A contractor operates without workers' compensation insurance. Cal/OSHA or the Labor Commissioner may issue:
a.A warning letter
b.Only a small administrative fine
c.A referral to the CSLB for possible license revocation
d.A stop order prohibiting employment of workers
Explanation
Operating without WC insurance can result in a stop order immediately prohibiting the use of employee labor, as well as substantial fines of up to $100,000. The CSLB may also suspend the license.
Law Reference: Labor Code §3722This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)