If you’re a concrete, HVAC, asbestos abatement, or tree service contractor, you probably know about SB 216 and its impact on your trade.
SB 216 was signed into law in 2021, but became effective on January 1, 2023, and if you’re a part of
The new law says that contractors with the C-8, C-20, C-22, and D-49 license classifications will be required to have workers’ compensation insurance – even if you don’t have any employees!
That’s right – if you fall into any of these trades, it is now mandatory for you to have workers’ comp insurance in the State of California, as enforced by the CSLB, and the punishments are severe.
Don’t worry though – there’s plenty of time to make sure you comply with the law and continue on with your Class C or Class D license. Here’s all you need to know about SB216 – and how you can stay compliant.
Which Contractors Are Affected by the New Law?
As mentioned earlier, only certain Class C and Class D contractor license classifications are affected by SB 216.
These classifications include:
- C-8: Concrete
- C-20: Warm-Air Heating, Ventilating and Air-Conditioning
- C-22: Asbestos Abatement
- D-49: Tree Service
What is Workers’ Compensation Insurance?
Workers’ compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill as a direct result of their job.
In California, employers are required to carry workers’ compensation insurance for their employees. The coverage includes medical expenses, lost wages, and other benefits.
How Much Workers’ Compensation Insurance Coverage is Required?
The amount of workers’ compensation insurance coverage, as outlined in the CSLB bulletin from November of last year, says that “for every $100 in payroll, a contractor must have $1.57 in workers’ compensation insurance coverage.”
If you’re a solo contractor, the math is easy. For example, if you make $10,000 a month, you’d have to cover $1,570 in workers compensation. That doesn’t mean you’re paying $1,570 per month, only that you need that much coverage. The cost of monthly coverage is a fraction of the actual coverage amount.
When Does SB 216 Go Into Effect And What Happens If You’re Caught Without Workers’ Comp Insurance?
Although technically SB 216 is in effect right now, you will not face any penalties until July 1, 2023 – when the new law becomes enforceable. If you are without insurance right now, but need to get it, it’s okay, you’ve got time!
According to the CSLB, failure to comply will result in the suspension or revocation of their license. Contractors who do not comply with the law may also be subject to penalties and fines, in addition to any legal punishments that come from doing unlicensed work.
At the end of the day, it’s not worth it to avoid following the new law. If you take the CSLB at their word, they will be watching contractors with these licenses like a hawk to make sure you have workers’ compensation insurance.
The Bottom Line
If you have a C-8, C-20, C-22, and D-49 license classification, you must have workers’ compensation insurance coverage in place by July 1, 2023, to avoid penalties and fines.
It’s essential that you understand the requirements of this new law and take the necessary steps to comply with it. You have plenty of time to get the requisite insurance – but don’t procrastinate, as you could lose your license quickly!