Contractors: workers’ compensation insurance.

Senator Grayson's workers' compensation insurance legislation establishes stricter verification requirements and higher penalties for contractors who employ workers without maintaining proper coverage. The bill requires the Contractors State License Board to implement an evidence-based process by January 2027 to verify eligibility for workers' compensation insurance exemptions through audits and documentation.

The legislation institutes a tiered penalty structure for violations, with minimum civil penalties of $10,000 for sole proprietors and $20,000 for other business entities found employing workers without required coverage. Subsequent violations can result in penalties up to $30,000 per occurrence. The board cannot renew or reinstate licenses for contractors facing these disciplinary actions until they provide valid proof of workers' compensation insurance or self-insurance certification.

Under the new requirements, the board must include specific data about workers' compensation insurance violations in its annual legislative report. The reporting mandate includes tracking disciplinary actions related to false exemption certificates and failures to maintain proper coverage. These provisions aim to provide greater transparency around enforcement of workers' compensation requirements in the contracting industry.