Under Labor Code §3700, a California contractor that has even one employee must:

Explanation

§3700 requires every California employer to secure the payment of compensation, and it allows exactly two ways to do it: a policy from an insurer admitted to write workers' compensation in this state, or a certificate of consent to self-insure issued by the Director of Industrial Relations. Failing to do it is a misdemeanour under §3700.5, and the money is serious — §3722(a) assesses $1,500 per employee employed at the moment a stop order issues, and §3722(b) assesses the greater of twice the premium the employer should have paid or that same $1,500 per employee for the period it went uninsured. On the licensing side, B&P §7125 requires a licensee with employees to keep a current certificate on file (until January 1, 2028 a licensee with no employees may file an exemption unless it holds a C-8, C-20, C-22, C-39 or D-49 classification; from that date only a §7029 joint venture with no employees is exempt), and §7125.2 suspends the licence by operation of law from the date coverage was required. (b) is a payroll tax form, (c) is the separate insurance §7071.19 requires of an LLC, and (d) is federal law with a 50-employee threshold.