Do California contractors with no employees need workers' comp?

Increasingly yes. Under SB 216, California is phasing in a requirement that all licensed contractors carry workers' compensation regardless of whether they have employees. Sole proprietors do not qualify for the limited exemption (which applies only to certain joint ventures), so most licensed sole-proprietor contractors will need coverage — often a $0-payroll 'ghost' policy.

Is workers' comp mandatory in California?

Yes — any California employer with employees must carry workers' compensation. Separately, SB 216 extends the requirement to all licensed contractors even without employees, phased in over time. Confirm the current effective date and your status with the CSLB.

Do I Need Workers' Comp Insurance in California? (Contractors & Sole Proprietors)

Short answer: increasingly, yes — even if you have no employees. California is the opposite of Texas here, so read this carefully.

The standard rule

Any California employer with employees must carry workers' compensation — this has long been mandatory and strictly enforced.

The big change for contractors: SB 216

California's Senate Bill 216 phases in a requirement that all licensed contractors carry workers' compensation — whether or not they have employees. This is a major shift: a licensed sole-proprietor contractor with zero employees, who previously could skip coverage, is being brought into the requirement.

The only carve-out is narrow — it applies to certain joint ventures with no employees that file a certificate of exemption. A sole proprietor does not qualify for that exemption.

Timeline (verify the current date): SB 216 was originally phased by trade, and the operative date for most licensed contractors was later amended (by SB 1455) to January 1, 2028, with a new CSLB exemption-verification process beginning around 2027. Because these dates have been amended, confirm exactly where your license class stands with the CSLB before relying on any date.

Coverage for a contractor with no employees

If you have no employees, your policy is typically written on $0 payroll — often called a "ghost" policy. Reported premiums for these have ranged roughly $1,200–$2,500/year depending on your class code, claims history, and location (your agent will quote the real number).

Penalties for going without

Operating without required coverage carries real exposure — reported minimum fines have been around $10,000 for sole proprietors and $20,000 for other contractors, plus license consequences through the CSLB. Don't guess on this one.

And your customers will require it anyway

Independent of the law, GCs and owners in California require a workers' comp certificate from subs (the audit mechanic — your lack of coverage costs them at their audit). So between SB 216 and customer requirements, most California contractors should plan on carrying it.

If you hire subs, collect and verify their certificates too — the free COI Checker and COI Request Generator help.

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General information, not insurance or legal advice, and not specific to your situation. SB 216's requirements and dates have been amended over time — confirm your obligations and the current effective date with the California Contractors State License Board (CSLB) or a licensed California agent. Sources include CSLB / State Fund / WCIRB summaries.