CSLB Law & Business ExamEmployment RequirementsEasy
A sole proprietor with no employees applies for a C-10 electrical contractor license with CSLB. Regarding workers' compensation insurance, what must the applicant do?
- AFile a Certificate of Exemption from workers' compensation with CSLB
- BPurchase a workers' compensation policy covering herself as the only worker
- CObtain a certificate of self-insurance approved by the Department of Insurance
- DNothing, since sole proprietors are automatically exempt without any filing
Show answer & explanationAnswer & explanation
Correct answer: A. File a Certificate of Exemption from workers' compensation with CSLB
A sole proprietor with no employees is not required to carry workers' compensation insurance but must file a Certificate of Exemption with CSLB certifying that they have no employees.
Why the other options are wrong
- B. Purchasing coverage is optional for a sole proprietor with no employees, not mandatory.
- C. Self-insurance certificates apply to employers with employees, not exempt sole proprietors.
- D. An affirmative filing (the exemption certificate) is still required; it is not automatic.
Workers' Comp Exemption Certificate (Sole Proprietor)
A licensed sole proprietor with no employees must file a Certificate of Exemption from workers' compensation with CSLB rather than carrying a policy.
- Filing is required even though coverage is not needed.
- If the proprietor later hires employees, a workers' comp policy must be obtained immediately.
- False exemption filings can result in license suspension and penalties.
Memory trick: No employees? File the exemption, don't just assume it.