California Contractor Laws That Took Effect in 2026

California passed a wave of contractor bills for 2026, and nearly all of them land on the licensed contractor. Six bills took effect on January 1, 2026, and one more, SB 779, followed on July 1, 2026. This guide walks through each law in the order a working contractor will feel it, using the California Contractors State License Board (CSLB) bulletin as the source.

If you are still working out whether you hold the right license at all, start with the California contractor license guide. This page covers what changed for people who already have one, or are about to apply.

At a glance

• Six new laws took effect January 1, 2026: AB 521, AB 1002, AB 1327, SB 291, SB 456 and SB 517.
• SB 779 took effect July 1, 2026 and raised CSLB's minimum civil penalties; unlicensed activity now starts at $1,500.
• Home improvement contracts must now carry an email address and a phone number for the contractor.
• On home improvement jobs, you must name your subcontractors on request.
• Workers' compensation violations now carry significantly higher penalties.

Source for every item below: CSLB industry bulletin on new laws for 2026.

The 2026 laws at a glance

AB 1327: home improvement contracts need an email and phone number

AB 1327 changes what a home improvement contract must say. The contract has to include the contractor's email address and a telephone number. A buyer may now cancel by email, and the phone number must help the buyer find and complete the "Notice of Cancellation."

If that notice is missing, the buyer can file a complaint with CSLB. For a small shop that still uses a template from several years ago, this is the first thing to check.

1. Pull your current home improvement contract template.
2. Confirm it shows an email address and a working phone number for the business.
3. Confirm the Notice of Cancellation is attached and complete.
4. Confirm your staff know that a cancellation sent by email counts.

SB 517: you may have to name your subcontractors

Under SB 517, a contractor on a home improvement project who uses subcontractors must disclose, on request, each subcontractor's name, contact information, license number and classification. The prime contractor stays responsible for the project. Subcontractors and home improvement salespersons can also face discipline for violations.

Keep a current list for every open job. If a homeowner asks who is on the roof, you should be able to answer the same day, with a license number you have already checked. You can check one yourself with our guide to verifying a contractor's license.

SB 291: workers' compensation penalties go up

SB 291 raises the penalties for workers' compensation insurance violations by a significant amount. The CSLB bulletin does not give dollar figures. Trade press reports minimums of $10,000 per violation for sole owners and $20,000 for other business types, so confirm the amounts in the bill text before you quote a number to anyone. The law also tells CSLB to build a process to verify whether a licensee really qualifies for a workers' compensation exemption, to report to the Legislature by 2027, and to publish enforcement data every year.

The practical read: an exemption filed years ago for a one-person shop is now more likely to be tested. Our guide to the California contractor workers' comp exemption rules explains who can file one, who cannot, and what happens when coverage lapses.

AB 1002: wage judgments can cost you the license

AB 1002 lets the Attorney General and CSLB jointly sue to suspend, revoke or deny a license when a contractor fails to pay workers or ignores a wage judgment or court order. The Attorney General must notify CSLB before filing, and CSLB may step in or work alongside.

Wage claims were once a civil matter between a contractor and a worker. They are now also a license risk.

AB 521: cash deposits in place of a bond

Some contractors post a cash deposit instead of a license bond. AB 521 says CSLB is not liable for attorney fees in a civil claim over that deposit. The bulletin places no new duty on contractors, so this one matters mostly if you hold a deposit or are the claimant.

SB 456: murals are no longer a licensing question

SB 456 exempts muralists from contractor licensing when they paint or restore a mural under agreement with a legally authorized party. The mural must be a unique fine art work, hand-painted directly on an interior or exterior wall or ceiling, and protected by copyright or similar rights. The exemption does not cover painted wall signs.

SB 779: the unlicensed-work minimum is now $1,500

SB 779 took effect on July 1, 2026. It raises CSLB's minimum civil penalties.

Unlicensed activity starts at $1,500, and other specified violations carry minimums of $500 or $1,500 depending on the offense. The amounts will be adjusted every five years using the Consumer Price Index. The bulletin does not say which violations fall into the $500 tier and which into the $1,500 tier, so read the bill before you rely on that split.

We cover the full story in California SB 779 and the unlicensed contractor penalty increase, and the wider penalty picture in penalties for unlicensed contracting.

What the 2026 package means for the qualifier on your license

Several of these laws raise the stakes of a license that is held on paper only. A wage judgment, a workers' compensation violation or a missing contract notice can each end up in front of CSLB, and CSLB looks at the license and the person qualifying it.

In California the qualifying individual is a Responsible Managing Officer (RMO) or Responsible Managing Employee (RME). An RME is an employee of the company. Our guides to the RMO and RME roles in California and the California qualifying agent RME guide explain the difference.

A company that needs an RME can place a qualifying agent as a full-time W-2 employee, so the person who qualifies the license actually works for the company. Read what a qualifying agent is and how to hire a qualifying agent. For cost questions, see /ConsultationPackages.

A short compliance checklist

Frequently asked questions

Which California contractor laws took effect on January 1, 2026? AB 521, AB 1002, AB 1327, SB 291, SB 456 and SB 517. SB 779 followed on July 1, 2026.

How much is the minimum penalty for unlicensed work in California now? Unlicensed activity begins at $1,500 under SB 779, according to the CSLB bulletin. Penalty amounts can change, so verify the current figure with CSLB.

Do I have to tell a homeowner who my subcontractors are? On a home improvement project, yes, on request. SB 517 requires each subcontractor's name, contact information, license number and classification.

Can a homeowner cancel a home improvement contract by email? Under AB 1327, yes. The contract must list your email address and a phone number to help the buyer complete the Notice of Cancellation.

Does a mural painter need a contractor license? Not for a qualifying mural under SB 456. Painted wall signs are not covered.

How much does it cost to qualify a California license? It depends on the classification, your experience and how the company is set up. Start with /ConsultationPackages to talk it through.

Laws and penalty amounts change. Verify current requirements with CSLB and the bill text before you rely on them. The Licensing Company is led by Marshall Schofield and Jeremiah Jaskulski, who work with contractors on California and multi-state licensing every day. See also the 2026 contractor license law changes by state.