California, October 10, 2025
News Summary
California has enacted Senate Bill 291, a major reform in workers’ compensation compliance. Contractors must now hold a Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance. The bill imposes substantial civil penalties for non-compliance and mandates a verification process by January 1, 2027. This legislation aims to enhance accountability and ensure that proper protections are in place within the construction industry.
California has taken significant steps to strengthen workers’ compensation compliance with the recent passage of Senate Bill 291. Enrolled by the California Legislature on September 12, the bill was introduced by Senator Tim Grayson and passed by both the Senate and Assembly in early September. The legislation amends several sections of the state’s Business and Professions Code, marking a critical reform in contractor regulations.
Under the new bill, all contractors operating in California are now required to maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license. This amendment eliminates the ability for contractors without employees to claim exemption from this requirement under certain conditions. Notably, exemption clauses were previously set to be revised in 2028, allowing only joint ventures without employees to claim exemption; however, SB 291 accelerates this process and strengthens oversight of compliance.
The bill mandates the Contractors State License Board to create a verification process for exemption claims by January 1, 2027. This process will include audits, proof, or other means to acquire evidence to ensure compliance. The Contractors State License Board will also be responsible for reporting its proposed verification process to the Legislature by the same date.
In addition, Senate Bill 291 imposes increased civil penalties for contractors employing workers without coverage. Sole owner licensees who fail to maintain coverage will face a minimum civil penalty of $10,000 per violation, while partnerships, corporations, LLCs, or tribal business licensees will incur a minimum penalty of $20,000 per violation. For subsequent violations, penalties can escalate to as much as $30,000 per occurrence. The board has also been granted the authority to deny renewal or reinstatement of a license until valid workers’ comp insurance is provided.
The legislation also calls for the Contractors State License Board to submit an annual report to the Legislature detailing enforcement actions related to workers’ compensation exemptions. These legislative changes are designed to enhance scrutiny on exemption claims, ensuring that only eligible contractors are allowed exemption, thereby supporting accountability in the industry.
Insurance professionals will need to be more vigilant, as they must provide greater attention to clients’ documentation and compliance with the newly-established rigorous standards. The increased penalties are intended as a deterrent against contractors neglecting their insurance obligations. It is essential to note that SB 291 focuses solely on workers’ compensation insurance, not on health or life insurance.
As the bill has been fully enrolled, it is set for implementation as outlined in its provisions, reinforcing California’s commitment to strengthening workforce protections and compliance in the construction industry.
FAQ
What is Senate Bill 291?
Senate Bill 291 is a new law passed in California that strengthens workers’ compensation compliance and increases penalties for contractors who do not meet insurance requirements.
What is the effective date for the verification process of exemption claims?
The verification process for exemption claims must be created by the Contractors State License Board by January 1, 2027.
What are the new penalties for contractors?
Sole owner licensees will face a minimum civil penalty of $10,000 per violation, while partnerships, corporations, LLCs, or tribal business licensees will face a minimum of $20,000 per violation. Subsequent violations can incur additional penalties of up to $30,000 per occurrence.
Is a license renewal affected by workers’ compensation insurance?
Yes, the Contractors State License Board cannot renew or reinstate a license until valid workers’ compensation insurance is provided.
What are the reporting requirements under SB 291?
The Contractors State License Board must report annually to the Legislature on enforcement actions related to workers’ compensation exemptions.
Key Features of Senate Bill 291
| Feature | Description |
|---|---|
| Enactment Date | September 12, 2023 |
| Sponsor | Senator Tim Grayson |
| Verification Process Deadline | January 1, 2027 |
| Penalties for Non-Compliance | Sole owner licensees: $10,000; others: $20,000; subsequent violations: up to $30,000 |
| License Renewal Requirement | Valid workers’ compensation insurance must be provided |
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
- Business Insurance: California Court Says Board Lacks Jurisdiction Over Claim from Former NFL Player
- Property Casualty 360: How New California Workers’ Comp Bill Could Impact Aging Workforce
- Wikipedia: Workers’ Compensation
- Google Search: California Workers’ Compensation
- Google Scholar: California Workers’ Compensation
- Encyclopedia Britannica: Workers’ Compensation
- Google News: California Workers’ Compensation
Author: STAFF HERE COSTA MESA WRITER
COSTA MESA STAFF WRITER The COSTA MESA STAFF WRITER represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange 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 the OC Fair, Concerts in the Park, and Fish Fry. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Boys & Girls Clubs of Central Orange Coast, plus leading businesses in retail, fashion, and technology that power the local economy such as Vans, Experian, and South Coast Plaza. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
