California Contractor Workers’ Comp & Ghost Policies: CSLB Rules for 2026–2028

By Kevin Leipsic, President & Founder Licensed CA insurance agent #0D72064 · Member & Insurance Advisor, California Building Industry Association (CBIA) and National Association of the Remodeling Industry (NARI) Host of ContractorTV on YouTube and the California Contractor Podcast on Spotify Last reviewed October 9, 2026, against CSLB and California law

Renewal coming up? No employees? And CSLB just told you it needs a workers’ comp certificate?

You’re not the only one. I get this call almost every week, and the fix is simpler than it sounds.

Here’s everything you need to know, in plain English.

Do you need workers’ comp yet?

You need it now if anyone works for you, your license is qualified by a Responsible Managing Employee (RME), or your license includes C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing, or C-61/D-49 Tree and Palm. That’s true even if you’re a one-person shop.

Everyone else with no employees can still file a CSLB exemption for now. That option goes away on January 1, 2028. After that, every active license needs a workers’ comp certificate (or self-insurance) on file. Inactive licenses aren’t affected.

If you’re currently operating under a workers’ compensation exemption, there’s no need to purchase a policy before it’s required, assuming you remain eligible for that exemption. However, it’s important to understand when the new requirements will apply to your license so you can plan accordingly.

For newly licensed contractors in classifications that already require workers’ compensation, you don’t have to wait until your license number is issued. You can begin the insurance process using your CSLB application fee number while your license application is being reviewed.

What a ghost policy is (and what it isn’t)

“Ghost policy” is just an industry nickname. You’ll also hear owner-only, minimum premium, or zero-payroll policy. Here’s what it really is:

• It’s real workers’ comp insurance. It comes with a Certificate of Workers’ Compensation Insurance, and that’s what CSLB wants to see.
• It’s not an exemption. An exemption is a form that says you don’t need coverage. A ghost policy says you have coverage, and here’s the proof. When your classification requires coverage, or after January 1, 2028, only the policy works.
• It doesn’t cover you. Every ghost policy excludes the owner. If you want coverage for yourself, that’s a standard policy, not a ghost policy.
• It gets audited. Every ghost policy is audited to confirm no payroll was issued.

For a contractor who truly works alone, a ghost policy is the correct, legal way to get a certificate on file. Where people get in trouble is buying one while running a crew off the books or calling their helpers “1099 subs.” The audit catches that, and it’s exactly what the new penalties are aimed at.

On cost: because there’s no payroll, a ghost policy is typically written at the carrier’s minimum premium, which varies by carrier and by classification. I’d rather quote your actual license than throw out a number that doesn’t fit you.

If you’re about to hire someone

Congrats, first of all. Just call me before their first day.

If you’re on an exemption, it stops being valid once you hire, and CSLB needs proof of coverage within 90 days. Don’t treat that as a grace period, though. California requires workers’ comp even with one employee, so get the policy in place first.

If you’re on a ghost policy, we’ll move you to a standard policy that covers payroll. And a heads-up on helpers: paying someone cash or giving them a 1099 doesn’t automatically make them an independent contractor. If they work under your direction and do the core work of your business, California can treat them as your employee. When in doubt, ask me first.

How I help

You’ll talk with me directly, not a call center. Here’s what that looks like:

1. A short conversation. I’ll ask for your license number (or application fee number), your classifications, how your business is set up, and whether anyone works for you.
2. A straight answer. If you can still file an exemption and that’s the better fit for you, I’ll tell you. If you need a policy, I’ll tell you which kind.
3. We shop California carriers for you. No employees? That’s an owner-only ghost policy through ContractorGHOST, our ghost policy program. Have a crew of any size, or want coverage for yourself? That’s ContractorCOMP, our workers’ comp for contractors with employees.
4. We file your certificate with CSLB. Only insurers and their authorized agents can file it electronically. As your agent, we take care of it.
5. You get your certificate of insurance the same day your policy starts, so you’re ready when a GC or customer asks.
6. We stay with you. Renewals, the audit, adding employees, moving from ghost to full coverage: one call, same person.

Guides by trade

• C-20 HVAC workers’ comp & ghost policy
• C-8 Concrete workers’ comp & ghost policy
• C-22 Asbestos Abatement workers’ comp & ghost policy
• C-61/D-49 Tree and Palm workers’ comp & ghost policy

More reading: The January 1, 2028 deadline · Do I need workers’ comp? (no employees, 1099s, day labor) · Workers’ comp cost and how to pay less · State Fund rate changes · For homeowners and GCs: how to verify coverage

Frequently Asked Questions (FAQ)

1. Which California contractors are required to carry workers’ comp insurance?

Right now, you must carry it if anyone works for you, if your license is qualified by a Responsible Managing Employee (RME), or if your license includes C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing or C-61/D-49 Tree and Palm, even if you work alone. Everyone else with no employees can still file a CSLB exemption for now. Starting January 1, 2028, every active license needs a workers’ comp certificate or self-insurance on file, with one narrow exception for a joint venture with no employees. Inactive licenses aren’t affected.

2. When do California’s new contractor workers’ comp requirements take effect?

The big change is January 1, 2028. That’s when the no-employee exemption ends and every active license needs a workers’ comp certificate or self-insurance on file. SB 216 originally set that date for January 1, 2026, and SB 1455 pushed it back to 2028, which is why you’ll still see 2026 online. For C-39 Roofing (since 2013) and C-8, C-20, C-22 and C-61/D-49 Tree and Palm (since 2023), the requirement is already in effect.

3. Can I keep my CSLB workers’ comp exemption?

Yes, for now, as long as you stay eligible. If you remain eligible for the exemption, there’s no need to buy a policy before it’s required. Just know when that is for your license: the exemption already doesn’t apply to licenses with an RME or a C-8, C-20, C-22, C-39 or C-61/D-49 Tree and Palm classification, and it ends for nearly all licensees on January 1, 2028. Expect closer checks before then, too, since CSLB has to set up a process to verify exemption eligibility by January 1, 2027.

4. What is a workers’ comp ghost policy?

“Ghost policy” is an industry nickname for a real workers’ comp policy written with no payroll, also called an owner-only or zero-payroll policy. It comes with a Certificate of Workers’ Compensation Insurance, which is what CSLB wants to see, so it’s not an exemption. Every ghost policy excludes the owner and is audited to confirm no payroll was issued. For a contractor who truly works alone, it’s a legal way to get a certificate on file; using one to hide a crew is what gets people in trouble.

5. Do I need workers’ comp if I’m a sole proprietor with no employees?

Until January 1, 2028, it depends on your license. If you have no employees, no RME and none of the must-carry classifications, you can file a CSLB exemption instead; starting January 1, 2028, you’ll need a policy on file even if you work alone. One catch: paying a helper cash or giving them a 1099 doesn’t automatically make them an independent contractor, and if they work under your direction doing the core work of your business, California can treat them as your employee.

6. Does a ghost policy cover me if I get hurt on the job?

No. Every ghost policy excludes the owner, so it won’t pay for your own injury. If you want coverage for yourself, you need a standard workers’ comp policy, and at that point it’s no longer a ghost policy.

7. How much does a workers’ comp ghost policy cost?

There’s no single price. Because there’s no payroll, a ghost policy is typically written at the carrier’s minimum premium, and that minimum varies by carrier and by classification. A C-39 roofer and a C-10 electrician, for example, won’t pay the same, so a number you see online may not fit your license.

8. What happens if I hire an employee?

If you’re on an exemption, it stops being valid once you hire, and CSLB must receive proof of coverage within 90 days of the hire. That isn’t a grace period, though: California requires workers’ comp even with one employee, so get the policy in place before their first day. If you’re on a ghost policy, it needs to be replaced with a standard policy that covers payroll.

9. What are the penalties for not having workers’ comp?

Under SB 291, filing a false exemption or employing workers without coverage carries a minimum civil penalty of $10,000 per violation for a sole owner and $20,000 for a partnership, corporation, LLC or tribal business, with additional penalties up to $30,000 per occurrence. CSLB also can’t renew or reinstate a disciplined license until a valid certificate is filed. And if your coverage lapses, your license is suspended, and work done while it’s suspended counts as unlicensed work.

10. How does my workers’ comp certificate get filed with CSLB?

Your insurance company or its authorized agent files the Certificate of Workers’ Compensation Insurance, with CSLB listed as the certificate holder; contractors can’t use CSLB’s electronic filing themselves. If your license hasn’t been issued yet, the certificate can show your application fee number, so coverage can be lined up while your application is in review. If your policy starts more than 30 days out, CSLB holds the certificate until the effective date.

The fine print

• Required now: C-39 Roofing (since 2013); C-8, C-20, C-22 and C-61/D-49 (since 2023, SB 216); any RME-qualified license; and anyone with employees.
• Everyone else: exemptions end January 1, 2028 (SB 1455). After that, every active license needs a workers’ comp certificate on file. CSLB must also start verifying exemptions by January 1, 2027.
• Penalties (SB 291): at least $10,000 per violation for a sole owner and $20,000 for an entity, and CSLB won’t renew a disciplined license until a certificate is filed.
• Lapses: coverage has to be continuous. A lapse suspends your license.
• Tree licenses: new tree applications are now issued as C-49. The rule names D-49, so if you hold a C-49, call me before you file anything.

Official sources: CSLB, Workers’ Compensation Requirements · CSLB, online certificate submission · SB 216 (2022) · SB 1455 (2024) · SB 291 (2025) · CSLB SB 291 Report (March 2026) · CSLB C-49 Tree and Palm bulletin

This page is general information, not legal advice. Check your own record on CSLB’s license lookup, or call me and we’ll check it together.