CSLB Workers' Comp Requirement: What Changes in 2028

CSLB Workers' Comp Requirement: What California Contractors Need to Know Before 2028

If you hold a California contractor's license, workers' compensation isn't only an insurance question. It's a licensing question. The Contractors State License Board (CSLB) requires every active licensee to keep either proof of workers' comp coverage or a valid exemption on file. And the rules are changing. A law that would have required every contractor to carry workers' comp starting January 1, 2026 was delayed to January 1, 2028.

Many articles online still say 2026. Here's where things stand as of October 2026, and what to do now.

The current rule: certificate or exemption

Under Business and Professions Code section 7125, a California contractor with an active license must have one of the following on file with CSLB:

1. A Certificate of Workers' Compensation Insurance from your insurer, or a Certification of Self-Insurance from the Department of Industrial Relations, or
2. A Certificate of Exemption, certifying that you have no employees and aren't required to carry workers' comp under state law

If you have a workers' comp certificate on file, you must also certify on your license renewal form the three workers' comp classification codes with the highest estimated payroll on your policy, or every code if the policy has fewer than three (Business and Professions Code section 7125.6).

If your business has employees, you need workers' comp. That's California law for employers in general, not only for contractors.

Five classifications that can't use the exemption

Some classifications must carry workers' comp even with no employees:

• C-8 Concrete
• C-20 Warm-Air Heating, Ventilating and Air-Conditioning (HVAC)
• C-22 Asbestos Abatement
• C-39 Roofing
• C-61/D-49 Tree Service. CSLB replaced D-49 with the C-49 Tree and Palm classification for new applicants starting January 1, 2024, and treats the work as the same. If you hold C-49, confirm your workers' comp requirement with CSLB.

Roofing contractors were already under this rule. SB 216 (2022) added concrete, HVAC, asbestos abatement and tree service, effective January 1, 2023. If your license includes one of these classifications and CSLB doesn't receive a valid workers' comp certificate, the classification can be removed from your license, or the license can be suspended, under the rules that apply.

What changes on January 1, 2028

SB 216 also set a date when all licensees, regardless of classification, would need workers' comp. That date was originally January 1, 2026. SB 1455 moved it to January 1, 2028 and kept the no-employee exemption in place until then for every classification except the five above. Under the version of the law that takes effect on January 1, 2028, the only exemption for an active license is for a joint venture with no employees. Inactive licenses don't need a certificate while they are inactive.

SB 1455 also directed CSLB to set up a process, by January 1, 2027, to verify that contractors claiming the exemption actually have no employees. A 2025 law, SB 291, added that the process must include an audit, proof or other evidence, and set minimum civil penalties for licensees found to employ workers without workers' comp. In March 2026, CSLB sent the Legislature proposed exemption criteria. Those are proposals, not current law, so watch CSLB for updates. Contractors filing exemptions should expect more scrutiny.

The details of the 2028 requirement could still be adjusted by future legislation or CSLB rulemaking. Check CSLB's workers' compensation page for the current status.

What this means for you

If you have employees: keep your workers' comp policy active and make sure CSLB has a current certificate. When your policy renews or changes insurers, confirm your insurer files the new certificate.

If you hold C-8, C-20, C-22, C-39 or D-49: you need workers' comp now, even as a solo operator. If you don't have a policy, the classification is at risk.

If you're a solo contractor in another classification filing an exemption: your exemption is still an option until January 1, 2028, as long as you truly have no employees. Use the time to:

• Understand what a minimum workers' comp policy would cost for your classification
• Budget for it at your next license renewal
• Line up a policy before the deadline rather than at the last minute

If you use helpers, family members or 1099 workers: be careful. Under California law, people you pay to help on jobs may be considered employees even if you call them independent contractors. Filing an exemption when you have employees can lead to discipline, including civil penalties, and leaves you exposed if someone is hurt.

Why it matters beyond the license

• Clients and GCs ask for it. Many general contractors and property owners won't let a sub on site without a workers' comp certificate, and may ask for a waiver of subrogation.
• Injuries are expensive. Without coverage, an injured worker's medical bills and lost wages can become your responsibility, and penalties can apply.
• Uninsured subs can show up on your audit. If you hire subcontractors without workers' comp, your own insurer may charge premium for their payroll at audit.

How Capital & Co can help

Capital & Co, based in Los Angeles, works with California contractors on workers' comp for small crews and solo operators. We can review your classification, explain your options and help you get a certificate on file with CSLB once a policy is bound.