Reinforcing Steel Contractor
- C-51 - Structural Steel Contractor
- C-53 - Swimming Pool Contractor
- C-54 - Ceramic and Mosaic Tile Contractor
- C-55 - Water Conditioning Contractor
- C-57 - Well Drilling Contractor
- C-60 - Welding Contractor
- C-61 - Limited Specialty
Workers’ Compensation and Licensure History. In California, all employers are required to have workers’ compensation insurance to pay for workers’ compensation benefits for workers who experience work-related injury or illness. Workers’ compensation coverage is important to protect workers in the event of an on-the-job injury. The CSLB does not determine the coverage amount that is required for an entity to obtain workers’ compensation insurance. As part of the licensure and renewal process, the CSLB simply verifies that the applicant or licensee has the required workers’ compensation insurance on file. Because of California’s workers’ compensation requirements, depending on the circumstances of the injury or illness, injured workers are entitled to specific benefits as structured by workers’ compensation insurance. There are five basic types of workers’ compensation benefits that include medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits. Injured workers may be entitled to one or more of these benefits. The construction industry, as a whole, is often noted as one of the industries at risk for worker injury. Employers may purchase workers’ compensation insurance from a licensed insurance company or through the State Compensation Insurance Fund. Self-insurance is also an option but requires state approval, a minimum net worth of $5 million, net income of $500,000 annually, and posting of a security deposit. As a condition of initial licensure and to maintain an active license, all license classifications are required to have on file with the CSLB, a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance from the Department of Industrial Relations in the applicant’s or licensee’s business name, unless they qualify for an exemption by certifying to the CSLB that they do not have any employees and do not hold a C-39 roofing license, a C-8 (Concrete) D-49 (Tree Service) and C-20 (Warm-Air Heating, Ventilating or Air-Conditioning) license (BPC § 7125(b)), as those license classifications are currently ineligible to self-certify that they do not have employees. There have been longstanding issues within the contracting profession in California regarding the workers’ compensation coverage requirements.
To address concerns that some applicants or licensees were providing a certification of exemption even though they had employees, SB 216 (Dodd, Chapter 978, Statues of 2022) expanded the license classifications required to have a Certificate of Workers’ Compensation Insurance on file with the CSLB to include the (C-8 Concrete), (C-20 HVAC), (C-22 Asbestos Abatement), and (D-49 Tree Service), regardless if the contractor has employees, effective January 1, 2023, and additionally required that all licensing classifications (regardless of employee status) obtain workers’ compensation beginning January 1, 2026. Prior to the passage of SB 216, only a C-39 Roofing contractor was required to have workers’ compensation insurance regardless of employees.
The impetus for the CSLB’s sponsorship of SB 216 stemmed from enforcement related work conducted by the CSLB. The CSLB reported that between January 2018 and March 2020, it issued 500 stop work orders to licensed contractors on job sites for failure to secure workers’ compensation and further took 342 legal actions against licensed contractors for workers’ compensation insurance violations. In addition, in 2017, CSLB conducted an audit of a sample of contractors in four classifications that perform outdoor construction likely to require multiple workers C-8 (Concrete), C-12 (Earthwork/Paving), C-27 (Landscaping), and D-49 (Tree Trimming). The survey revealed that at least 59% of contractors audited had false workers’ compensation exemptions on file with CSLB. Contractors who file a false workers’ compensation exemption are subject to disciplinary action and cancelation of the false exemption, which subjects the license to suspension.
SB 1455 and Sunset Review. The CSLB is subject to the joint sunset oversight review process. In December of 2023, the CSLB submitted its required sunset review report to this committee along with the Assembly Committee on Business and Professions. That reported noted significant challenges stemming from the implementation of SB 216. The report highlighted concerns that the implementation of SB 216 would have had a greater impact on CSLB’s workload than anticipated and could potentially increase license processing times. At that time, in early 2024, the CSLB reported the following with respect to the issue of implementing the requirement for workers’ compensation coverage requirements:
“If the 2026 mandate in SB 216 took effect today, approximately 115,000 contractors would currently need a policy. CSLB may expect 10 percent of licensees to stop paying to maintain a license, resulting in a possible loss of $8 million to CSLB’s fund that may impact enforcement operations. Staff also anticipates a significant increase in document processing with an increase in certificates and possibly applications to inactivate or cancel licenses. Staff will need to explore an entirely online certificate process or pursue a partnership with the Workers’ Compensation Insurance Rating Bureau to assist with the tracking and registering of certificates…
…As to workforce issues, contractors have expressed concern about being forced to pay for a policy that does not benefit them. There has always been a concern with any requirement of this nature that a percentage of licentiate will “go underground” instead of paying for workers’ compensation insurance.”
As a result of the concern raised with respect to those potential licensees who may qualify for an exemption and to address the administrative workload impacts from the CSLB, SB 1455 (Ashby, Chapter 485, Statutes of 2024) paused the requirement for all licensees to have workers’ compensation coverage, regardless on employee status by January 1, 2026, and instead delayed implementation of the requirement until January 1, 2028, and additionally required the CSLB to establish a process, no later than January 1, 2027, to verify through and audit or other means that a contractor applicant or licensee may not have employees.
Although SB 1455 provided the CSLB with additional time to implement the requirement for all licensees to obtain workers’ compensation, as part of the licensure or renewal process, and further required the CSLB to establish a process to verify that an applicant or licensee may legitimately not have employees, the CSLB has instead sponsored this bill as a means to achieve the legislative directive in SB 1455.
Instead of mandating workers’ compensation coverage for all licensees, as required by SB 216, this bill would instead exempt a licensee who self-certifies that they have no employees and whose work includes labor and materials, which are no more than $2,000, from the requirement to have workers’ compensation coverage. This bill specifies that a $2,000 contract cannot be split into more than one contract for the project in order to avoid the coverage requirements. This bill would remove the previous mandate for a C-8 (Concrete), D-49 (Tree Service) and C-20 (Warm-Air Heating, Ventilating and Air-Conditioning) licensee to have workers’ compensation, regardless of employee status, and allow these licensees to self-certify that they do not have employees. This bill will now only require a C-39 (roofing contractor) to be required to obtain workers’ compensation insurance regardless of employee status.
To address the Legislature’s mandate that the CSLB establish a process to verify that a licensee or applicant who states that they do not have any employees, this bill requires the CSLB to establish as part of the application and renewal process, an open book examination, which will require applicants and licensees to answer questions correctly regarding workers’ compensation laws.
Under current law, BPC § 7126 specifically states that any licensee or agent thereof, who violates the workers’ compensation requirements, under existing law, is guilty of a misdemeanor. This bill adds new civil penalties for a violation of the requirement to have workers’ compensation insurance for those applicants and licensees who have employees in addition the current misdemeanor penalties. The civil penalties range between $10,000 and $30,000 depending on the license type and the number of violations received.
As currently drafted, this bill provides a one-year implementation delay, until January 1, 2027, for the revised workers’ compensation coverage requirements for those licensees who have no employees; however, the provision that adds civil penalties for violating the current workers’ compensation requirements will go into effect on January 1, 2026, should this bill be signed into law.
- Related Legislation. SB 779 (Archuleta of 2025) Increases the minimum civil penalties for violations related to unlicensed persons to at least $1,500 and would impose minimum civil penalties of at least $500 or $3,000 for other specified violations commencing July 1, 2026, and further requires the CSLB to adjust the amounts of these minimum civil penalties for inflation every 5 years, as specified. (Status: This bill is pending in the Senate Committee on Judiciary)
SB 1455 (Ashby, Chapter 485, Statutes of 2024) Extends the sunset date for the CSLB, authorizes the CSLB to issue a license to a federally recognized tribe, requires the awarding authority of a public works contract to use the license classifications prescribed by law, waives the requirement for an applicant to submit an employment duty statement, delays implementation of the universal worker’s compensation requirement to January 1, 2028, and makes additional policy reforms stemming from the board’s sunset review.
SB 1071 (Dodd of 2024) would have added an additional exception to the requirement to obtain workers’ compensation insurance for applicants and licensees that have no employees, if the applicant or licensee provides both an affidavit to the CSLB affirming they have no employees and adequate proof, as provided for by the CSLB, demonstrating they are operating without employees beginning, January 1, 2026. (Status: This bill was held under submission in the Senate Committee on Appropriations)
AB 2622 (Juan Carrillo, Chapter 240, Statutes of 2024) increases the $500 licensing exemption and advertisement authorization to $ 1,000, as specified.
AB 336 (Cervantes and Dahle, Chapter 323, Statutes of 2023) requires a contractor licensee, at the time of renewal, to certify on a license renewal form the three workers’ compensation classification codes for which the highest estimated payroll is reporter, as specified.
SB 216 (Dodd, Chapter 978, Statues of 2022) expands the license classifications required to have a Certificate of Workers’ Compensation Insurance on file with the CSLB to include a Concrete contractor (C-8), a Warm-Air Heating, Ventilating and Air-Conditioning contractor (C-20,) an Asbestos Abatement contractor (C-22), and a Tree Service contractor (D-49) until January 1, 2026. Beginning January 1, 2026, extends that requirement to include all licensing classifications under the jurisdiction of the CSLB, regardless of whether or not they have employees.
AB 830 (Flora, Chapter 376, Statutes of 2021) makes various technical changes and noncontroversial reforms to laws governing professions regulated by boards and bureaus within the DCA.
AB 569 (Grayson, Chapter 94, Statutes of 2021) increases the maximum civil penalty CSLB can assess against a licensed contractor from $5,000 to $8,000 for most violations and from $15,000 to $30,000 for the most serious violations. This bill also authorizes CSLB to issue a Letter of Admonishment for more than one violation at a time.
- Arguments in Support. The CSLB writes in support and notes, “This bill allows a narrow exemption from workers' compensation (WC) insurance requirements for licensees who do not have employees and meet other requirements starting January 1, 2027. This bill also establishes steep penalties for falsely claiming a WC exemption. This bill allows contractors who legitimately do not have any employees to avoid acquiring costly and unnecessary WC insurance while discouraging licensees seeking an unfair business advantage from falsely claiming they do not have employees.”
- Arguments in Opposition. The Western Electrical Contractors Association is opposed unless amended and notes, “WECA suggests that instead of repealing a broadly supported change, that SB 291 be amended to keep in place the 2028 deadline, along with the new penalties: then the construction industry, regulators, Legislature and insurance industry work in collaboration to develop an affordable “minimum premium” workers compensation policy to comply with the intent of SB 216.”
- Policy Issues for Consideration and Suggested Author Amendments.
Is an open book examination sufficient? Will an open book examination aid the CSLB in evaluating whether or not a licensee truly has no employees? The exam may be duplicative, as the content should be included in the Law and Business exam, which is already a requirement for licensure. The examination adds another step in the licensure and renewal process, which could increase application and renewal processing timeframes, costs for printing and mailing the exam, and may not ensure the applicant or licensee has sufficient understanding of the law.
Rolling back previous workers’ compensation requirements for higher risk classifications. SB 216 required four different licensing classifications to obtain workers’ compensation insurance regardless of employee status. The classifications include asbestos abatement contractors, concrete contractors, heating, ventilation, and air conditioning contractors, and tree service contractors. As currently drafted, this bill would roll back the requirement for these licensing classifications to be mandated to have workers’ compensation insurance, regardless of employees, and allow them to file an exemption if they contract for less than $2000. This rollback does not take into account prior research conducted by the CSLB. Could this bill place those licensees or employees at risk? The CSLB may need to complete an updated industry study on those licensing classifications which may be able to operate without employees.
Are there potential workarounds for the $2,000 contract threshold? This bill would allow a licensee to self-certify that they have no employees if they contract for a project (labor and materials) less than $2,000, and specifies that the contract cannot be broken into multiple contracts to avoid the $2,000 threshold. Unfortunately, this exemption could potentially be circumvented. The $2,000 threshold appears to be arbitrary and does not reflect any study conducted by the CSLB finding that only contracts offered at $2,000 or less ensures that a licensee would be eligible for an exemption, or that any contract higher would require employees.
Does this bill satisfy the legislative mandate for an audit or other proof to verify an applicant or licensee’s eligibility for a workers’ compensation exemption? The CSLB is required to establish a process and procedure which may include an audit, proof, or other means to verify that an applicant or licensee is eligible for an exemption from the requirement to obtain workers’ compensation insurance by January 1, 2027 (BPC § 7125.7). It’s unclear if the provisions of this bill satisfy the legislative mandate for the CSLB to establish a process to verify if a licensee may not have any employees and would be eligible for an exemption. The proposed increased civil penalty and open book examination are not comparable to an audit or providing proof that an applicant or licensee does not have employees.
To address the concerns raised above, the author should amend the bill to strike the current contents of this bill, with the exception of the increased penalties for violating the current workers’ compensation coverage requirements and the inclusion of disciplinary actions related to workers’ compensation violations in the report the CSLB submits annually to the Legislature, to provide greater insight into the current number of violations for workers compensation exemptions. In addition, to reinforce that the Legislature already provided time for the CSLB to address the issue of verifying employee status, this bill should clarify that the CSLB must provide a mechanism no later than January 1, 2027, to effectively determine whether a licensee has no employees and qualifies for an exemption to the workers; compensation coverage requirements and report back to the Legislature.
SUPPORT AND OPPOSITION:
Support:
Contractors State License Board (sponsor)
Opposition:
Western Electrical Contractors Association
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Bill Author
Bill Co-Author(s):