As of 19 October 2026. Every fact on this page links to the California statute or the Contractors State License Board (CSLB) page it comes from. California only.
The short version: If your license has no employees, no RME qualifier and none of five specific classifications, you can file a signed exemption with CSLB instead of a workers' comp certificate. You file it online or on CSLB's form. You recertify it at every renewal. It stops being valid the moment you employ someone. From 1 January 2028 the exemption ends for everyone except joint ventures with no employees.
TL;DR
- The exemption is a signed statement that you employ no one in a way that would make you subject to California's workers' comp laws. (B&P § 7125)
- You can't file it if you have employees (including Home Improvement Salespersons), if your qualifier is a Responsible Managing Employee, or if the license has a C-8, C-20, C-22, C-39 or C-61/D-49 classification. (CSLB; CSLB)
- You recertify it at every renewal, or the license is not renewed. (B&P § 7125.5)
- From 1 January 2028, under SB 1455, only joint ventures with no employees can be exempt. (B&P § 7125; SB 1455)
Who can file an exemption
The law exempts an applicant or licensee who has no employees and files a statement with CSLB certifying that they do not employ anyone in a way that makes them subject to California's workers' compensation laws. (B&P § 7125) CSLB lists the cases where you cannot be exempt: (CSLB; CSLB)
- You employ anyone in a way that is subject to California workers' compensation law, and that includes Home Improvement Salespersons.
- The license is qualified by a Responsible Managing Employee (RME).
- The license has a C-8 Concrete, C-20 Warm-Air Heating, Ventilating and Air-Conditioning, C-22 Asbestos Abatement, C-39 Roofing, or C-61/D-49 Tree Service classification. These must have a workers' comp certificate or self-insurance certification on file whether or not they have employees.
Only an Owner, Partner, Officer, Director, Member or Manager on the license or application can submit the exemption. (CSLB)
How to file it
- Online (Easy-Fill). CSLB's online submission walks through the required fields and updates the license record automatically. Don't send CSLB copies afterwards: duplicates delay processing. You have to finish in one sitting, because a partly filled form can't be saved. (CSLB)
- On paper. Download the Exemption from Workers' Compensation form, or order it as form #32, then sign it and send it to CSLB headquarters. A printed form without a signature is returned for correction. (CSLB; CSLB)
- Out-of-state licensees whose employees work under another state's workers' comp laws can't submit online. They print the exemption, sign it, and send it with their home-state certificate of insurance to workerscomp@cslb.ca.gov or by mail. (CSLB; CSLB)
The statement is made under penalty of perjury. (CSLB) Filing a false exemption is grounds for discipline. The same section sets minimum civil penalties for a licensee found to have employed workers without coverage: $10,000 per violation for a sole owner and $20,000 for an entity, in the text as amended by SB 291 and in effect since 1 January 2026. (B&P § 7125.4; SB 291)
Keeping it valid at renewal
At each renewal, a licensee with an exemption on file must either recertify it on the renewal form or provide a current workers' comp or self-insurance certificate. The license isn't renewed until one of the two is done. If the missing document arrives within 30 days of CSLB's rejection notice, the renewal can be made retroactive. (B&P § 7125.5)
When you hire someone
An exemption is valid only while there are no employees. Once you employ anyone in a way that is subject to California's workers' comp laws, the exemption on file is no longer valid and you must submit proof of coverage. CSLB says the proof must reach its headquarters within 90 days of the hire. (CSLB)
The 90 days is CSLB's deadline for filing. It does not give you 90 days without coverage. The Labor Code requires every employer to secure the payment of compensation. (Lab. Code § 3700) The licensing law separately treats hiring someone after filing an exemption, without first filing a certificate, as grounds for discipline. (B&P § 7125.4)
What is changing
- By 1 January 2027: CSLB must set up a process to verify that applicants and licensees who claim the exemption really have no employees. The process may include an audit or proof. SB 291 also requires CSLB to report its proposed process to the Legislature by that date. (SB 1455; SB 291)
- From 1 January 2028: the version of section 7125 enacted by SB 1455 takes effect. Every licensee will need a workers' comp certificate or self-insurance certification. The only exception is a joint venture with no employees. (B&P § 7125; SB 1455) The date is 2028. The 2026 date that many pages still repeat was moved by SB 1455.
A license that is inactive on CSLB's records needs no certificate or exemption while it stays inactive. (B&P § 7125)
Sources
Every statement above is taken from these primary sources, each read on 19 October 2026. Laws change: check the source before you rely on a date or an amount.
- Business and Professions Code section 7125 (current version, and the version operative 1 January 2028). Read 19 October 2026.
- Business and Professions Code section 7125.4 (as amended by SB 291, Stats. 2025, ch. 455). Read 19 October 2026.
- Business and Professions Code section 7125.5. Read 19 October 2026.
- SB 1455 (Ashby), Stats. 2024, ch. 485, chaptered text. Read 19 October 2026.
- SB 291 (Grayson), Stats. 2025, ch. 455, chaptered text. Read 19 October 2026.
- California Labor Code section 3700. Read 19 October 2026.
- CSLB, Workers' Compensation Requirements. Read 19 October 2026.
- CSLB, Exemption from Workers' Compensation Insurance (online submission). Read 19 October 2026.