Section § 7125

Explanation

This law requires contractors to hold a valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance to get, keep, or renew a license, except under certain conditions. If a contractor has no employees and does not hold specified licenses (C-8, C-20, C-22, C-39, D-49), they may be exempt if they file a statement confirming their status. A joint venture without employees that files a similar statement is also exempt. Licenses that are inactive do not require these certifications.

Insurers must report certain policy details to the board, including when policies are issued, canceled, or if there’s been a misrepresentation by the insured. If misrepresentation leads to financial harm without reimbursement, it can lead to disciplinary actions. For some specific licenses active as of defined dates, their classification can be removed or risk being suspended if proper insurance is not maintained. Information related to policy cancellations is confidential. This law remains valid until January 1, 2028, unless extended or changed by new legislation.

(a)CA Business & Professions Code § 7125(a) Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name. A Certificate of Workers’ Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers’ compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)CA Business & Professions Code § 7125(b) This section does not apply to an applicant or licensee who meets both of the following conditions:
(1)CA Business & Professions Code § 7125(b)(1) Has no employees provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers’ compensation laws of California or is not otherwise required to provide for workers’ compensation insurance coverage under California law.
(2)CA Business & Professions Code § 7125(b)(2) Does not hold a C-8 license, as defined in Section 832.08 of Title 16 of the California Code of Regulations, a C-20 license, as defined in Section 832.20 of Title 16 of the California Code of Regulations, a C-22 license, as defined in Section 832.22 of Title 16 of the California Code of Regulations, a C-39 license, as defined in Section 832.39 of Title 16 of the California Code of Regulations, or a D-49 license, a subcategory of a C-61 license, as defined in Section 832.61 of Title 16 of the California Code of Regulations.
(c)CA Business & Professions Code § 7125(c) This section does not apply to an applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files the statement prescribed by subparagraph (1) of subdivision (b).
(d)CA Business & Professions Code § 7125(d) A Certificate of Workers’ Compensation Insurance, Certification of Self-Insurance, or exemption certificate is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(e)Copy CA Business & Professions Code § 7125(e)
(1)Copy CA Business & Professions Code § 7125(e)(1) The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)CA Business & Professions Code § 7125(e)(2) A workers’ compensation insurer shall also report to the registrar a licensee whose workers’ compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)CA Business & Professions Code § 7125(e)(2)(A) The insurer has completed a premium audit or investigation.
(B)CA Business & Professions Code § 7125(e)(2)(B) A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)CA Business & Professions Code § 7125(e)(2)(C) No reimbursement has been paid by the insured to the insurer.
(3)CA Business & Professions Code § 7125(e)(3) Willful or deliberate disregard and violation of workers’ compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(f)Copy CA Business & Professions Code § 7125(f)
(1)Copy CA Business & Professions Code § 7125(f)(1) For any license that, on January 1, 2013, is active and includes a C-39 classification in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-39 classification from the license unless a valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)CA Business & Professions Code § 7125(f)(2) For any licensee whose license, after January 1, 2013, is active and has had the C-39 classification removed as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(g)Copy CA Business & Professions Code § 7125(g)
(1)Copy CA Business & Professions Code § 7125(g)(1) For any licensee whose license, after July 1, 2023, is active and includes a C-8, C-20, C-22, or D-49 classification, in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-8, C-20, C-22, or D-49 classification from the license unless a valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance is received by the registrar.
(2)CA Business & Professions Code § 7125(g)(2) For any licensee whose license, after July 1, 2023, is active and has had the C-8, C-20, C-22, or D-49 classification removed, as provided in paragraph (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, that license shall be automatically suspended as required under this article.
(h)CA Business & Professions Code § 7125(h) The information reported pursuant to paragraph (2) of subdivision (e) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(i)CA Business & Professions Code § 7125(i) This section shall remain in effect only until January 1, 2028, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2028, deletes or extends that date.

Section § 7125

Explanation

This law requires contractors to have proof of workers' compensation insurance or self-insurance to get or maintain a contractor's license, except if they have no employees and certify this to the board. Insurance details like policy numbers and coverage dates must be reported to the registrar. If a policy is canceled due to fraud or unpaid reimbursements, this must also be reported, leading to possible disciplinary action. Information about fraudulent cancellations remains confidential. This regulation starts January 1, 2028.

(a)CA Business & Professions Code § 7125(a) Except as provided in subdivision (b), the board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name. A Certificate of Workers’ Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers’ compensation insurance in this state. A Certification of Self-Insurance shall be issued and filed by the Director of Industrial Relations. If reciprocity conditions exist, as provided in Section 3600.5 of the Labor Code, the registrar shall require the information deemed necessary to ensure compliance with this section.
(b)CA Business & Professions Code § 7125(b) This section does not apply to an applicant or licensee organized as a joint venture pursuant to Section 7029 that has no employees, provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar before the issuance, reinstatement, reactivation, or continued maintenance of a license, certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers’ compensation laws of California or is not otherwise required to provide for workers’ compensation insurance coverage under California law.
(c)CA Business & Professions Code § 7125(c) A Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance is not required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive.
(d)Copy CA Business & Professions Code § 7125(d)
(1)Copy CA Business & Professions Code § 7125(d)(1) The insurer, including the State Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.
(2)CA Business & Professions Code § 7125(d)(2) A workers’ compensation insurer shall also report to the registrar a licensee whose workers’ compensation insurance policy is canceled by the insurer if all of the following conditions are met:
(A)CA Business & Professions Code § 7125(d)(2)(A) The insurer has completed a premium audit or investigation.
(B)CA Business & Professions Code § 7125(d)(2)(B) A material misrepresentation has been made by the insured that results in financial harm to the insurer.
(C)CA Business & Professions Code § 7125(d)(2)(C) Reimbursement has not been paid by the insured to the insurer.
(3)CA Business & Professions Code § 7125(d)(3) Willful or deliberate disregard and violation of workers’ compensation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee.
(e)CA Business & Professions Code § 7125(e) The information reported pursuant to paragraph (2) of subdivision (d) shall be confidential, and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(f)CA Business & Professions Code § 7125(f) This section shall become operative on January 1, 2028.

Section § 7125.1

Explanation

This law explains how a professional license in California can be reinstated. If a certificate needed for the license is submitted within 90 days of its effective date, the registrar will accept it and the license will be reinstated back to that date. If the certificate is submitted late, it can still be accepted if the licensee proves that missing the deadline was due to uncontrollable circumstances. In both cases, the license is reinstated retroactively to the certificate's effective date, as long as all other eligibility criteria are met.

(a)CA Business & Professions Code § 7125.1(a) The registrar shall accept a certificate required by Section 7125 as of the effective date shown on the certificate, if the certificate is received by the registrar within 90 days after that date, and shall reinstate the license to which the certificate pertains, if otherwise eligible, retroactive to the effective date of the certificate.
(b)CA Business & Professions Code § 7125.1(b) Notwithstanding subdivision (a), the registrar shall accept the certificate as of the effective date shown on the certificate, even if the certificate is not received by the registrar within 90 days after that date, upon a showing by the licensee, on a form acceptable to the registrar, that the failure to have a certificate on file was due to circumstances beyond the control of the licensee. The registrar shall reinstate the license to which the certificate pertains, if otherwise eligible, retroactive to the effective date of the certificate.

Section § 7125.2

Explanation

If a business with a requisite license fails to secure or keep up workers' compensation insurance, their license is automatically suspended. This suspension becomes active when the insurance lapses or when it was required but not obtained. The authorities will notify the business about the suspension, why it happened, and how to fix it. The license can be reinstated once the business proves they have the correct insurance. If someone is working as a contractor without a license and without necessary insurance, they can be fined. They have 15 working days to ask for a hearing about the fine.

The failure of a licensee to obtain or maintain workers’ compensation insurance coverage, if required under this chapter, shall result in the automatic suspension of the license by operation of law in accordance with the provisions of this section, but this suspension shall not affect, alter, or limit the status of the licensee as an employer for purposes of Section 3716 of the Labor Code.
(a)CA Business & Professions Code § 7125.2(a) The license suspension imposed by this section is effective upon the earlier of either of the following:
(1)CA Business & Professions Code § 7125.2(a)(1) On the date that the relevant workers’ compensation insurance coverage lapses.
(2)CA Business & Professions Code § 7125.2(a)(2) On the date that workers’ compensation coverage is required to be obtained.
(b)CA Business & Professions Code § 7125.2(b) A licensee who is subject to suspension under paragraph (1) of subdivision (a) shall be provided a notice by the registrar that includes all of the following:
(1)CA Business & Professions Code § 7125.2(b)(1) The reason for the license suspension and the effective date.
(2)CA Business & Professions Code § 7125.2(b)(2) A statement informing the licensee that a pending suspension will be posted to the license record for not more than 45 days prior to the posting of any license suspension periods required under this article.
(3)CA Business & Professions Code § 7125.2(b)(3) The procedures required to reinstate the license.
(c)CA Business & Professions Code § 7125.2(c) Reinstatement may be made at any time following the suspension by showing proof of compliance as specified in Sections 7125 and 7125.1.
(d)CA Business & Professions Code § 7125.2(d) In addition, with respect to an unlicensed individual acting in the capacity of a contractor who is not otherwise exempted from the provisions of this chapter, a citation may be issued by the registrar under Section 7028.7 for failure to comply with this article and to maintain workers’ compensation insurance. An opportunity for a hearing as specified in Section 7028.10 will be granted if requested within 15 working days after service of the citation.

Section § 7125.3

Explanation

This law states that a contractor is regarded as having a valid license for the time periods covered by a specific certificate, as long as they follow the related rules in this chapter.

A contractor shall be considered duly licensed during all periods in which the registrar is required to accept the certificate prescribed by Section 7125, provided the licensee has otherwise complied with the provisions of this chapter.

Section § 7125.4

Explanation

If someone files a false exemption from workers' compensation or hires workers without the proper insurance, they can face disciplinary action. Also, if a person responsible for ensuring compliance with licensing laws either commits or doesn't stop violations related to workers' compensation, they can be charged with a misdemeanor.

(a)CA Business & Professions Code § 7125.4(a) The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers’ compensation laws after the filing of an exemption certificate without first filing a Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance in accordance with the provisions of this article, or the employment of a person subject to coverage under the workers’ compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action.
(b)CA Business & Professions Code § 7125.4(b) Any qualifier for a license who, under Section 7068.1, is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.

Section § 7125.5

Explanation

If you're renewing a contractor's license in California and currently have an exemption for workers' compensation insurance on file, you must either confirm your exemption status on the renewal form or provide proof of insurance. Your license won't be renewed without doing this. If you miss providing this information, you get a grace period of 30 days after being notified to submit it and still potentially keep your renewal date. Failing to comply within those 30 days means you can't get a retroactive renewal approval.

(a)CA Business & Professions Code § 7125.5(a) At the time of renewal, all active licensees with an exemption for workers’ compensation insurance on file with the board, submitted pursuant to subdivision (b) of Section 7125, shall either recertify the licensee’s exemption by completing a recertification statement on the license renewal form, as provided by the board, or shall provide a current and valid Certificate of Workers’ Compensation Insurance or Certificate of Self-Insurance, whichever is applicable.
(b)CA Business & Professions Code § 7125.5(b) The license shall not be renewed unless a licensee with an exemption for workers’ compensation insurance on file with the board recertifies the exemption status or provides a current and valid Certificate of Workers’ Compensation Insurance or Certificate of Self-Insurance in conjunction with the license renewal.
(c)CA Business & Professions Code § 7125.5(c) If the documentation required by subdivision (a) is not provided with the license renewal but is received within 30 days after notification by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the date of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason after 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision.

Section § 7125.6

Explanation

This law outlines the process for license renewal for businesses with workers' compensation insurance. At renewal, these businesses must report their top three payroll classification codes on their renewal form. If there are fewer codes, they must report all of them. The licensing board doesn't have to check the accuracy of these codes and won't be liable for mistakes. A license can't be renewed without this information, unless the business provides it within 30 days after getting a renewal rejection notice. If done within this time, their renewal can be backdated. Any updates on the board’s website about license renewals will show the certified classification codes. This requirement will start on July 1, 2024.

(a)Copy CA Business & Professions Code § 7125.6(a)
(1)Copy CA Business & Professions Code § 7125.6(a)(1) At the time of renewal, all active licensees who have on file a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, or who are required to provide those certificates pursuant to subdivision (a) of Section 7125, shall certify on the license renewal form for the three workers’ compensation classification codes for which the highest estimated payroll is reported on the policy. If the licensee has fewer than three classification codes reported on the policy, the licensee shall provide every classification code reported on the policy.
(2)CA Business & Professions Code § 7125.6(a)(2) The board shall not be required to verify or investigate the accuracy of the licensee’s classification code or codes provided by the licensee pursuant to paragraph (1).
(3)CA Business & Professions Code § 7125.6(a)(3) The board shall not be held liable for any classification code or codes misreported by a licensee.
(b)Copy CA Business & Professions Code § 7125.6(b)
(1)Copy CA Business & Professions Code § 7125.6(b)(1) Except as provided in paragraph (2), a license shall not be renewed unless the licensee complies with this section.
(2)CA Business & Professions Code § 7125.6(b)(2) If the documentation and information required by subdivision (a) is not provided with the license renewal form but is received within 30 days after notification by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the date of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason more than 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision.
(c)CA Business & Professions Code § 7125.6(c) When the board updates the public license detail on its internet website for an active renewal submitted by a licensee pursuant to this section, the update shall include the classification code or codes certified by the licensee pursuant to subdivision (a).
(d)CA Business & Professions Code § 7125.6(d) This section shall become operative on July 1, 2024.

Section § 7125.7

Explanation

This law requires that by January 1, 2027, a process needs to be set up to check if a business owner who doesn't have any employees can be exempt from needing workers' compensation insurance. This check could involve an audit or other evidence-based methods to prove eligibility.

By no later than January 1, 2027, the board shall establish a process and procedure, which may include an audit, proof, or other means, to verify that an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance requirement pursuant to Section 7125.

Section § 7126

Explanation

This law states that licensed contractors or their agents who break the rules outlined in their license are committing a misdemeanor, which is a minor crime. If someone is working as a contractor without a license and they break certain labor laws, they’re also committing a misdemeanor. Any legal action to charge someone with these misdemeanors must start within two years from when the offense happened.

(a)CA Business & Professions Code § 7126(a) Any licensee or agent or officer thereof, who violates, or omits to comply with, any of the provisions of this article is guilty of a misdemeanor.
(b)CA Business & Professions Code § 7126(b) Any person not licensed in accordance with this chapter who is acting as a contractor and who violates, or omits to comply with, Section 3700 of the Labor Code is guilty of a misdemeanor.
(c)CA Business & Professions Code § 7126(c) Prosecution of any offense under this section shall be commenced within two years after commission of the offense as provided in Section 802 of the Penal Code.

Section § 7127

Explanation

If an employer does not have proper workers' compensation insurance as required, the authorities can issue a stop order to immediately halt the use of any employee labor. Affected employees are entitled to be paid for up to 10 days during this stoppage. Ignoring this stop order can result in criminal charges, including jail time or fines. Employers can challenge the stop order by requesting a hearing within 20 days, and a decision will be made quickly after the hearing. If still dissatisfied, employers can appeal to a higher court within a certain timeframe.

(a)Copy CA Business & Professions Code § 7127(a)
(1)Copy CA Business & Professions Code § 7127(a)(1) If an employer subject to licensure under this chapter has failed to secure the payment of compensation as required by Section 3700 of the Labor Code, and whether that employer is or is not licensed under this chapter, the registrar may, in addition to any other administrative remedy, issue and serve on that employer a stop order prohibiting the use of employee labor. The stop order shall become effective immediately upon service. An employee affected by the work stoppage shall be paid by the employer for his or her time lost, not exceeding 10 days, pending compliance by the employer.
(2)CA Business & Professions Code § 7127(a)(2) Failure of any employer, officer, or any person having direction, management, or control of any place of employment or of employees to observe a stop order issued and served upon him or her pursuant to this section is a misdemeanor punishable by imprisonment in the county jail not exceeding 60 days or by a fine not exceeding ten thousand dollars ($10,000), or both.
(b)CA Business & Professions Code § 7127(b) An employer who is subject to this section may protest the stop order by making and filing with the registrar a written request for a hearing within 20 days after service of the stop order. The hearing shall be held within five days from the date of filing the request. The registrar shall notify the employer of the time and place of the hearing by mail. At the conclusion of the hearing, the stop order shall be immediately affirmed or dismissed, and within 24 hours thereafter the registrar shall issue and serve on all parties to the hearing by registered or certified mail a written notice of findings and findings. A writ of mandate may be taken from the findings to the appropriate superior court. Such writ must be taken within 45 days after the mailing of the notice of findings and findings.