Workers' compensation
What Senate Bill 291 changed for a plumber's workers' compensation filing.
Senate Bill 291, Chapter 455 of the Statutes of 2025, took effect January 1, 2026. It raised the civil penalty for employing workers without coverage, and it told CSLB to build a way to check exemptions. It did not end the solo C-36 exemption. That date is still January 1, 2028. Mainline places workers' compensation from 779 3rd Avenue, Chula Vista. Call 619-420-8600. This page does not show a premium.
Three acts are cause for discipline.
Business and Professions Code section 7125.4 names three of them. Filing an exemption certificate that is false. Employing a person who must be covered after an exemption is on file, without first filing a Certificate of Workers' Compensation Insurance or a Certification of Self-Insurance. Employing a person who must be covered, and failing to maintain coverage for that person.
A truthful exemption for a C-36 with no employees is still a filing CSLB accepts. The new penalty applies when that filing is false, or when the shop has people who must be covered and no coverage is in place. Who can still file is in the 2026 exemption note.
The minimums are $10,000 and $20,000.
For employing workers without maintaining coverage, the minimum civil penalty is $10,000 per violation for a sole owner. It is $20,000 per violation for a partnership, a corporation, a limited liability company, or a tribal business. Additional civil penalties for later violations stop at $30,000 per occurrence.
The qualifier who is responsible for the license under section 7068.1 is also guilty of a misdemeanor for committing those acts, or for failing to prevent them.
CSLB will not renew or reinstate a license that is in violation of this section until the applicant or licensee gives the board a current Certificate of Workers' Compensation Insurance, or a Certification of Self-Insurance, in the business name.
Source: Business and Professions Code section 7125.4, amended by Senate Bill 291, effective January 1, 2026. CSLB described the bill in industry bulletin #25-04, December 29, 2025. Checked October 13, 2026.
CSLB has until January 1, 2027 to show how it will check exemptions.
Section 7125.7 tells the board to establish a process that includes an audit, proof, or another way to get evidence that a licensee with no employees really qualifies. The board has to report that proposed process to the Legislature by January 1, 2027. Bulletin #25-04 also says annual reporting of workers' compensation enforcement data is now required.
Source: Business and Professions Code section 7125.7. Checked October 13, 2026.
The March 2026 report is a proposal.
Registrar David R. Fogt sent the Legislature a report in March 2026. The report proposes a test for who may claim an exemption. Under that proposal, the licensee would have to be an individual owner. A partnership, corporation, limited liability company, or participating tribe would be out. The license could not have a responsible managing employee or a registered home improvement salesperson. The license could not include C-8 Concrete, C-20 Warm-Air Heating, Ventilating and Air-Conditioning, C-22 Asbestos Abatement, C-39 Roofing, C-49 Tree and Palm, or D-49 Tree Service.
The proposal also calls for a signed statement that the licensee understands the requirements and the penalties, a business plan showing why the exemption fits, and a filing fee.
C-36 is not on that classification list. C-49 Tree and Palm is on the proposal. It is not on the list CSLB uses today. Today's closed list is C-8, C-20, C-22, C-39, and C-61/D-49.
The report estimates about 9,000 exemption filings a year and an audit of about 5 percent of them, about 450 audits. It estimates the cost to file and renew at about $500, tied to staffing a Workers' Compensation Insurance Enforcement Unit. That figure is the staff estimate in the report. It is not a charge on CSLB's fee schedule. About 100,000 licensees have an exemption on file, the report says.
The same report states the other path: leave the law as it stands, so workers' compensation is required for licensees beginning January 1, 2028. The proposed test is not the form a plumber files today.
Source: CSLB, SB 291 (Grayson) Workers' Compensation Exemption Report, March 2026. Checked October 13, 2026.
Common questions
What is the workers' compensation penalty under Senate Bill 291?
For employing workers without maintaining coverage, section 7125.4 sets a minimum civil penalty of $10,000 per violation for a sole owner and $20,000 per violation for a partnership, corporation, limited liability company, or tribal business. Additional penalties for later violations can reach $30,000 per occurrence. CSLB will not renew or reinstate the license until a current certificate is on file.
Does a solo C-36 have to drop the exemption in 2026 because of SB 291?
A truthful exemption for a C-36 with no employees remains available through December 31, 2027. Senate Bill 291 raised the penalty for a false exemption and for employing workers without coverage. The tighter test in the March 2026 report is a proposal.
The other two notes.
Why a solo C-36 exemption lasts through 2027. The July 1, 2026 fine change, and the home-improvement contract rules.