Before Hiring Your First Employee in Your Construction Business: Avoid These Mistakes

Hey contractors! Starting your own construction business is an exciting journey. As you grow, hiring your first employee is a big milestone. To make sure this step goes smoothly, here are the biggest mistakes to avoid. Let’s dive in!

1. Failing to Verify a Potential Employee’s Qualifications

  • Before you hire anyone, always verify their qualifications. This includes checking their licenses, certifications, and work history. The Contractors State License Board (CSLB) makes it easy to verify licenses online here.
  • Example: Imagine hiring a carpenter for a major renovation without verifying their skills. Midway through, you realize their work is subpar, causing delays and extra costs. Avoid this by thoroughly checking qualifications upfront.

2. Forgetting to Gather References and Reviews

  • Always check references and reviews before hiring. It might seem like extra work, but it’s crucial. A reputable candidate should have no problem providing references from past employers or clients.
  • Example: Let’s say you’re considering two candidates for a project manager position. One has glowing references and reviews, while the other is hesitant about providing them. Choosing the first one reduces your risk of hiring someone who might not meet your expectations.

3. Failing to Hire Someone with Local Experience

  • Local experience is invaluable. Employees familiar with your area know local building codes and regulations, which can prevent costly mistakes and delays.
  • Example: If you’re working in Los Angeles, hiring someone who has previously worked in the area ensures they understand local seismic requirements. An out-of-town hire might not have this crucial knowledge, leading to compliance issues and project delays.

4. Skipping the Step of Checking Insurance and Legal Requirements

  • Make sure your new hire meets all legal requirements, including proper insurance coverage. Verify that they have liability insurance and workers’ compensation insurance if applicable. This protects both of you in case of accidents or property damage.
  • Example: During a roofing job, your new hire falls and gets injured. Without workers’ compensation insurance, you could be held liable for medical bills and legal fees. Always confirm insurance coverage to avoid such risks.

5. Failing to Get a Signed Employment Agreement

  • A written employment agreement is essential. Verbal agreements might seem convenient, but they can lead to misunderstandings and legal disputes. Your agreement should clearly outline the scope of work, employment terms, payment, and other essential details.
  • Example: You verbally agree on a job scope with your new hire. Later, they start demanding additional tasks and compensation. Without a written agreement, resolving these disputes becomes difficult. A clear, written agreement prevents such issues.


Hiring your first employee is a significant step in growing your construction business. Avoiding these common mistakes will set you up for success:

  • Verify the candidate’s qualifications to ensure they are fit for the job.
  • Check references and reviews to gauge their reputation and work quality.
  • Hire individuals with local experience for knowledge of local codes and established relationships.
  • Confirm insurance coverage to protect yourself from financial risks.
  • Get a signed employment agreement to ensure clarity and accountability.

By following these steps, you can feel confident in your choice of employee and pave the way for a smooth, successful business expansion. Keep building, and stay safe!

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About CSLS

Contractors State License Service (CSLS) is the largest school in California devoted to the Construction professional. For over 23 years, CSLS has helped its students pass the exam to become licensed contractors in the State of California, licensing more students than any other school. From our main offices in Southern California, CSLS operates over 25 locations with full-service support and classrooms. We have grown to this extent by providing quality, professional services. In comparison, this provides 7 times the number of convenient locations than the second largest contractor school. Contractors State License Services is one of the only contractor schools in the state that is run by educators, not lawyers or people mostly interested in the bonding and insurance business. Contractors State License Services formerly operated under the oversight of the State of California's Bureau for Private Post Secondary and Vocational Education. As of January 1 2010, the new Bureau for Private Postsecondary Education (BPPE) came into existence replacing the BPPVE. CSLS now operates under the provisions of the California Private Postsecondary Education Act of 2009 (CPPEA), Article 4 Section 94874(f). Our Mission is simple; We can help you pass your California Contractors License Exam. Celebrating our 25th year, CSLS has helped over 120,000 students pass the California contractor licensing exam to become licensed contractors in the State of California. Additionally, we offer complete home study and online contractor’s license programs to help you pass your California contractors license exam. CSLS offers licensing classes for all types of contractor licenses, including General Engineering Contractor, General Building Contractor, Specialty Contractor, Insulation and Acoustical Contractor, Framing and Rough Carpentry Contractor, Cabinet, Millwork and Finish Carpentry Contractor, Concrete Contractor, Drywall Contractor, Electrical Contractor, Elevator Contractor, Landscaping Contractor, Warm-Air Heating, Ventilating and Air-Conditioning Contractor, and many others. For a complete list of contractor licenses, visit and tuned for more informative posts.