You have zero employees. Your C-36 exemption is a filing, not a fact.

What the rule actually says

Business and Professions Code 7125 lets CSLB issue or renew a license without a certificate of workers' compensation insurance in a short list of situations. The one that fits a one-person plumbing shop is subdivision (b)(1): the licensee "has no employees provided that the applicant or licensee files a statement with the board on a form prescribed by the registrar … certifying that the applicant or licensee does not employ any person in any manner so as to become subject to the workers' compensation laws of California."

Read the middle of that sentence. The exemption is not a status you hold by default because you work alone. It is a certification you file. CSLB’s form is called the Exemption from Workers' Compensation Insurance; it goes to CSLB Headquarters, and CSLB also accepts it through its interactive-PDF service online or by email at workerscomp@cslb.ca.gov. Until it is on file, nothing has been claimed.

That is the whole difference between your trade and roofing. Roofers have carried a comp requirement for over a decade regardless of employees; plumbers have not. What a C-36 has instead is a conditional exemption with an expiration date.

Two ways a C-36 loses it

The classification list. Section 7125(b)(2) also requires that the licensee "does not hold a C-8 license …, a C-20 license …, a C-22 license …, a C-39 license …, or a D-49 license, a subcategory of a C-61 license." C-36 Plumbing is not on that list. C-20 — warm-air heating, ventilating and air-conditioning — is. Plumbing and HVAC crossover is common, and a second classification sitting on the same license removes the exemption entirely, even if you never work under it. Pull your license record and read every class on it, not just the one you bid.

The first hire. Per CSLB, the moment you employ anyone in a way that makes you subject to California workers' compensation law, a filed exemption is invalid, and proof of coverage has to reach CSLB Headquarters within 90 days of the hire. Not at renewal. Ninety days. A helper you put on for a two-week repipe counts.

January 1, 2028 is written into the section

Section 7125 carries its own sunset in subdivision (i): "This section shall remain in effect only until January 1, 2028, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2028, deletes or extends that date."

SB 1455 (Chapter 485, Statutes of 2024) wrote both the version operative today and the version that takes over. In the replacement, the no-employee exemption survives only for a joint venture. A sole owner working alone has nothing left to file. That is a scheduled change in existing law rather than a mandate you are under today, and the Legislature could still move the date — but nothing has moved it yet, so plan on it. The full breakdown of the 2028 change is here.

What the exemption is not

It is a licensing status. It is not protection.

An exemption on file tells CSLB you have no employees. It does not pay a medical bill, and it does not replace income while you sit out eight weeks after tearing a shoulder pulling cast iron out of a crawlspace. A sole owner who elects into coverage is buying something the exemption does not contain. Those are two different questions, and the renewal form only asks you the first one.

It is also not a certificate of insurance. When a general contractor or a property manager asks for comp, a filed exemption is not the document they are asking for. GC and property-management agreements routinely require a comp certificate from every trade on the site regardless of headcount, and some vendor-onboarding portals will not open a job without one. That contract requirement is separate from what CSLB requires, and it is the most common reason a solo plumber ends up carrying coverage anyway.

If you ever put someone on payroll

This is where the numbers live, and they are not premium numbers.

SB 291 (Chapter 455, Statutes of 2025) added minimum civil penalties to Business and Professions Code 7125.4 for a licensee found to have employed workers without maintaining coverage: $10,000 per violation for a sole owner licensee, $20,000 per violation for a partnership, corporation, LLC or tribal business licensee, and subsequent violations not to exceed $30,000 total per occurrence. Those are floors, not ceilings.

BPC 7125.2 runs alongside them. Failure to obtain or maintain coverage that is required of you "shall result in the automatic suspension of the license by operation of law," effective on the earlier of the date coverage lapsed or the date coverage became required. Nobody at CSLB has to decide to suspend you, and the effective date can already be behind you. CSLB adds the part that costs money: "Any work performed while the license is suspended is considered to be unlicensed and disciplinary action can be taken."

That status is what BPC 7031 attaches to. Subdivision (a) bars a contractor from bringing an action to collect compensation without alleging they were duly licensed at all times during performance. Subdivision (b) lets whoever hired an unlicensed contractor sue to recover all compensation paid. A stale filing is a paperwork problem right up until it is a collection problem on a job you already finished.

The 1099 version of this

Plenty of solo plumbers are not really solo. You pick up a second set of hands for a repipe or a sewer replacement and 1099 them.

Labor Code 2750.5 ends with this: "any person performing any function or activity for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code shall hold a valid contractors' license as a condition of having independent contractor status." Holding a license is the precondition for independent contractor status, and the same section creates a rebuttable presumption that a worker performing licensed work is an employee. If that presumption lands, the certification you filed was inaccurate from the day you made the call.

The Labor Code sets out what follows when a worker is hurt and the employer has not secured compensation. Section 3706 lets the injured employee or their dependents bring an action at law against that employer for damages. Section 3708 presumes in that action that the injury was a direct result of the employer’s negligence, puts the burden of rebutting it on the employer, and removes the defenses of contributory negligence, assumption of risk, and negligence of a fellow servant. Section 3700.5 makes knowingly failing to secure compensation a misdemeanor, and Labor Code 3722 lets DIR serve a stop order and assess penalties per employee.

What CSLB is being told to build

SB 291 also changed how exemption filings get checked. Section 7125.7 moved from permissive to mandatory: CSLB’s verification process "shall include an audit, proof, or other means to obtain evidence" that a licensee claiming no employees actually qualifies, and CSLB is to report that process to the Legislature no later than January 1, 2027.

That process is not published and CSLB is not running it today. It is a requirement with a deadline. The practical read is narrow: a filing you could not support if someone asked is worth fixing while the asking is still hypothetical.

Two things to check this week

Pull your own license on CSLB’s license lookup at cslb.ca.gov and read the workers' compensation section. Confirm that what CSLB has on record matches your situation right now — every classification listed, and whether an exemption or a certificate is on file. Records go stale quietly: a class added years ago for one job, or a certificate that never got transmitted after a carrier change, and nobody calls to tell you.

Then decide the coverage question on its own merits instead of by default. If you are relying on the exemption, the filing has to be current and true. If you are bidding for GCs and property managers, find out what their agreements require before the certificate request lands at 4:40 on a Friday. The requirements checker maps your classification, entity type and crew to the CSLB rules, and Aster places coverage with carriers if the answer turns out to be that you need it.

Aster National Insurance Group, Duarte CA. CA Lic #0N10039. General information only, not legal advice and not a coverage determination. Any coverage depends on the terms of the policy issued. Statutes cited are current as of August 2026; check the current text at leginfo.legislature.ca.gov and cslb.ca.gov.