California, October 10, 2025
News Summary
California has enacted Senate Bill 291, mandating stricter compliance and increased penalties regarding workers’ compensation insurance for contractors. Effective from January 2027, all contractors must maintain valid insurance or certification. The legislation eliminates exemptions for most contractors without employees by 2028 and introduces severe penalties for non-compliance. This aims to enhance oversight and ensure worker protection under the new law introduced by Senator Tim Grayson.
California Enacts Senate Bill 291, Strengthening Workers’ Compensation Compliance and Penalties for Contractors
California has passed Senate Bill 291, a new legislative measure designed to enhance compliance and increase penalties related to workers’ compensation insurance among contractors. The bill was enrolled by the California Legislature on September 12 and was introduced by Senator Tim Grayson. It follows a unanimous approval from both the Senate and Assembly in early September of this year.
Under the newly enacted law, all contractors in California will now be required to maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance in order to hold a license. Previously, contractors without employees could claim exemption from this requirement under certain conditions. However, these exemptions are set to undergo significant changes in 2028 when only joint ventures without employees will be allowed to claim exemption.
Moreover, Senate Bill 291 mandates that the Contractors State License Board creates a verification process for exemption claims by January 1, 2027. This verification process must involve audits, proof, or other reliable means to acquire evidence supporting the claims. Additionally, the Contractors State License Board is required to report its proposed verification process to the Legislature by the same date.
The legislation also brings increased civil penalties for contractors who employ workers without valid coverage. 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. For subsequent violations, contractors can incur additional penalties of up to $30,000 per occurrence.
Furthermore, the Contractors State License Board cannot renew or reinstate a license until there is valid proof of workers’ compensation insurance provided. To maintain oversight, the board must report annually to the Legislature regarding enforcement actions connected to workers’ comp exemptions.
The new legislative changes aim to strengthen oversight of contractor compliance with workers’ compensation insurance. Enhancements in scrutiny on exemption claims are designed to ensure that only those contractors that are legitimately eligible are granted exemptions. Consequently, insurance professionals will need to pay greater attention to their clients’ documentation and compliance with these regulations.
The increased penalties serve as a deterrent against neglecting insurance obligations, ensuring that workers are protected and businesses comply with insurance requirements. It’s critical to note that Senate Bill 291 specifically focuses on workers’ compensation insurance and does not extend to health or life insurance matters. The bill has been fully enrolled and is set for implementation as outlined in its provisions.
Moreover, insurance professionals must prepare for a more rigorous compliance standard under the new law, effectively altering the landscape of contractor responsibilities and oversight in California.
FAQ Section
1. What is Senate Bill 291?
Senate Bill 291 is a new legislative measure in California designed to enhance compliance and increase penalties related to workers’ compensation insurance among contractors.
2. When was Senate Bill 291 enrolled?
Senate Bill 291 was enrolled by the California Legislature on September 12.
3. Who introduced Senate Bill 291?
Senate Bill 291 was introduced by Senator Tim Grayson.
4. What are the main requirements for contractors under the new law?
Contractors in California must maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license.
5. What changes are scheduled for contractors without employees?
Previously, contractors without employees could claim exemption from workers’ compensation insurance requirements, but this will change in 2028 to only allow joint ventures without employees to claim exemption.
6. How will the verification process for exemption claims work?
The Contractors State License Board must create a verification process for exemption claims that includes audits and proof, which is due by January 1, 2027.
7. What are the penalties for not maintaining workers’ compensation insurance?
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 penalty of $20,000 per violation.
8. What is required for license renewal under the new law?
The Contractors State License Board cannot renew or reinstate a license until valid workers’ comp insurance is provided.
9. What must the Contractors State License Board do annually?
The board must report annually to the Legislature on enforcement actions related to workers’ comp exemptions.
10. Does Senate Bill 291 cover health or life insurance?
No, Senate Bill 291 focuses solely on workers’ compensation insurance and does not extend to health or life insurance.
Key Features of Senate Bill 291
| Feature | Description |
|---|---|
| Legislation Date | Enrolled on September 12 |
| Introduced by | Senator Tim Grayson |
| Effective Compliance Date | January 1, 2027 for verification process |
| Minimum Penalty for Sole Owner Licensees | $10,000 for violation |
| Minimum Penalty for Other Licensees | $20,000 for violation |
| Subsequent Violation Penalty | Up to $30,000 per occurrence |
| Annual Reporting Requirement | Required from Contractors State License Board to Legislature |
| Focus Area | Workers’ compensation insurance |
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
- Insurance Journal: California Workers’ Comp Developments
- Wikipedia: Workers’ Compensation
- Google Search: California Workers Compensation
- Google Scholar: California Workers Compensation Law
- Encyclopedia Britannica: Workers’ Compensation
- Google News: California Workers Compensation
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MISSION VIEJO STAFF WRITER The MISSION VIEJO STAFF WRITER represents the experienced team at HEREMissionViejo.com, your go-to source for actionable local news and information in Mission Viejo, 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 Oso Fit 5K Fun Run and Community Health Fair, Walk Against Drugs & Community Fair, and National Night Out. Our coverage extends to key organizations like the Mission Viejo Chamber of Commerce and Providence Mission Hospital Mission Viejo, plus leading businesses in retail and education that power the local economy such as The Shops at Mission Viejo, Capistrano Unified School District, and Amazon Delivery Station. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
