CSLB form 13L-50 lets a California contractor with no employees skip workers' compensation insurance, but five classifications, any RME, and a 2028 deadline close that door. Here is who qualifies, how to file, and what changes next.
California contractors with no employees file CSLB form 13L-50, the Exemption from Workers' Compensation Insurance, to satisfy the license requirement without buying a policy. CSLB accepts the same certification online for eligible in-state contractors, but the signed form is what the license record keeps on file. This guide covers who can sign it, who is blocked from it, how to file proof of coverage once that changes, and a 2028 deadline that will eventually close the exemption for almost everyone.
For the full licensing picture, start with the California contractor license guide or the general contractor license overview.
At a glance
- CSLB form 13L-50, the Exemption from Workers' Compensation Insurance, is filed online or by mail.
- Only an owner, partner, officer, director, member or manager on the license may sign it.
- The exemption is closed to a license qualified by an RME, and to C-8, C-20, C-22, C-39 or C-61/D-49 classifications.
- Hire anyone covered by California law and the exemption ends; CSLB needs proof of coverage within 90 days.
- SB 1455 sets January 1, 2028 as the date coverage becomes mandatory for all licensees, exemption or not.
Source: CSLB workers' compensation requirements, retrieved 2026-10-16.
Who needs workers' compensation in California
Every contractor with an active license, every licensee reactivating an inactive license, and every applicant for an active license must do one of three things:
- File a valid certificate of workers' compensation insurance.
- File a valid Certification of Self-Insurance.
- File the signed exemption certifying that you have no employees.
The third option is narrow. It is not a way around coverage for a growing business, and CSLB is building a process to check it.
Self-insurance works differently from a standard policy. A licensee certified by the Department of Industrial Relations' Office of Self-Insurance Plans can self-insure instead of buying a commercial policy, but that path is built for larger, financially established companies, not a solo operator looking to avoid the cost of coverage. Most solo contractors use the no-employee exemption instead, since self-insurance requires proving financial strength to DIR, not simply having no payroll.
Who can file the exemption, and who cannot
| Situation | Exemption allowed? | What CSLB says |
|---|---|---|
| Owner with no employees, no RME | Yes | Sign the no-employee certification |
| Joint venture under B&P 7029, no employees | Yes | Same no-employee certification applies |
| Employs anyone under California law | No | Must carry coverage |
| License qualified by an RME | No | Must carry coverage |
| C-8, C-20, C-22, C-39, C-61/D-49 | No | Must carry coverage even with no employees |
The classification rule surprises people. A solo concrete (C-8), warm-air heating and air-conditioning (C-20), asbestos abatement (C-22), roofing (C-39) or tree service (C-61/D-49) licensee cannot rely on the no-employee exemption, no matter how small the business. A joint venture formed under Business and Professions Code 7029 gets the same no-employee option as an individual licensee, provided the joint venture itself has no employees; CSLB treats it as its own filing, separate from the individual licenses that formed it.
The form itself: who may sign it, and how to file
CSLB's own exemption tool spells out who is allowed to certify no employees: an owner, partner, officer, director, member or manager named on the license or application. Anyone else cannot complete the form.
In-state contractors who qualify can fill out and sign form 13L-50 through CSLB's online exemption tool, though the finished document still has to be printed, signed and submitted; the portal does not accept a fully electronic submission.
Out-of-state licensees in a barred classification, or with an RME, whose employees do not live in California, cannot use the online tool at all. They print and sign form 13L-50, attach a certificate from their home-state workers' compensation carrier, and send both to CSLB by email to workerscomp@cslb.ca.gov or by mail.
Why an RME changes the answer
Under California law the person who qualifies a license can be an RMO or an RME. An RMO or RME is defined differently: an RME is an employee of the company, so a license qualified by an RME has at least one person on the payroll by definition. That is why the no-employee exemption is closed to those licenses even when the owner has hired no one else.
If you are placing a qualifier, treat workers' compensation as part of the setup, not an afterthought. A qualifying agent qualifies the company as an owner or full-time W-2 employee who supervises the work, so the company carries coverage for that person like any other employee. Read the California RME guide, look at contractor qualifier services if you need help placing or managing one, or hire a qualifying agent directly.
What happens if you hire after filing an exemption
The exemption certifies that you have no employees at this time. If you later hire someone covered by California workers' compensation law, the exemption stops being valid the day you make that hire. CSLB must receive proof of coverage within 90 days of the hire.
- Buy a workers' compensation policy before the first day of paid work.
- Have your insurer file the certificate with CSLB electronically.
- Confirm the license record shows the new coverage.
- Keep your policy dates on a calendar so the policy never lapses.
What happens when coverage lapses
CSLB states that failing to maintain workers' compensation insurance coverage results in the license being suspended. Work during a suspension is treated as unlicensed work, and CSLB can take disciplinary action. The suspension is lifted once acceptable proof is received and processed at CSLB headquarters.
Unlicensed work now costs more. Under Business and Professions Code 7028.7, as amended by SB 779, a citation for unlicensed activity carries a civil penalty of not less than $1,500 and not more than $15,000, operative since July 1, 2026. See California SB 779 and the unlicensed contractor penalty increase.
How to file proof of coverage
| Method | How it works | Watch for |
|---|---|---|
| Electronic | Insurer files online; record updates automatically | Only insurers licensed in California may file |
| Paper certificate sent with CSLB's instruction guide | Errors delay processing and can break license standing |
Every certificate needs the license number (or application number), CSLB as certificate holder, the business name, policy number, effective and expiration dates, and an authorized insurer signature. Common manual errors are an incorrect business or insurer name, a wrong policy number, leaving out CSLB as certificate holder, and an invalid signature. Under Business and Professions Code 7125.6, licensees also list up to three workers' compensation classification codes on the policy, the ones carrying the highest estimated payroll; CSLB does not verify that those codes match the license's own classifications.
A simple way to decide: coverage or exemption
Use this order of questions before you file anything.
- Do you hold C-8, C-20, C-22, C-39 or C-61/D-49? If yes, carry coverage or self-insurance.
- Is your license qualified by an RME? If yes, carry coverage.
- Do you employ anyone covered by California workers' compensation law? If yes, carry coverage.
- If you answered no to all three, you may file the signed exemption, and you must update CSLB when that changes.
The exemption is a statement about your business on the day you sign it. It does not follow you into the next hire, and under current law it does not follow your license past January 1, 2028 either.
Mistakes that cost licensees their standing
| Mistake | Result |
|---|---|
| Letting a policy lapse between renewal dates | Suspension, and work in that window counts as unlicensed |
| Wrong business name on the certificate | Processing delay and a possible break in license standing |
| Leaving CSLB off as certificate holder | Certificate rejected |
| Hiring the first employee under an old exemption | Exemption invalid; proof due within 90 days |
| Mailing a paper certificate near a deadline | Errors delay processing |
CSLB processes a certificate as of the date it receives a correct one. That is why electronic filing by the insurer is usually the safer route: the license record updates automatically.
SB 291 and the push to verify exemptions
SB 291 (Chapter 455, Statutes of 2025) took effect January 1, 2026 and amended Business and Professions Code 7125.4, though the amended civil penalty amounts themselves are operative July 1, 2026. Filing a false exemption, employing a covered worker after filing one without then obtaining valid coverage, or employing a covered worker without maintaining coverage at all is now cause for discipline. Employing a covered worker without coverage carries a specific civil penalty floor: not less than $10,000 per violation for a sole owner licensee, and not less than $20,000 per violation for a partnership, corporation, limited liability company or tribal business licensee. Added penalties for a subsequent violation can bring the total to $30,000 per occurrence. CSLB also cannot renew or reinstate a license found in violation until a current, valid certificate or self-insurance certification is on file.
SB 291 also directs CSLB to build a process, including an audit or other evidence, to verify that a licensee claiming the no-employee exemption actually qualifies, and to report to the Legislature by January 1, 2027. CSLB's board authorized that report in March 2026. It proposes limiting the exemption to an individual owner with no RME and no registered home improvement salesperson tied to the license, on top of the classification bar already in place.
That proposal is a report to the Legislature, not yet an adopted filing rule, so today's exemption still follows the eligibility rules above. The report also proposes requiring every applicant to sign an attestation acknowledging their workers' compensation obligations before CSLB accepts the exemption, on top of the existing certification under penalty of perjury, separate from the misdemeanor exposure a qualifier faces under Section 7125.4 for failing to prevent a false filing. Watch CSLB's site for when, or whether, the Legislature acts on it.
The bigger change coming: all licensees by 2028
The no-employee exemption itself has an expiration date under current law. CSLB sponsored SB 216 in 2022, which required workers' compensation coverage for all licensees, regardless of employees, starting January 1, 2026, on top of adding C-8, C-20, C-22 and C-61/D-49 to the classifications that already could not use the exemption. SB 1455, CSLB's 2024 sunset-extension bill, pushed that all-licensee deadline back to January 1, 2028 and restored the no-employee exemption in the meantime for licensees outside the five barred classifications.
That means today, October 2026, the rules in this guide are the current law: the exemption works for a qualifying owner outside the five classifications and outside an RME arrangement. Starting January 1, 2028, Business and Professions Code 7125 requires every CSLB licensee to carry workers' compensation insurance or self-insurance, whether or not the business has an employee. If your license renews on or after that date, budget for coverage even if you plan to stay a one-person operation.
CSLB has not announced new classifications or carve-outs beyond the five already listed, and nothing in the current statute phases in the 2028 requirement earlier for any trade. Treat the date as fixed unless CSLB's site says otherwise, and ask your insurer for a policy quote well before your license renewal date falls after January 1, 2028, since underwriting and classification review can take longer than a same-day purchase.
Applicants and reactivations
The rule is not limited to licenses already in good standing. Applicants for an active license and licensees reactivating an inactive license must also show coverage, self-insurance or an exemption before CSLB will issue, reinstate, reactivate or renew the license. If you are applying with a qualifier, confirm the policy covers the employee who will qualify the license before you submit. The guide to qualifying agents in California walks through the structure.
CSLB checks this requirement at every renewal cycle too, not just at initial issuance, so an exemption filed years ago still needs to reflect today's staffing before you renew.
For the rest of the 2026 package affecting California contractors, see California contractor laws that took effect in 2026.
Frequently asked questions
What form do I file for the California workers' compensation exemption? CSLB form 13L-50, Exemption from Workers' Compensation Insurance, filed through CSLB's online exemption tool or by mail.
Can a sole owner with no employees skip workers' compensation in California? Yes, by filing the signed exemption, unless the license is qualified by an RME or sits in C-8, C-20, C-22, C-39 or C-61/D-49.
What happens if my workers' compensation policy lapses? CSLB suspends the license. Work during the suspension counts as unlicensed work.
How long do I have to send proof after I hire someone? CSLB must receive proof of coverage within 90 days of the hire.
Who can sign the exemption form? Only an owner, partner, officer, director, member or manager named on the license or application.
Does an RME count as an employee? Yes. An RME is an employee of the licensed company, which is why a license qualified by an RME cannot use the no-employee exemption. A qualifying agent is placed as a W-2 employee for the same reason.
Will the exemption still exist after 2028? Under current law, no. Business and Professions Code 7125, as amended by SB 1455, requires all licensees to carry workers' compensation coverage or self-insurance starting January 1, 2028, regardless of employees.
How much does workers' compensation cost for a California contractor? Premiums depend on your classification codes, payroll and claims history, so ask your insurer for a quote.
What is the difference between the exemption and a self-insurance certification? The exemption certifies you have no employees; a Certification of Self-Insurance, issued by the Department of Industrial Relations, lets a company with employees cover its own claims instead of buying a commercial policy.
Does CSLB already verify who claims the exemption? Not yet in a formal audit sense. SB 291 requires CSLB to build that verification process and report to the Legislature by January 1, 2027, so the check is coming but is not yet in place.
Sources
- CSLB Workers' Compensation Requirements (retrieved 2026-10-16)
- CSLB Exemption from Workers' Compensation Insurance (online filing tool) (retrieved 2026-10-16)
- Business and Professions Code 7125, current text (retrieved 2026-10-16; leginfo.legislature.ca.gov and law.justia.com both returned an access error today, and CSLB's own PDF of the statute would not extract as readable text)
- Business and Professions Code 7125.4, current text (retrieved 2026-10-16, same access note)
- Business and Professions Code 7028.7, current text (retrieved 2026-10-16, same access note)
Requirements and penalty amounts change, and the 2028 deadline described above is current law as of today rather than a settled outcome. Verify current rules with CSLB before you rely on this page. The Licensing Company's founders, Marshall Schofield and Jeremiah Jaskulski, work with contractors on California licensing every day. You can hire a qualifying agent or call 615-219-2110, or read about license law changes in 2026 by state.
Disclaimer: This article is provided for educational and informational purposes only. It does not constitute legal advice, licensing guidance, or an offer of services. Licensing requirements vary by jurisdiction. For specific compliance questions, contact The Licensing Company for a confidential consultation.