The Workers' Comp Exemption California Plumbers Are About to Lose

TL;DR: California’s current workers’ comp exemption for solo plumbers ends January 1, 2028. Unless a new law passes, every active CSLB license, including C-36 Plumbing, must have workers’ comp or self-insurance on file, even with no employees.

Today, a California plumber with no employees can file an exemption with the Contractors State License Board instead of buying workers’ comp. That changes on January 1, 2028.

From that date, every active CSLB license must have a Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance on file. It does not matter whether the contractor has employees. It does not matter which classification appears on the license. C-36 Plumbing is included.

The current rule comes from Business and Professions Code section 7125. CSLB requires proof of coverage to issue, reinstate, reactivate, renew or keep a license active. A licensee with no employees can avoid that requirement by filing an exemption.

C-36 is not one of the classifications excluded from the exemption today. The excluded classifications are C-8 Concrete, C-20 Warm-Air Heating, Ventilating and Air-Conditioning, C-22 Asbestos Abatement, C-39 Roofing and D-49 Tree Service.

CSLB’s page says section 7125 is “Repealed effective January 1, 2028.” The statute remains in effect only until that date unless a later law extends it.

Ray thought the exemption would always be there

Ray is a composite example. He runs a one-truck plumbing shop in the Central Valley. He has no employees and has filed the no-employee exemption at every renewal for years.

He assumed it would always be available. He only heard about January 1, 2028 when his insurance agent mentioned it while renewing his truck policy.

That is how many solo owners will find out. The exemption is still available today, so the change can feel distant. It is not distant if your license renewal comes after January 1, 2028.

If your license is inactive on CSLB’s records, current law does not require a certificate or exemption while it remains inactive. That does not change the rule for an active license.

If you are reviewing your broader insurance setup, see what insurance does a plumbing business need. Workers’ comp is only one part of that conversation.

SB 216 started the change, and SB 1455 moved the deadline

SB 216, authored by Dodd in 2022, required workers’ comp for C-8, C-20, C-22 and D-49 contractors regardless of whether they had employees. That requirement began January 1, 2023. Roofers, classified as C-39, already had to carry it.

SB 216 also set January 1, 2026 as the date when the requirement would apply to all contractors.

That date did not hold. SB 1455, authored by Ashby and listed as Chapter 485, Statutes of 2024, extended the all-licensee date to January 1, 2028.

CSLB’s March 2026 report to the Legislature repeats the current rule plainly: “Under current law, all licensed contractors must have proof of workers’ compensation insurance by January 1, 2028, even if they have no employees.”

The report was required by SB 291, authored by Grayson and listed as Chapter 455, Statutes of 2025. SB 291 also increased penalties for workers’ comp violations. Separately, SB 779 raised CSLB minimum civil penalties beginning July 1, 2026. Fines for unlicensed activity start at $1,500.

CSLB proposed an exemption, but the proposal is not law

CSLB’s March 2026 report proposes a new exemption process. It does not create one.

Under the proposal, the licensee would have to be an individual owner. Partnerships, corporations, LLCs and tribes would not qualify. The license could not have a responsible managing employee or a registered home improvement salesperson. The license also could not hold C-8, C-20, C-22, C-39, C-49 or D-49.

The applicant would sign an attestation about workers’ comp rules and penalties. The applicant would submit a business plan showing why the exemption applies. The applicant would pay a filing or recertification fee.

CSLB estimated that fee at about $500 to file and renew. It would be charged at initial licensure and at each two-year renewal.

CSLB also proposed auditing about 5 percent of exemption filers each year, or about 450 audits. It would check internet and social media to confirm the applicant has no employees. If someone claiming the exemption had employees, CSLB could pursue discipline or a criminal referral.

The report says about 100,000 licensees currently have a workers’ comp exemption on file. CSLB warned that some contractors might let their licenses lapse rather than pay for insurance they believe they do not need, then possibly work unlicensed. It estimated that if 10 percent of exemption holders did not renew, CSLB could lose about $8 million a year.

The alternative named in the report is the status quo: workers’ comp for all licensees beginning January 1, 2028. CSLB said that would “ensure all workers are protected and prevent any unfair business advantage” for contractors claiming the exemption.

A new exemption would require a new law. Until that happens, January 1, 2028 remains the date in the statute.

Put the insurance question on your renewal calendar now

If you have employees, nothing changes. California law already requires employers, including contractors, to carry workers’ comp with even one employee.

If you work solo, take these steps:

• Look up your license on CSLB’s site. See whether the record shows a certificate or an exemption.
• Ask your insurance agent for a workers’ comp quote well before your first renewal after January 1, 2028. Do not wait for the renewal notice.
• Make sure the business name on the policy matches the license exactly.
• Confirm that the certificate comes from an insurer licensed in California, lists CSLB as certificate holder, shows your license number, and includes the policy number and dates.
• Watch the 2027 legislative session. CSLB’s proposed exemption would need a new law. If it passes, it would still require a fee and paperwork, and only sole owners without an RME would qualify.
• If you are already planning to hire, price workers’ comp into that decision now. When is a one-truck shop ready for a second truck and a hire?

CSLB processes certificates by the date it receives a correct one. Wrong business names, wrong insurer names, wrong policy numbers, a missing CSLB certificate holder listing or an invalid signature can cause rejection. Errors can create a break in license standing.

A solo shop can also keep calls from becoming an office job. Bella, Plumber Secretary’s answering service, picks up calls around the clock, books jobs and sends a call summary by text or email. The Starter plan is $95 per month. You can hear Bella answer at (669) 284-5564. That service does not change your workers’ comp status or your eligibility for any exemption.

Use the next renewal to check your CSLB record, ask your agent for a quote and verify the exact business name on the policy. That gives you a real answer before January 1, 2028 instead of a licensing problem after it.