California, October 10, 2025
News Summary
California has enacted Senate Bill 291, which enhances compliance and increases penalties for contractors who fail to adhere to workers’ compensation insurance regulations. The law, effective from 2027, requires all contractors to maintain valid insurance to hold a license and includes stringent verification processes for exemption claims. Sole proprietors face penalties of $10,000 per violation, while businesses may incur higher fines. This legislation aims to protect workers by ensuring fair practices within the contracting industry.
California has enacted Senate Bill 291, designed to enhance compliance and increase penalties for contractors failing to adhere to workers’ compensation insurance regulations. The law was enrolled by the California Legislature on September 12, following its passage through both the Senate and Assembly in early September. Introduced by Senator Tim Grayson, this legislation amends several sections of the state’s Business and Professions Code.
Under Senate Bill 291, contractors in California are now required to maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance in order to hold a contractor’s license. Previously, contractors without employees could claim exemption from this requirement under specific conditions. These exemptions were scheduled to change in 2028, allowing only joint ventures without employees to claim exemption.
The new law mandates that the Contractors State License Board establish a verification process to scrutinize exemption claims by January 1, 2027. This verification process is expected to include methods such as audits and the collection of evidence to confirm eligibility for exemption. Furthermore, the board is obligated to present its proposed verification process to the Legislature by the same date.
One of the key changes introduced by Senate Bill 291 is the increase in civil penalties for contractors employing workers without appropriate coverage. Sole proprietors failing to maintain coverage will face a minimum civil penalty of $10,000 per violation. In contrast, partnerships, corporations, limited liability companies (LLCs), or tribal business licensees will incur a minimum penalty of $20,000 per violation. Additionally, for subsequent violations, penalties may rise up to $30,000 per occurrence.
The Contractors State License Board will have the authority to deny the renewal or reinstatement of a license for contractors who do not provide valid workers’ compensation insurance. Furthermore, the board is required to report annually to the Legislature concerning its enforcement actions related to workers’ compensation exemptions.
These legislative changes aim to bolster oversight on contractor compliance with workers’ compensation insurance requirements. By enhancing scrutiny on exemption claims, the law seeks to ensure that only those contractors truly eligible for exemption are able to claim it. Insurance professionals will need to adapt by providing greater attention to clients’ documentation and compliance, to meet the new rigorous standards.
While Senate Bill 291 focuses explicitly on workers’ compensation insurance, it does not address health or life insurance requirements for contractors. The law has been fully enrolled and is set for implementation in accordance with the specified provisions.
Key Features of Senate Bill 291
- Requires contractors to maintain valid workers’ compensation insurance to hold a license.
- Establishes a verification process for exemption claims by January 1, 2027.
- Increases penalties for contractors without coverage, ranging from $10,000 to $30,000.
- Prevents license renewal until valid insurance is provided.
Conclusion
Senate Bill 291 is a significant step towards strengthening the enforcement of workers’ compensation insurance compliance among contractors in California. The measures outlined in the legislation reflect a commitment to protect workers and ensure fair operating practices within the contracting industry.
FAQ
What is Senate Bill 291?
California has passed Senate Bill 291, designed to enhance compliance and increase penalties for contractors failing to adhere to workers’ compensation insurance regulations.
When was Senate Bill 291 enrolled?
The bill was enrolled by the California Legislature on September 12.
What are the penalties for contractors under SB 291?
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 face a minimum penalty of $20,000 per violation.
Key Features Chart
| Feature | Description |
|---|---|
| License Requirement | Contractors must have a valid workers’ compensation insurance or self-insurance certification. |
| Exemption Process | A verification process for exemption claims will be established by January 1, 2027. |
| Penalty Structure | Minimum fines of $10,000 for sole proprietors and $20,000 for businesses without coverage. |
| License Renewal | Licenses cannot be renewed without valid workers’ compensation insurance. |
Deeper Dive: News & Info About This Topic
- Insurance Business: California Cracks Down on Contractor Workers’ Comp Insurance Violations
- Google Search: California Contractor Workers’ Compensation Insurance
- CBS 8: Court Finds Atlanta Falcons Not Responsible for Workers’ Comp Claim
- Wikipedia: Workers’ Compensation
- Bloomberg Law: Ex-Rams Player Denied California Workers’ Compensation Claim
- Google Scholar: California Workers Compensation Law
- Business Insurance: California Court Says Board Lacks Jurisdiction Over Claim from Former NFL Player
- Google News: California Senate Bill 291
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LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of 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 from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
