SB 216: Expanding Workers’ Compensation for Contractors
In 2022, California passed Senate Bill 216 (SB 216), a law that is reshaping workers’ compensation requirements for contractors across the state. Historically, only contractors with employees were required to carry workers’ compensation insurance, leaving many sole proprietors exempt from the mandate. SB 216 changes that by gradually expanding coverage to all licensed contractors, regardless of whether or not they employ others. The goal is to ensure greater protection for workers and consistency across the contracting industry.
Phased Implementation: 2023 to 2026
SB 216 takes a phased approach to implementation. The first phase began in 2023, requiring workers’ compensation coverage for contractors in higher-risk trades, including concrete (C-8), HVAC (C-20), asbestos abatement (C-22), and tree service (D-49). By January 1, 2026, Phase 2 of the law will take effect, extending the requirement to all remaining contractor classifications. This means that by 2026, every licensed contractor in California—whether a sole proprietor, partnership, or corporation—must either carry a valid workers’ compensation policy or file a certificate of exemption with the Contractors State License Board (CSLB).
Compliance, Exemptions, and Next Steps
For contractors without employees, there is an exemption process available. They can submit a certificate of exemption to the CSLB to remain in good standing without purchasing coverage. However, maintaining compliance is critical, as failing to keep insurance or exemption status current with the CSLB can result in license suspension or other penalties. If you’re unsure how SB 216 applies to your business, or you’d like to review your workers’ compensation options, call us today to discuss your coverage needs. Our team at Allco is here to help contractors navigate these changes and ensure you stay compliant while protecting your business.