Commercial cleaning and janitorial insurance in California

What a California janitorial company must register, carry and prove

A California cleaning company answers to two offices before it answers to a client: the Secretary of State for the entity and the Labor Commissioner for the janitorial registration. Sales tax is the easy part. The training and record rules are where owners get caught.

Registration: the entity, the Labor Commissioner and the city

Corporations and LLCs form through the Secretary of State's bizfile system. California has no general state business license, and it doesn't license commercial cleaning as a trade. What it does have is a cleaning-specific registration.

The Property Service Workers Protection Act (AB 1978 of 2016, amended by AB 547 in 2019; Labor Code sections 1420 to 1434) requires every janitorial employer to register with the Labor Commissioner. That means anyone with at least one covered worker, whether the worker is an employee, an independent contractor or a franchisee who mostly works as a janitor. Brokers, nonprofits, PEOs and franchisors that fit the definition get no exception.

The application costs $500, the registration lasts one year, and the $500 renewal is due by the anniversary date. Have these ready:

• your Articles of Incorporation or Organization and the Secretary of State's Statement of Information
• any fictitious business name statements
• your State Employer Identification Number and federal EIN
• proof of workers' comp if you have even one employee

You also keep records for three years: names and addresses, daily hours with start and end times, wage rates, the ages of any minors, and the hours and pay of every other covered worker. The Labor Commissioner's janitorial registration page has the forms and the public lookup. Confirm the current rule with the Labor Commissioner before you file.

Cities add their own layer. Sacramento, for example, issues no general business license, but its City Code chapter 3.08 requires every business operating there to hold a Business Operations Tax certificate and renew it each year. Check each city where your crews work.

Sales tax: your cleaning fees aren't taxed, your supplies are

California sales tax applies to tangible goods, not services. Under CDTFA Regulation 1501, a business that renders a service is the consumer of the property it uses along the way, so you pay tax when you buy chemicals, liners and machines. You don't charge it on the cleaning invoice. A seller's permit is only needed if you also regularly sell goods to customers. Confirm your setup with the CDTFA or your CPA.

Training: in person, every two years

The same Act requires at least two hours of sexual violence and harassment prevention training every two years, in person, for supervisors and for nonsupervisory janitors. New janitors and supervisors must be trained within six months of starting. The nonsupervisor session has to come from a peer trainer at a qualified organization on the state's list, unless none is available in your county. The employer pays. Unless a union contract sets other terms, Labor Code section 1429.5 set the fee at $80 per participant for sessions of 10 or more and $200 per participant for smaller sessions until January 1, 2026, with yearly California price-index increases after that. You document it on a signed DLSE form plus a sign-in sheet each participant signs at the start and at the end. The Labor Commissioner says in-person compliance began once the qualified-organization list was posted on January 1, 2024.

Two other rules touch some accounts. Contracted janitors at a covered health care facility can fall under the separate health care minimum wage when the facility acts as a joint employer or the janitor spends more than half of a workweek there. And school districts screen contractor staff who work around students, so ask the district what it requires before you staff a campus. We don't give legal advice on either; the Labor Commissioner and the district have the final word.

California workers' comp for janitorial crews

One employee is enough to require workers' comp in California, and the Labor Commissioner's janitorial application asks to see your certificate. Skipping it gets costly fast. When the state serves a stop order, Labor Code section 3722 adds a penalty of $1,500 for every employee on your payroll that day. Instead of that, the state can assess the greater of twice the premium you avoided or $1,500 for each worker you had while uninsured. It's one penalty or the other, not both.

California doesn't use the NCCI codes most states share. Its own rating bureau, the WCIRB, sets the classes, and janitorial contractors fall under class 9008, Janitorial Services, by contractors. Confirm the class with your carrier before you budget, and read our guide to janitorial class codes and payroll audits.

A few California-specific points for cleaning owners:

• Owners. Section 3352 lets certain owners opt out in writing: officers or directors holding 10% or more of the shares, general partners, and an LLC's managing members.
• Franchisees. A franchisee with no employees may still need its own janitorial registration, because the Act counts franchisees who mostly clean as covered workers.
• 1099 cleaners. Labor Code section 2775's ABC test presumes a paid worker is an employee unless all three prongs are met, including that the work is outside your usual business. A cleaner paid by a cleaning company to clean is hard to fit outside that line. Check with your CPA or an attorney, and expect the auditor to ask.

Payroll, not headcount, is what your comp premium is built on, so keep the estimate current as you add buildings.

What a California office client puts in its insurance exhibit

Public buyers in California write long exhibits, and they negotiate. The State Bar of California's 2026 janitorial RFP for its Los Angeles office at 845 S. Figueroa St., about 110,000 rentable square feet, is a good model of what a downtown building can ask for:

• general liability at $1 million per occurrence, $2 million aggregate and $1 million products-completed operations, with the Bar's trustees, officers and employees as additional insureds
• workers' comp with employer's liability at $1 million each accident and $1 million disease policy limit
• auto liability at $1 million covering owned, hired and non-owned vehicles
• privacy and cyber liability at $2 million, plus $2 million of professional liability
• a $5 million umbrella, carriers rated at least A:X, and endorsements (not just certificates) on file before work starts

Then the published Q&A changed the picture. The Bar dropped the professional liability requirement, cut the umbrella to $2 million and confirmed it wanted no bid bond. The RFP itself also required bidders to be a party in good standing to the SEIU United Service Workers West maintenance contractors' agreement. That bid has closed; it's here as an example of the detail to expect.

Two lessons. Ask in Q&A about any line you can't meet, and don't assume every client wants the same bond. That State Bar exhibit named no fidelity bond, while other buyers do. Our guides to contract insurance requirements and janitorial bonds walk through both.

Get a quote for your cleaning business →

Risks that hit California janitorial contractors hardest

A registration lapse can end a contract

In 2025 the Labor Commissioner fined a private university $40,000, the $10,000 maximum for each of four unregistered janitorial companies it hired, and fined each of those contractors $10,000 as well. The case started with a referral from the Maintenance Cooperation Trust Fund, a janitorial industry watchdog. A client fined over a vendor's paperwork has little reason to renew that vendor.

Harassment claims on night shifts

The training mandate exists because janitors often work alone after hours. If a worker sues over harassment by a supervisor or co-worker, general liability usually won't respond. That's an employment practices liability question, and many carriers ask whether your training is current.

Misclassified cleaners show up after an injury

If a cleaner you paid on a 1099 gets hurt in a client's stairwell and the ABC test says he was your employee, you may face an uninsured comp claim plus back premium at audit. Collect comp certificates from any subcontracted crew before it starts.

Wage floors keep moving

The state minimum wage is $16.90 an hour in 2026 and rises to $17.40 on January 1, 2027. Several cities set higher floors. Comp premium is figured on payroll, so every wage increase raises your premium base, even if your building count stays the same.

California cities and what changes in each

What moves the cost of insuring a California cleaning company

California premiums start with payroll. A larger crew, a higher city wage floor or a health care account that triggers the health care minimum wage all raise the base that comp is priced on. Limits come next: a building that asks for a $5 million umbrella costs more to win than one that stops at $1 million and $2 million.

Some costs of operating legally aren't insurance at all, but belong in your bid math: the $500 yearly registration and the peer-trainer fees for nonsupervisory training. The Insurance Commissioner also reviews statewide comp benchmarks every year, so check the current figures with your agent before you budget.

Your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require.

Our cleaning business insurance cost guide breaks down each line. Get a quote for your cleaning business →

Commercial Cleaning Insurance Group is a brand of The Allen Thomas Group, licensed in California (License #0G67847, NPN 7642818). Send us your Labor Commissioner registration number with your quote request and our team will check it against the clients you're bidding.