Breaking News: CSLB is Increasing Scrutiny of Workers’ Comp Exemptions

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Did you know that the CSLB is increasing their scrutiny of licensees with exemptions that allow them to avoid purchasing Workers’ Compensation insurance? As the CSLB takes a closer look at these WC exemptions, they will be keeping an eye on contractors that have classifications that typically require more than one person to complete a job.

Recent Changes in WC Compliance

The CSLB had a meeting in December, and during this meeting they agreed that a focus needed to be placed on bringing more compliance in the industry. The goal is to ensure that contractors are maintaining the necessary WC insurance coverage, to ensure that the exemptions aren’t being used incorrectly.

At this point, it looks like there are too many companies applying for the WC exceptions, especially considering the nature of the contracting industry. Over 50% of all licensed contracting companies have filed for Workers’ Compensation exemptions.

Requirements to Purchase a Workers’ Compensation Insurance Policy

Section 7125 of the Business and Professions Code requires that a WC insurance policy is purchased by contractors, and then proof of the insurance needs to be submitted to CSLB. There are several times when the proof of insurance needs to be provided:

  • A new contractor’s license is issued
  • Renewal of a license
  • Reactivating an inactive license

If your contracting business doesn’t have any employees, then it is not necessary to submit proof of WC insurance, unless you are a roofing contractor.

Ensure that Your WC Policy is in Place

Since the CSLB will be ramping up efforts to review WC exemptions, it is important to ensure that you have the right WC policy in place for your contracting business. Random checks will be performed to evaluate if companies with WC exemptions are really qualified for the exemption. If you have been granted a WC exemption, then it is likely that you will receive a letter outlining the requirements of WC insurance if you have employees.

If violations are discovered, then the CSLB will work with other agencies to enforce the requirements. The overall goal is to increase the compliance among contractors, to ensure that workers are protected when they are on the job.

Are you interested in learning more about getting Workers’ Compensation insurance for your contracting company? Contact us at Cal-State Contractors License Service, and we can help you get the workers compensation insurance that you need. At the same time, if you have workers compensation insurance and it is not showing with the CSLB we can assist with the process of submitting your proof of WC insurance to go with your license, so that you are in compliance. Contact our team for more information about the many services that we offer: 1-800-454-2776

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