Via Rapida Commercial Insurance Blog · April 2026
Workers Comp California — What SB 216 Changes for Every Contractor
If you are a sole proprietor contractor in California operating with a workers comp exemption, that exemption is going away. SB 216 makes workers compensation insurance mandatory for ALL licensed contractors by 2028 — even if you have zero employees. Here is what you need to know and what to do now.
Workers compensation insurance has been required in California for any business with employees since 1913. But there has always been an exception: sole proprietors and certain partners with no employees could file a Certificate of Exemption with the Contractors State License Board (CSLB) and legally operate without workers comp coverage.
SB 216 eliminates that exemption. By 2028, every licensed contractor in California — general contractors, electricians, plumbers, landscapers, roofers, painters, HVAC technicians, and every other CSLB-licensed trade — must carry workers compensation insurance. No exceptions.
This is the biggest change to California contractor insurance requirements in over a century, and it will affect an estimated 200,000+ sole proprietor contractors statewide.
What SB 216 Actually Says
SB 216 amends California Labor Code Section 3700 to remove the sole proprietor exemption for contractors. Here is what changes:
- Current law: Contractors with no employees can file a Certificate of Exemption (form exempt) with the CSLB, exempting them from the workers comp requirement.
- Under SB 216: The Certificate of Exemption option is eliminated. All CSLB-licensed contractors must maintain active workers compensation insurance to keep their license active.
- Timeline: The law phases in by 2028. Contractors should have coverage in place by January 1, 2028.
- Enforcement: The CSLB will verify workers comp coverage as part of license renewal. No coverage = no license renewal.
Why SB 216 Was Passed
The exemption was being abused. Here is how:
- Misclassification. General contractors were hiring sole proprietor "subcontractors" specifically because they had exemptions, avoiding the cost of covering them under the GC's workers comp policy. When those subcontractors got injured, they had no coverage.
- Unfair competition. Contractors operating without workers comp had a significant cost advantage over those who carried it. This undercut contractors who followed the law.
- Medical cost shifting. When uninsured sole proprietors got injured on job sites, their medical costs were absorbed by Medi-Cal, emergency rooms, or personal bankruptcy — costs that ultimately fall on taxpayers.
- Worker vulnerability. Many sole proprietors filing exemptions were actually working as de facto employees for larger contractors, with no bargaining power and no injury protection.
Who Is Affected?
If you hold any of the following CSLB license classifications and currently operate with a workers comp exemption, SB 216 affects you:
| License | Trade |
|---|
| A | General Engineering |
| B | General Building |
| C-7 | Low Voltage Systems |
| C-10 | Electrical |
| C-20 | HVAC |
| C-27 | Landscaping |
| C-33 | Painting |
| C-36 | Plumbing |
| C-39 | Roofing |
| C-46 | Solar |
| C-54 | Tile |
| All other C-classifications | All specialty trades |
If you have employees already and carry workers comp, SB 216 does not change anything for you — you are already in compliance.
How Much Does Workers Comp Cost?
Workers comp premiums are based on three factors: your trade (class code), your payroll, and your experience modification factor (E-mod). For sole proprietors, the state assigns a minimum payroll amount.
| Trade | Approx. Annual Cost (Sole Proprietor) |
|---|
| Painting (C-33) | $1,500 – $3,000 |
| Landscaping (C-27) | $2,000 – $4,000 |
| Plumbing (C-36) | $2,500 – $5,000 |
| Electrical (C-10) | $2,500 – $5,000 |
| General Building (B) | $3,000 – $6,000 |
| Roofing (C-39) | $5,000 – $10,000 |
These are estimates for sole proprietors with no employees and a minimum payroll assignment. Actual costs vary by carrier and experience modifier.
Hartford offers pay-as-you-go billing, which means your premium adjusts based on actual payroll each pay period rather than a lump-sum estimate at the start of the year. This helps cash flow for small contractors.
Need workers comp coverage? Via Rapida Services is an authorized Hartford agent. Hartford, rated A+ (Superior) by AM Best, is one of the largest workers comp writers in California with pay-as-you-go billing. Get ahead of SB 216 — get covered now.
Call 209-670-1556
Business Insurance
What Happens If You Do Not Comply?
Operating without workers comp when required is not just a civil violation in California — it is a criminal offense:
- Criminal penalty: Up to one year in county jail and/or a fine of up to $100,000 (Labor Code 3700.5)
- Civil penalty: The DIR can issue a stop work order and a penalty of up to $10,000 per employee
- CSLB action: License suspension or revocation
- Personal liability: You are personally liable for all medical bills, lost wages, and disability benefits for any injured worker
- No defense: In a civil lawsuit by an injured worker, your lack of workers comp coverage eliminates several affirmative defenses you would otherwise have
The Benefits of Getting Workers Comp Now
Instead of viewing SB 216 as a burden, consider the advantages of having workers comp coverage:
- You can bid on bigger jobs. General contractors and commercial clients require proof of workers comp before they will hire you. Without it, you are locked out of the most profitable work.
- You protect your personal assets. A job site injury without workers comp means your personal savings, home equity, and vehicles are at risk in a lawsuit.
- You get medical coverage for job injuries. A broken arm on a job site costs $10,000-$30,000 out of pocket without insurance. Workers comp covers it.
- You level the playing field. When all contractors carry workers comp, no one has an unfair cost advantage from skipping coverage.
- You get a COI. General contractors need your Certificate of Insurance before you start work. Having workers comp lets you provide that immediately.
How to Get Workers Comp Coverage
- Determine your class code. Your CSLB license classification maps to a workers comp class code. Your agent will identify the right code.
- Estimate your payroll. For sole proprietors, the state sets a minimum payroll. For businesses with employees, report actual payroll.
- Get quotes. Call Via Rapida at 209-670-1556. We submit to Hartford and other carriers to find the best rate for your trade.
- Bind coverage. Once you accept a quote, coverage can start the same day. You receive a Certificate of Insurance immediately.
- Set up pay-as-you-go. Hartford's pay-as-you-go program adjusts your premium with each payroll cycle — no large upfront payment required.
Frequently Asked Questions
What is SB 216?
SB 216 eliminates the workers compensation insurance exemption for sole proprietor contractors in California. By 2028, all licensed contractors must carry workers comp regardless of whether they have employees.
When does SB 216 take effect?
SB 216 phases in by 2028. Contractors should plan to have workers comp coverage in place no later than January 1, 2028.
How much does workers comp cost for a sole proprietor?
Typically $2,000 to $6,000 per year depending on your trade. Higher-risk trades like roofing pay more. Lower-risk trades like painting pay less.
What happens if I don't have workers comp and someone gets hurt?
Operating without required workers comp is a criminal offense in California — up to one year in jail and $100,000 fine. You are also personally liable for all medical bills and lost wages.
Does workers comp cover the business owner?
For sole proprietors, coverage for yourself is currently optional. Under SB 216 you will need the policy, but owner coverage may remain elective. Many contractors choose to cover themselves because a job injury without coverage is financially devastating.
Does Hartford write workers comp in California?
Yes. Hartford, rated A+ (Superior) by AM Best, is one of the largest workers comp insurers in California with pay-as-you-go billing. Via Rapida Services is an authorized Hartford agent.