Under a new California law, certain contractors will be required to carry workers’ compensation insurance coverage beginning 2023, even if they don’t have any employees.
California Governor Gavin Newsom signed SB 216 into law Sept. 30, which will expand in January 2026 to require all other contractors, whether or not they have employees, to have workers’ compensation insurance, according to Business Insurance.
The first group of contractors that will need workers’ compensation coverage beginning July 2023 includes:
- concrete contractors with a C-8 license
- HVAC contractors with a C-20 license
- asbestos abatement contractors with a C-22 license, and
- tree service contractors with a D-49 license.
Law doesn’t apply in certain situations
By January 2026, this will expand to include all contractors, again whether or not they have employees, unless they are organized as a joint venture under Business and Professions Code Section 7029 and have no employees.
This law doesn’t apply to contractors who do not hold the relevant licenses. It also doesn’t apply if a contractor has no employees and files a statement with the Contractors State License Board “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.”
The law requires the Contractors State License Board to suspend the license of a contractor if, between July 1, 2023, and Jan. 1, 2026, it finds a contractor had employees and did not have comp coverage.