California, October 10, 2025
News Summary
California has enacted Senate Bill 291, aimed at strengthening compliance with workers’ compensation regulations among contractors. This new legislation, introduced by Senator Tim Grayson, enforces mandatory insurance coverage for contractors, imposing strict penalties for violations. The bill mandates the Contractors State License Board to create a verification process for exemption claims and prohibits license renewal without valid insurance. With a focus on accountability, SB 291 seeks to ensure that only eligible contractors benefit from exemptions, thereby improving oversight in the industry.
California Strengthens Workers’ Compensation Compliance with Senate Bill 291
California has enacted Senate Bill 291, a significant legislative measure designed to enhance compliance with workers’ compensation regulations among contractors. The bill was enrolled by the California Legislature on September 12 and initiates stringent measures aimed at ensuring that contractors maintain the necessary insurance coverage for their employees.
Introduced by Senator Tim Grayson, Senate Bill 291 amends several sections of the state’s Business and Professions Code. It received approval from both the Senate and Assembly in early September, paving the way for its implementation. Key changes require contractors in California to maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license. This is vital, as contractors had previously been able to claim exemption from this mandate under certain conditions if they had no employees.
This exemption was set to evolve in 2028, permitting only joint ventures without employees to claim exemption. Senate Bill 291 now mandates that the Contractors State License Board develop a verification process to assess claims for exemption by January 1, 2027. This verification process must include audits, proof, or other necessary means to procure evidence demonstrating compliance.
The bill introduces stricter penalties for violations concerning employees without coverage. Specifically, it establishes a minimum civil penalty of $10,000 per violation for sole owner licensees who fail to maintain coverage. Partnerships, corporations, limited liability companies (LLCs), or tribal business licensees face a more substantial minimum penalty of $20,000 per violation. Individuals or entities committing subsequent violations may incur additional penalties reaching up to $30,000 per occurrence.
Furthermore, the Contractors State License Board is now prohibited from renewing or reinstating any license until valid workers’ compensation insurance is presented. To maintain transparency, the board is also required to report annually to the Legislature regarding enforcement actions taken in relation to workers’ compensation exemptions.
The legislative goal of SB 291 is to fortify oversight concerning contractor compliance with mandated workers’ compensation insurance. Emphasis is particularly placed on improving scrutiny around exemption claims, which ensures that only truly eligible contractors can benefit from such exemptions. Consequently, insurance professionals will need to devote greater attention to their clients’ documentation and compliance efforts, while increased penalties are expected to deter neglecting insurance requirements effectively.
It is important to note that SB 291 focuses exclusively on workers’ compensation insurance without extending to health or life insurance matters. With the bill having been fully enrolled, its provisions are set for implementation as detailed in the legislation.
Key Features of Senate Bill 291
| Feature | Details |
|---|---|
| Verification Process | To be developed by the Contractors State License Board by January 1, 2027. |
| Penalty for Sole Owners | Minimum civil penalty of $10,000 per violation. |
| Penalty for Corporations/LLCs | Minimum civil penalty of $20,000 per violation. |
| Subsequent Violations | Additional penalties up to $30,000 per occurrence. |
| License Renewal | No renewal or reinstatement until valid workers’ comp insurance is provided. |
| Annual Reporting | Contractors State License Board must report annually to the Legislature. |
FAQ
What is Senate Bill 291?
Senate Bill 291 is a legislative measure enacted in California to strengthen compliance with workers’ compensation insurance regulations among contractors.
When was Senate Bill 291 enrolled?
Senate Bill 291 was enrolled by the California Legislature on September 12.
Who introduced Senate Bill 291?
Senate Bill 291 was introduced by Senator Tim Grayson.
What does Senate Bill 291 require contractors to maintain?
Contractors in California must maintain a valid Certificate of Workers’ Compensation Insurance or a Certification of Self-Insurance to hold a license.
What are the penalties for not maintaining coverage under Senate Bill 291?
Sole owner licensees will face a minimum civil penalty of $10,000 per violation, while partnerships, corporations, LLCs, or tribal business licensees face a minimum penalty of $20,000 per violation. Subsequent violations can incur additional penalties up to $30,000 per occurrence.
Deeper Dive: News & Info About This Topic
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Author: STAFF HERE BEVERLY HILLS WRITER
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