New year, new laws. Licensed California contractors have a number of new laws to keep track of in 2023, from increasing contractor bond amounts, increasing fines for certain activities, more leeway for armed service members, and a major update to workers' compensation insurance requirements.
Discover 5 new CA laws that will affect contractors and construction businesses in 2023.
SB216: Changes to CA Workers' Comp Laws for Contractors
SB216 changes workers' compensation insurance requirements for contractors, whether they have employees or not. Effective January 1, 2023, SB216 affects any contractor who holds any of the following licenses:
- Concrete (C-8)
- Heating, Warm-Air Ventilating, and AirConditioning (C-20)
- Asbestos Abatement (C-22)
- Tree Service (D-49)
If contractors with these licenses do not obtain workers' compensation insurance by July 1, 2023, the CSLB will remove their license classification.
Previous to SB216, only roofing contractors were required to carry workers' comp, whether they had employees or not. The groups mentioned above will join roofers in this new requirement in 2023, with more following until all contractors are covered by 2026.
Learn more about the new workers' comp law that will affect all contractors in CA.
SB607: New Limits on Contractor Bonds
SB607 increases the rates for CSLB qualifier, license, and minimum disciplinary bonds. The rate increase is changing from $12,500 and $15,000 to $25,000 as of January 1, 2023.
Passed in 2021, SB607 also required Department of Consumer Affairs (DCA) boards (such as the CSLB) to reduce military family members' application and license fees effective July 1, 2022.
The bill also:
- Changed the CSLB's authority to set fees and increase fee amounts
- Differentiated between individual owners vs. partnerships, LLCs, corporations, and joint ventures and authorized higher fees for non-individuals
- Authorized the board to set fees for issuing duplicate copies of certificates, changing business names, or for checks with non-sufficient funds (aka: dishonored checks)
Learn more about SB607.
SB1237 & 2105: Affect Active Duty and Veteran Contractors
SB1237 and SB2105 will impact contractors who are veterans or actively serving in the United States Armed Forces.
SB1237 updates current law that requires CSLB to waive renewal fees and requirements for any active duty CA licensee called to serve, and stationed outside of the state, in the U.S. Armed Forces or CA National Guard.
The bill expands the definition of "called to active duty" to align with definitions elsewhere in federal and state law and extends existing law to licensees on active duty during a "state of insurrection" or a "state of extreme emergency."
Think of SB1237 as an "active duty pause" for your contractor license and note that any contracting activities performed while in active duty status can end the pause and restart the clock on your licensing fees and requirements.
Learn more about SB1237.
SB 2105 requires the board to grant a 50% fee reduction for an initial license or registration fee to veteran applicants who provide specified documentation to the board proving they served as an active-duty member of the United States Armed Forces, including the National Guard or Reserve components.
The fee reduction can be applied to initial license and registration fees for home improvement salespersons. Please note that the fee reduction under SB215 does not extend to veterans who were dishonorably discharged.
Learn more about SB2105.
AB1747: Increased Penalties for Building Law Violations
Contractors who violate building laws will see an increase in civil penalties under AB1747 in 2023. The bill increases the fine from $8,000 to $30,000 for every violation of BPC Section 7110 (violations of building laws) and amends Section 7099.2 (assessment of civil penalties).
In addition to building permit violations specified in BPC 7110, AB1747 clarifies BPC 7110 to include the failure to comply with specific health and safety laws, water laws, safe excavation requirements, pest control requirements, illegal dumping, and other state laws related to building and insurance requirements.
Learn more about AB1747.
AB2374: Increases Penalties for Illegal Dumping
Assembly Bill 2374 amends Penal Code Section 374.3, which requires courts to notify CSLB and others when a licensed contractor is convicted of an illegal dumping crime in order for the board to publish the infraction on their website.
In addition to the public notice of illegal dumping, AB2374 increases the fines a court may impose for this crime and requires the court to order a person convicted of dumping commercial quantities of waste to remove -- or pay for the removal -- of illegally dumped waste matter.
Learn more about AB2374.