The California contractor laws that changed in 2026 — and which ones bite

Seven new laws affecting California contractors took effect in 2026. Some are housekeeping; a few change the math on keeping your license active. Here's a plain-English run-through, weighted toward the ones that actually reach the license holder — starting with the two that raise the cost of a slip you might not even notice.

The two that raise the stakes on a lapse

SB 779 — unlicensed-work penalties jumped from $200 to $1,500

As of July 1, 2026, the minimum civil penalty for unlicensed contracting went from $200 to $1,500, with a maximum of $15,000. Related violations — aiding or abetting unlicensed work, or contracting with an unlicensed contractor — also carry a $1,500 minimum. The CSLB can adjust these for inflation every five years.

Here's why this matters even if you'd never work unlicensed on purpose: an expired or suspended license makes your work unlicensed — the same as if you'd never had a license. Under Business & Professions Code 7031 you can already lose the right to be paid for that work. Now the state's minimum penalty on top of it is 7.5× what it was.

SB 291 — steeper penalties for missing workers' comp

Effective January 1, 2026, SB 291 raised the minimum penalty for failing to carry required workers' comp to $10,000 for sole owners and $20,000 for other entities. That's separate from — and on top of — the license suspension a comp lapse already causes.

Comp is one of the four things that can block a renewal or suspend a license mid-cycle, and the classifications that need it even with no employees haven't changed — that's a separate track (SB 216, phasing in through January 1, 2028). SB 291 just made a lapse cost more.

The ones that change how you operate

AB 1002 — the Attorney General can now go after your license over wages

Since January 1, 2026, AB 1002 lets the Attorney General, alongside the CSLB, bring an action to discipline, suspend, or deny a contractor's license for failing to pay workers, or for an unsatisfied wage judgment or a violated wage-payment court order. If you have a wage dispute or judgment outstanding, it's now a licensing risk, not just a labor one.

AB 1327 — you must allow email cancellation

Also January 1, 2026: home-improvement contracts must let a customer cancel by email, and the contract must include the contractor's email address and phone number. This is a quick fix — update your contract template — but it's the kind of technicality that turns into a complaint if you skip it.

SB 517 — disclose your subcontractors on request

Prime contractors must now provide the name, license number, classification, and contact information of their subcontractors when the homeowner asks. You stay fully responsible for the project; you just can't keep the roster private anymore.

The ones most contractors can ignore

• SB 456 — muralists creating or restoring hand-painted murals are now exempt from needing a contractor license. Only relevant if that's your work.
• AB 521 — a narrow change shielding the CSLB from certain legal-fee liability in cash deposit disputes. No action needed on your end.

What this adds up to

The theme across 2026 is simple: the cost of an inactive or non-compliant license went up. Bigger unlicensed-work penalties, bigger comp penalties, and a new path for the AG to reach your license over wages all point the same direction — a lapse you don't catch in time is more expensive than it used to be.

None of these laws change the one thing that protects you: knowing your license is active and all four renewal blockers are clear, every day. Contractor License Vault watches your renewal date, workers' comp, bond, and entity standing daily and emails you the moment any of them slips — so a $1,500-minimum problem never starts with a lapse you didn't see.