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.
