News & Resources

Senate Bill No. 216 – Concrete, Asbestos Abatement, Heating and Air Conditioning, and Tree Service Contractors Now Required To Carry Workers’ Compensation Insurance Even If They Don’t Have Employees

Feb 14, 2023 | Legal Developments and News

Senate Bill No. 216 (“SB 216”) went into effect as of January 1, 2023, amending section 7125 of the Business and Professions Code concerning workers’ compensation insurance requirements. Previously, section 7125 required only roofing contractors (C-39 license) to carry workers’ compensation insurance despite not having any employees. SB 216 requires concrete contractors (C-8 license), HVAC contractors (C-20 license), asbestos abatement contractors (C-22 license), and tree service contractors (D-49 contractors) to maintain workers’ compensation insurance even if they do not have any employees.

After July 1, 2023, the penalties imposed on a contractor from the aforementioned classifications for not having workers’ compensation insurance are:

1) If a contractor has an active license that includes a C–8, C–20, C–22, or D–49 classification in addition to any other classification, then the C–8, C–20, C–22, and/or D–49 classification will be removed, and

2) If the contractor has an active license and had their C–8, C–20, C–22, and/or D–49 classification previously removed, then all of the contractor’s license(s) will be immediately suspended.

An exception to the workers’ compensation insurance requirement exists for joint ventures with no employees who file a certificate of exemption.

As of January 1, 2026, the workers’ compensation requirement and penalty for noncompliance will apply to all contractors, regardless of classification. The same exception will continue to apply for joint ventures.

Moving forward, California community colleges and school districts should take heed and exercise due diligence when awarding projects to contractors with the classifications referenced above. If a district uses a contractor without workers’ compensation insurance, it is possible that said district may be responsible for payment of workers’ compensation claims as the worker’s employer.

For more information about workers’ compensation insurance compliance and how it may affect your district with future projects, please contact an attorney in DWK’s Business, Property, and Construction practice group.

RELATED POSTS

2023 Legislative and Case Law Highlights – K-12 School Districts

2023 Legislative and Case Law Highlights – K-12 School Districts

Countdown to the Bond Part 2 – January 2024

Are You Considering a March or November 2024 Bond Election? Now is the Time to Begin Preparing Your Ballot Measure! Countdown to the Bond is a multi-part series of legal...

Adjusted Bid Thresholds for Contracts Effective January 1, 2024

Effective January 1, 2024, the bid threshold for contracts awarded by school districts competitively bid pursuant to Public Contract Code (PCC) section 20111(a) increased from $109,300 to $114,500 (link available here)....