The bill, S.B. No. 338, amends Section 406.096 of the Labor Code to establish clearer requirements for workers' compensation insurance coverage for employees of building and construction contractors and subcontractors. It mandates that contractors must provide workers' compensation insurance for each of their employees, and subcontractors must do the same for their employees. Additionally, governmental entities entering into building or construction contracts are required to ensure that contractors certify in writing that they provide this insurance coverage. If a contractor employs subcontractors, they must also obtain written certificates from each subcontractor confirming their compliance with the insurance requirement.

The bill also specifies that subcontractors must provide their insurance certificates to the general contractor, who will then relay this information to the governmental entity. Furthermore, it allows contractors and subcontractors to obtain coverage through various methods, including group plans or owner-controlled consolidated insurance programs, as long as the coverage meets the satisfaction of the governmental entity's governing body. The changes will apply only to contracts entered into on or after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Labor Code 406.096 (Labor Code 406)