The Contractors State License Board voted 7-3 to sponsor legislation that would create a limited workers' compensation exemption for licensees who self-certify they have no employees, adopting an amendment that lowers the proposed cap on exempt work to $2,000.

Board members and staff framed the proposal as a sunset-related negotiation to delay or modify a January 1, 2028 requirement that all licensees carry workers' compensation. "What we're talking about is potential $5,000 maximum for these licensees that self certify that they have no employees," a board member said when presenting the draft, and later moved to amend that maximum to $2,000. Chair Michael Mark moved the amendment on the floor and Rodney Cobos seconded it. The board approved the amendment and the sponsorship motion by roll call, with the motion passing 7 to 3.

Supporters said a modest exemption could protect small sole practitioners who do primarily service and repair work, while opponents warned the higher $5,000 threshold would be vulnerable to evasion. Miguel Galarza, answering an early question about worker classification, described the factors enforcement agencies examine: "If I'm telling you, you need to start at 7 and you end at 3:30, and you get a 1 hour lunch ... those are rules of employment." He pointed to EDD, IRS and state enforcement tests that can reclassify workers as employees and trigger back taxes, payroll insurance and penalties.

Industry commenters urged a lower cap or other safeguards. Mark Connelly of the Roofing Contractors Association of California asked the board to lower the amount to $1,000 to match the new minimum for maintaining a license. Registrar Fowke, on enforcement priorities, said the board will target egregious matters: "We do prioritize certain types of complaints... our thought there is, it's going to be for the more serious matters."

The adopted motion requires staff to pursue sponsorship of the revised bill and to note on the public-facing license lookup that an exempt contractor would be limited to $2,000 of work while claiming a workers' compensation exemption. The motion was moved and amended on the floor and seconded by Rodney Cobos; roll-call votes were recorded and the motion carried, 7 yes, 3 no.

What happens next: staff will seek a legislator to carry the measure, refine statutory language with counsel and enforcement staff, and continue stakeholder outreach. The board directed that the proposed cap and the self-certification process be clearly displayed on the board's public website so consumers can verify limits before hiring a contractor.