New Law Requires All Roofers to Carry Workers’ Comp Insurance

The new year brings an important regulatory change for roofing contractors. With the implementation of California Assembly Bill 881 (Emerson) as of January 1, 2007, all roofers — even those who have no employees —  are required to have workers’ compensation coverage.

What does this law (AB 881) mean to independent contractors in the building trades?

• If you do roofing work under a C-39 license, you will no longer be granted an exemption from carrying workers’ compensation insurance. All roofing contractors, regardless of the number of employees, must have workers’ compensation coverage as of January 1, 2007.
• In the event of noncompliance with this new law, the Contractors State License Board (CSLB) may delete the roofing classification from a contractor’s license.

What has changed from previous regulations?

• Previously, contractors were not required to carry workers’ compensation insurance if they certified that they have no employees or were otherwise exempt. This exemption remains in effect for all contractor licenses except roofing (C-39).
• In addition to mandatory coverage for roofers, AB 881 requires insurers to conduct annual audits of their roofing accounts and allows audit-related costs to be passed on to these policyholders. Also, the bill calls for the Workers’ Compensation Insurance Rating Bureau (WCIRB) to conduct an annual statistical analysis of roofing contractors.

What’s behind this new law?

• Rates for the roofing classifications are among the highest of all California industries. The high rates, and provision for roofers to declare themselves exempt from workers’ compensation requirements, have led to reports of misrepresented roofing payroll and other cases of premium fraud.
• By requiring all licensed roofers to have workers’ compensation insurance and to submit to annual audits, AB 881 applies a uniform standard for the industry. The new law protects the competitive edge of roofers who play by the rules as well as the health and security of roofing employees who depend on workers’ compensation coverage.