California Workers’ Comp Exemption
We file workers’ compensation exemptions for California sole proprietors, LLC members, and corporate officers. Send us your details and we’ll confirm whether you qualify and handle the filing.
When coverage is required in California
No minimum employee-count threshold — any employer with one or more employees must carry workers' compensation coverage, per the Department of Industrial Relations' own guidance.
Who can be excluded in California
Sole proprietors
A sole proprietor with no employees is not required to carry coverage on themselves and does not need to file anything with any agency. If they want to be covered, inclusion must be clearly stated in the policy or added as a coverage endorsement.
Partners
General partners are covered employees by default under Labor Code § 3352 and must execute a written waiver — accepted by the insurance carrier (which may backdate acceptance up to 15 days) — to be excluded from coverage.
LLC members
Managing members of an LLC are covered employees by default under Labor Code § 3352 and must execute a written waiver, accepted by the insurance carrier, to be excluded from coverage.
Corporate officers
An officer or director who owns at least 10% of the corporation's issued and outstanding stock may execute a written waiver (and must maintain health insurance coverage) to be excluded from workers' compensation. A lower 1% ownership threshold applies if a qualifying family member (parent, grandparent, sibling, spouse, or child) owns at least 10%. A SOLE shareholder who is also an officer/director is excluded automatically, unless the corporation affirmatively elects coverage for that person under Labor Code § 4151. The 10% threshold (up from 15%) took effect July 1, 2018 under SB 189; there is no cap found on how many qualifying officers may individually waive.
Construction rules in California
California's Contractors State License Board (CSLB) requires every contractor license application, renewal, reinstatement, or reactivation to have on file either a Certificate of Workers' Compensation Insurance/Self-Insurance OR a signed CSLB "Exemption from Workers' Compensation" form (13L-50) certifying the licensee employs no one subject to California's workers' comp laws. This construction-specific exemption is NOT available to five higher-hazard license classifications — C-8 (Concrete), C-20 (Warm-Air Heating/Ventilating/A-C), C-22 (Asbestos Abatement), C-39 (Roofing), and C-61/D-49 (Tree Service) — which must always have coverage or self-insurance on file (Bus. & Prof. Code § 7125).
How the exemption is filed
California is a hybrid regime: (1) sole proprietors are simply outside the default definition of covered "employee" and file nothing with any agency; (2) LLC members, general partners, and corporate officers/directors ARE covered employees by default and must execute a written waiver filed with their workers' compensation insurance carrier — not a state agency — to be excluded, per Labor Code § 3352; (3) separately, licensed contractors must satisfy the CSLB's own licensing-level requirement by filing either proof of insurance or CSLB Form 13L-50 with the Board — a genuine state filing, but tied to license issuance/renewal rather than a general-purpose workers'-comp exemption certificate.
- Statute
- Cal. Labor Code §§ 3351, 3352, 4151; Cal. Bus. & Prof. Code § 7125
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
The 10%/1%-family-ownership thresholds and the automatic sole-shareholder exclusion were confirmed directly against the codified text of Labor Code § 3352 fetched from California's official leginfo.legislature.ca.gov. Some older secondary sources describe a flat '100%-ownership/fully owned' rule for officer exclusion; that appears to be outdated relative to the current statute (last amended by SB 189, effective 7/1/2018) and was not used in this record.
Sources
- https://www.dir.ca.gov/dwc/faqs.html
- https://www.cslb.ca.gov/Resources/FormsAndApplications/ExemptionfromWorkersCompensationInsurance%2013L-50.pdf
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3352.&lawCode=LAB
Source material dated Cal. Labor Code § 3352 as currently codified (amended eff. 7/1/2018 by SB 189), accessed 2026-08-30; CSLB Form 13L-50 rev. 11/2022; DIR FAQ page undated. Compiled from official California sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with California Department of Industrial Relations (DIR) / Division of Workers' Compensation (DWC); California Contractors State License Board (CSLB) administers the separate construction-licensing filing or ask us and we’ll check it for you.
Workers' comp exemption filing in California
Tell us about your California business and we'll confirm whether you qualify for an exemption.