Senate Bill 291, Chapter 455 of 2025, was approved on October 7, 2025 and took effect January 1, 2026. The page to read is Business and Professions Code section 7125.4. The penalty amounts are written there in plain sentences.

Three acts are cause for discipline. Filing an exemption certificate that is false. Putting someone to work after an exemption without first filing a certificate of insurance. Employing a person who is supposed to be covered, and not keeping coverage on them. A sole owner found to have employed workers without maintaining workers’ compensation coverage faces a minimum civil penalty of $10,000 per violation. A partnership, corporation, limited liability company, or tribal business faces $20,000 per violation. Later violations can add more, not to exceed $30,000 per occurrence.

The qualifier on the license can be charged with a misdemeanor for committing those acts or for failing to prevent them. The board will not renew or reinstate a license that is in violation of this section until the applicant files a current certificate of workers’ compensation insurance, or a certification of self-insurance, in the business name.

SB 291 does not move the date when every license needs a policy. A licensee with no employees, outside the classifications that already require one, can still use an exemption through December 31, 2027. We covered that deadline here. What the bill adds now is the fine, and a check on the exemption. Section 7125.7 tells the Contractors State License Board to build a way to verify that a no-employee exemption is real, including an audit or other proof, and to report that process to the Legislature by January 1, 2027.

If you have a helper or a payroll, do not wait for 2028. The penalty in section 7125.4 is already the law.

If this is on your renewal, call the office at (619) 420-8600 or start a quote. We will tell you what the market will actually write.

Sources: Business and Professions Code section 7125.4; Business and Professions Code section 7125.7; SB 291, Chapter 455, Statutes of 2025.