California, October 10, 2025
News Summary
California has passed Senate Bill 291 to enhance compliance and penalties regarding workers’ compensation insurance for contractors. The new law mandates that all contractors must maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to operate. Exemptions will only apply to joint ventures without employees starting in 2028. The bill also introduces stricter civil penalties for non-compliance and requires the Contractors State License Board to establish a verification process by 2027, aiming to improve oversight and insurance adherence.
California has enacted Senate Bill 291, aimed at strengthening compliance and penalties concerning workers’ compensation for contractors. The legislation, which was enrolled by the California Legislature on September 12, was introduced by Senator Tim Grayson and passed both the Senate and Assembly in early September.
Under the new law, contractors in California are required to maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license. Previously, contractors without employees could claim exemption from this requirement under certain conditions, a practice that is set to undergo significant changes by 2028. The upcoming exemptions will only permit joint ventures without employees to make such claims.
The bill mandates the Contractors State License Board to establish a verification process for exemption claims by January 1, 2027. This verification process will require audits, proof, or other methods to obtain evidence regarding the legitimacy of exemption claims. Additionally, the Contractors State License Board is responsible for reporting its proposed verification process to the Legislature by the same date.
Senate Bill 291 has introduced increased civil penalties for contractors who employ workers without the legally required coverage. For instance, sole owner licensees will incur a minimum civil penalty of $10,000 per violation for failing to maintain adequate coverage. In contrast, partnerships, corporations, LLCs, or tribal business licensees will face a minimum penalty of $20,000 per violation. Subsequent violations could result in added penalties, potentially reaching up to $30,000 per occurrence.
Moreover, the Contractors State License Board is prohibited from renewing or reinstating a license until valid workers’ compensation insurance is provided. The board is also required to submit annual reports to the Legislature on enforcement actions related to workers’ compensation exemptions.
The overarching goal of these legislative changes is to enhance oversight of contractor compliance with workers’ compensation insurance, ensuring that only eligible contractors can claim exemptions. This strict approach is expected to compel insurance professionals to pay closer attention to their clients’ documentation and compliance. The increase in penalties serves as a deterrent against neglecting insurance obligations, emphasizing the importance of legally mandated workers’ compensation insurance—not to be confused with health or life insurance coverage.
Senate Bill 291 has been fully enrolled and is on track for implementation as per the guidelines laid out within its provisions, signaling a shift toward more rigorous compliance standards for contractors in California.
FAQ
What is California Senate Bill 291?
California has passed Senate Bill 291, aimed at strengthening compliance and penalties concerning workers’ compensation for contractors.
When was Senate Bill 291 enrolled?
The bill was enrolled by the California Legislature on September 12.
Who introduced Senate Bill 291?
Senate Bill 291 was introduced by Senator Tim Grayson.
What does Senate Bill 291 require from contractors in California?
Contractors in California must maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license.
What changes will occur to exemptions for contractors without employees?
Exemptions were scheduled to change in 2028 to only allow joint ventures without employees to claim exemption.
What is required by January 1, 2027?
SB 291 requires the Contractors State License Board to create a verification process for exemption claims by January 1, 2027. This process must include audits, proof, or other means to acquire evidence.
What are the civil penalties for contractors violating the workers’ compensation mandate?
Sole owner licensees will face a minimum civil penalty of $10,000 per violation for not maintaining coverage, while partnerships, corporations, LLCs, or tribal business licensees will face a minimum penalty of $20,000 per violation.
Will the Contractors State License Board renew or reinstate licenses without insurance?
The Contractors State License Board cannot renew or reinstate a license until valid workers’ comp insurance is provided.
What focus does Senate Bill 291 have regarding insurance?
SB 291 focuses solely on workers’ compensation insurance, not health or life insurance.
Key Features of Senate Bill 291
| Feature | Details |
|---|---|
| Enactment Date | September 12, 2023 |
| Verification Process Requirement | To be established by January 1, 2027 |
| Minimum Penalty for Sole Owners | $10,000 per violation |
| Minimum Penalty for Other Entities | $20,000 per violation |
| Maximum Subsequent Violation Penalty | $30,000 per occurrence |
| Annual Reporting Requirement | Contractors State License Board to report to Legislature |
Deeper Dive: News & Info About This Topic
- Insurance Business: California Cracks Down on Contractor Workers’ Comp Insurance Violations
- CBS 8: Court Finds Atlanta Falcons Not Responsible for Workers’ Comp Claim
- Bloomberg Law: Ex-Rams Player Denied California Workers’ Compensation Claim
- Program Business: California Workers’ Comp Report Examines Functional Restoration Programs
- Wikipedia: Workers’ Compensation
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
