By Shauna Krause, President, Capitol Services
You may have gotten a headache from New Year’s celebrating, but wait there’s more!
2026 brings a new list of regulations, changes and challenges for contractor’s to know.
However, help is always available because after decades of assisting contractors with licensing and industry regulation, I know the only thing sure in a new year is things are going to change!…
As the Contractor’s Board tells us these new laws are important to know and understand, so let’s learn more in their own words and mine.
From the Board bulletin, contractors should be aware of new state laws taking effect on January 1, 2026, that may impact their business operations, contracts, and licensing. These changes, passed during the 2025 legislative session, aim to strengthen consumer protections, improve enforcement, and clarify responsibilities across the construction industry.
First up, AB 521 which clarifies that CSLB is not liable for attorney fees in civil claims involving a contractor’s cash deposit filed in lieu of a license bond. This change helps define CSLB’s role in such disputes and limits its financial exposure.
In AB 1002, the Attorney General (AG) and CSLB are now jointly authorized to bring civil actions to suspend, revoke, or deny a contractor’s license for failing to pay workers or comply with a wage judgment or court order. The AG must notify CSLB before initiating such action, and CSLB may choose to intervene or collaborate in the proceedings
AB 1327 says contractors working in the Home Improvement sector must now include their email address in home improvement contracts and allow buyers to cancel via email. Contracts must also include a telephone number to help buyers locate and complete the “Notice of Cancellation.” If this notice is missing, consumers may file a complaint with CSLB.
From the State Senate side of the aisle, SB 291 significantly increases penalties for Workers’ Compensation (WC) insurance violations. The Board must also develop a new process to verify WC exemption eligibility and report findings to the Legislature by 2027. Annual reporting of WC enforcement data is also now required.
A new exemption from licensure has been created for muralists in SB 456. Individuals who paint or restore murals under agreement with a legally authorized party are no longer required to hold a contractor license, provided the mural is a unique work of fine art painted by hand directly on an interior or exterior wall or ceiling, and protected by copyright or similar rights. This exemption does not apply to painted wall signs.
Contractors using subcontractors in home improvement projects must now disclose that information upon request in SB 517. This includes the subcontractor’s name, contact information, license number, and classification. While the prime contractor remains responsible for the overall project, subcontractors and home improvement salespersons may also face disciplinary action for violations
Beginning July 1, 2026, CSLB will increase minimum civil penalties for certain violation as required in SB 779. Fines for unlicensed activity will start at $1,500, and other specified violations will carry minimum penalties of $500 or $1,500, depending on the offense. These amounts will be adjusted every five years based on the Consumer Price Index.
Both I and the Board agree, contractors are encouraged to review these changes carefully and ensure their business practices and contracts comply by the start of the new year. For more information and updates, visit www.cslb.ca.gov.
And remember 24/7 365…
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com