Category Archives: Contractor Jobs

Business Structures 101 for California Contractors

You’ve put in the hard hours, you’ve done the hard work, and you’ve finally passed the notorious CSLB exam. Now’s the time to submit your bonds and insurance to the CSLB and get your contractor’s license.

Not so fast. There’s one thing that many contractors overlook – every contractor needs to establish a company for themselves, whether they’re a day jobber working on roofs in their neighborhood, or a multinational company beginning work in California for the first time.

But what kind of business should you establish for your contracting business? How do you even decide? In this article, we’ll cover some of the essentials when it comes to deciding what kind of business structure you should establish for your contracting company.

The California Secretary of State and the CSLB

The authority that regulates business in California is called the Secretary of State, but the CSLB – as always – is the one who requires all contractors to register as a business in the state.

It’s important to note that while technically speaking you do not need to have a business or to be registered with the California SoS, it’s all but necessary for contractors to have their own business. Without a proper business structure and registration, you expose yourself to financial risk, liability risk, to reputational risk in case anything goes wrong.

Registering a Business: A Prerequisite for CSLB Licensing

Before you can apply for a contractor’s license from the CSLB, you must first register your business with the state of California. This is a critical step in the licensing process. The type of business structure you choose will determine the specific registration process you must follow – more on that later.

Once your business is registered, you can then proceed to apply for a contractor’s license from the CSLB. The application process involves demonstrating your qualifying experience, passing an examination, and getting fingerprinted for a criminal background check.

Remember, operating a contracting business without a valid license from the CSLB is illegal in California and can result in hefty penalties. Therefore, it’s crucial to ensure your business is properly registered and licensed before you start offering contracting services.

Sole Proprietorship: Simplicity with Personal Liability

For 99% of contractors, you’ll want to set up as a sole proprietorship.

In its simplest form, this means you are the only operator and only employee in the business. As you can imagine, this is the structure that independent construction specialists (those with Class C licenses) like plumbers, HVAC techs, and welders use, as they’re often one-man bands.

In California, contractors operating as sole proprietors must register their business with the county clerk’s office in the county where the business is located. They must also obtain an Employer Identification Number (EIN) from the IRS, even if they don’t have employees, as an EIN is required for certain federal tax filings.

Partnership: Shared Ownership and Responsibilities

A partnership is a business structure where two or more individuals share ownership. Partnerships can be general or limited in liability – which essentially defines what you’re liable for in case of losses.

In a general partnership, all partners share in the business’s profits and losses, and each partner is personally liable for business debts. In a limited partnership, one or more general partners have unlimited liability, while the limited partners have liability only up to the amount of their investment.

This setup is a good situation for family businesses or situations where you and some of your friends, family, or local community are all banding together to work together. This way, the people involved in your company’s success are liable for losses as well as profits.

When setting up a partnership, documentation is key. Partnerships require a written agreement detailing the division of profits, roles and responsibilities, and procedures for resolving disputes. Partnerships in California must register with the Secretary of State and obtain an EIN from the IRS.

Corporation: Maximum Protection with Increased Complexity

“Corporation” might be a dirty word nowadays, but for contractors, it can be a very useful business structure. A corporation is a legal entity separate from its owners, providing the most protection from personal liability, but the tradeoff is it takes tons of resources to begin – and even more to maintain.

Corporations have the most complex business structure and require more time and money to maintain. Corporations are required to hold regular board meetings, maintain corporate records, and file corporate income tax returns – all of which are extremely complicated and difficult, especially for corporations.

In addition to filing a formation of business with the California SOS, corporations must also adopt bylaws, issue shares of stock, and file an annual report. Corporations are taxed at the corporate rate and may face double taxation if profits are distributed to shareholders as dividends.

Limited Liability Company (LLC)

An LLC combines the liability protection of a corporation with the tax benefits and simplicity of a partnership. This, in addition to Sole proprietorship, are rather common in the construction world, as it blends both the liability protection of corporations with the freedom and flexibility of a sole proprietorship or partnership.

Owners of an LLC, known as members, are not personally liable for the company’s debts and liabilities. There can be as many members as you want to name. We have to recommend an LLC structure for your contracting business, it’s a nice balance of all the other various structures.

The Role of Qualifying Individuals in Business Structures

In California, every contractor license requires a qualifying individual, or “qualifier,” who has demonstrated their knowledge and experience through the application process and holds one or more license classifications. If you’re a contractor, you either are a QI or work for a QI.

A qualifier may be a Sole Owner, Qualifying Partner, Responsible Managing Employee (RME), Responsible Managing Officer (RMO), Responsible Managing Manager, or Responsible Managing Member.

Being a qualifier on a license can be a significant risk and liability. Under Business and Professions (B&P) Code section 7122.5, if the performance of an act or omission by the license constitutes a cause for disciplinary action, it also is a cause for disciplinary action against the qualifier, regardless of their knowledge and participation.

Conclusion

Choosing the right business structure for your contracting business in California is a critical decision to both your business’s success and your personal liability. It’s essential to consider your business’s nature, your personal risk tolerance, and your long-term business goals when making this decision, as this decision is extremely subjective and equally important.

When opening your business, it’s definitely worth the time to meet with someone who can help you make the right decision. Someone with experience in California law knows the tax codes, and has the general financial know-how that can provide individualized advice – these are definitely worth the money when opening your business.

Additional Reading

“Starting a Business Checklist.” California Secretary of State
“Employer ID Numbers.” Internal Revenue Service
“Partnerships.” Internal Revenue Service
“Corporations.” California Secretary of State
“Corporation Tax Rates.” Franchise Tax Board
“Contractors State License Board.” State of California
“Absentee Qualifiers.” Contractors State License Board

Do You Really Need to Join A Union To Become A Master Electrician?

If you’re an electrician or thinking about becoming one, you’re probably thinking about joining the union – whether that’s the national unions like the IBEW and NECA, or your local union like the CSAEW. If you’re even vaguely aware of electricians, what they do, and what the career entails, then surely you’ve at least heard of these.

These unions are the collective bargaining groups in the electrician’s field, and beyond the basic benefits of unions like arguing for wage and safety standards, the union serves as a psychological standard for electricians.

That is to say, being a union electrician carries a certain amount of prestige for electricians – it legitimizes many of them in the eye of the public. Likewise the title “Master Electrician” – it’s a title that everyone has heard from and it carries with it an air of trustworthiness and quality.

The thought that comes into one’s mind when one hears “master” versus “journeyman” or “apprentice” is that of a professional versus an amateur. Anyone who aims to be an electrician wants to be a master electrician.

What is a Master Electrician? And do you have to be in a union to become one? In this article, we’ll examine what a master electrician is, how to become one, and how the IBEW fits into this whole thing. Let’s take a look.

What Is A Master Electrician?

At the pinnacle of the electrical profession stands the master electrician—a title that signifies not just expertise but years of dedication, training, and hands-on experience. But what does it mean? What is a Master Electrician?

To be honest, it’s a little nebulous and frankly, ill-defined. A master electrician is actually not a specific title, like a journeyman or an apprentice. Rather, it’s a general signifier that suggests an electrician who has gone as far as they can go in their field.

What that means is typically a few things. A master electrician is a title that exists for electricians who have completed the apprenticeship and journeyman stages of their careers. They are people who have passed all the exams, gotten all the certifications, have worked the hours, and have overseen journeyman and apprentice electricians.

The specific requirements for becoming a master electrician vary by state, but generally speaking, it’s a title that only exists by necessity; it describes electricians who have surpassed journeyman status.

It’s also a term that seems to be dying out as the electrical profession continues to become more standardized. For example, California doesn’t create a distinction between these. You’ve satisfied the requirements to become a licensed C-10 electrical contractor, in which case, you get your license. Or you’re not. There’s no in-between.

In other states, like Arkansas or Colorado, there are distinctions between different types of electricians (some even getting as granular as apprentice journeyman electricians), so be aware of what the requirements are in your state. You may have to apply for a new license every single time you reach a new designation.

The long and short of it is what a master electrician actually is is vague at best, and meaningless at worst. There are some states where it doesn’t even exist.

Do I Have To Join The Union To Be A Master Electrician?

So now that you know that a master electrician simply means, well, being a good electrician for a long time, you can finally start moving in that direction. In some states, it’s a meaningless title or one that doesn’t exist. In others, becoming a master electrician is a quantifiable boost to your career.

Either way, the question remains: do you have to join the union to become a master electrician? In most cases, the answer is: technically no, but realistically yes.

Why do we say that? Well, because even though you are technically not required to be a part of any trade organization to become a master electrician in any state, the benefits of electrician’s unions are powerful. They provide invaluable resources that make getting any electrician’s license easier – they can definitely point you in the right direction to your master’s status.

You don’t need a union for anything as an electrician, really, but they do provide strong support for new electricians especially. However, you can still gain the same skills from non-union apprenticeships or non-union trade associations.

Union apprenticeships are known for their competitiveness and rigorous standards that will set you up in the professional for life, as well as induct you into the union, a big benefit to many just starting out. Union apprenticeships come with added prerequisites but offer better pay and benefits. Such apprenticeships are coordinated through partnerships, notably the International Brotherhood of Electrical Workers (IBEW) and the National Electrical Contractors Association (NECA).

Non-union apprenticeships offer more flexibility and are often preferred by those who wish to avoid union dues and seek a less structured work environment. local contractors or non-union trade organizations, such as the Independent Electrical Contractors (IECI) or the Associated Builders and Contractors (ABC) offer these apprenticeship programs and can be a good start for people who lack the money for union dues.

The reality is both pathways are equally viable. Electrical work is pure science that anyone can learn – even from a library – but both come with pros and cons that may fit your lifestyle better than the other.

The Transition From Apprentice to Master

The journey from an apprentice to a master electrician is filled with milestones and largely dependent on where you live. In some states, there are specific requirements that delineate between apprentices, journeymen, and master electricians. As we said before, in some states, the master electrician title does not exist at all!

In general, though, you’ll often see an hourly or yearly work requirement. That is to say, in order to be certified as a master electrician in certain states, you have to either work a number of hours or work for a number of years in a certain position.

For example, in Georgia, you can either do four years’ on-the-job training or four years’ apprenticeship and that’s it – you can get your license. In Arkansas, you need to complete 8,000 hours of work experience, AND 2,000 hours in the classroom, AND you have to pass an exam!

This underlines all the different definitions and standards for what makes a master electrician. In reality, what makes a master electrician depends on your local jurisdiction, on both a state and municipal level. If you’re reading this, you probably already know your area’s regulatory requirements. If you don’t – you need to get into gear!

Licensing and Regulations

Master electrician licensing is a complex tapestry of requirements that vary across states, and they become increasingly complex as you get more local – with town, municipal, and county regulations coming into play with state regulations as well. In some places, you’ll be up to your neck in licenses and regulations before you’re even a journeyman!

While the National Fire Protection Association’s National Electrical Code (NEC) serves as a foundational standard for many states, local jurisdictions often have their own specific requirements, modifications, and examinations, and as we covered in the last section, they can be radically different state-by-state.

In most cases; however, it’s a simple case of doing on-the-job training, in the form of apprenticeship, and then journeymanship. Only after completing these two steps can you reach the next level of becoming a master electrician.

Circling back to our central question: Do you have to be in a union to be a master electrician? The answer is no – with a ton of caveats.

While unions offer a myriad of benefits and can significantly influence an electrician’s career, they are not a mandatory or exclusive pathway to mastery. You don’t ever have to join a union to get your contractor’s license or to become a certified master electrician. And in many areas – like the 40 million people in California – master electricians don’t even exist!

That said, the electrician’s union is giant and popular amongst electricians for a reason – they do provide quite a bit of value to electricians just starting out and those at the end of their careers. If you’re just starting out, we recommend checking out an introductory meeting at your local chapter of the IBEW.

What Is the Best Degree for a General Contractor?

As a general contractor, you wear many hats (or helmets, if you want to keep your job) – construction expert, business owner, marketing professional, logistics maestro, engineering authority, and so on – all of which require knowledge and experience with a variety of fields.

While the beauty of general contracting is that you don’t need anything but job experience and hard work to reach the GC level, one does sometimes wonder if a college degree is necessary – or even beneficial to becoming a general contractor.

In this article, we’ll take a look at whether it makes sense to get a college degree if you’re planning to become a general contractor. Is it worth it? And if so, what degree makes the most sense if a general contracting career is in your future?

Do You Need A Degree As A General Contractor?

A general contractor is akin to the conductor of an orchestra, ensuring every instrument plays in harmony to create a symphony. From the initial design and planning stages to the final brick laid, they oversee every nuance of a construction project.

The cold reality is that being a general contractor is a ton of work. Sure, it’s physically taxing, with long hours and constant problem-solving, but for most contractors, we’re used to spending long hours on our feet, often in hot buildings or cold winds.

No, more significantly, being a general contractor is extremely taxing mentally. It requires you to constantly be in problem-solving mode, both on a micro and macro- scale. You need to pay attention to a thousand different things at once, often doing complex calculations and cost-benefit analyses in your head about materials, labor, and client expectations.

This leads us to our original question – do you need a degree as a general contractor? The answer is no. But do you need a flashlight when inspecting a job site at night? Nor do you need a worksite trailer when a tent would do. Sure, you can do without it, but education is like any tool – it can only make you better if you know how to use it.

A degree can arm you with the wide array of tools gen cons needs to not only survive as a general contractor – an extremely competitive field – but to thrive. All education and knowledge can give you a massive advantage over your competitors, so while you don’t need a degree, if you work at it, it’ll reap big rewards for you and your business.

What Is The Best Degree For a General Contractor?

If you’re thinking about becoming a general contractor, there’s a variety of different degrees out there that can benefit your business. While construction-related degrees used to be relegated to the worlds of engineering and architecture, schools across the country have begun offering construction-related degrees in things like general contracting!

That said, general contracting degrees are still rather rare and lack pedigree at this point in time. Usually, you find that the best educational opportunities for general contracting-specific education are local schools (like ours) that have established streamlined content relevant only to general contractors.

With that in mind, you’ll find that universities and colleges offer degrees related to only a few general contracting skills, like engineering or architecture.

Which of these types of degrees you pick isn’t specific. There isn’t really the best degree for general contractors. They all offer different things, with different pros and cons.

Bachelor’s in Building Science

  • Overview: A fusion of construction techniques with business acumen.
  • Key Subjects: Mathematics, design principles, building codes, construction methodologies, cost estimation, and project management.
  • Pros: Offers a panoramic view of the construction landscape, while also getting into the nitty gritty with mathematics and understanding of codes.
  • Cons: Few. Hard to tell if programs lean towards one or the other – business or construction.

Bachelor’s in Construction Engineering

  • Overview: As the name suggests, this degree yields an understanding of the technical and mechanical aspects of construction.
  • Key Subjects: Structural dynamics, geotechnics, materials science, and construction logistics.
  • Pros: Prepares students for the technical challenges of large-scale construction projects. An engineering degree means you can tackle any challenge.
  • Cons: Unlike many building science degrees, this program is often lacking in business programs.

Bachelor’s in Architecture

  • Overview: Architecture is basically an intersection of design with construction.
  • Key Subjects: Architectural design principles, building systems integration, and presentation and communication skills.
  • Pros: Ensures projects are both visually appealing and structurally sound. Forces you to work through real-world problems as you develop your work.
  • Cons: You might find yourself pigeonholed as an architect rather than a general contractor. If you like doing on-site work, this might not be for you

The Best Universities for General Contractor-Related Degrees

Want to get a degree in one of these fields? Here are some of the most well-respected degrees in the nation. While many of these universities are expensive, they may give you a leg up on the competition not only in the pedigree of their classes but also in the value of their network.

What’s really important is you choose an area of expertise that is interesting to you, as that will give you the best chance of success in your field.

Building Science:

Construction Engineering:

Architecture:

There’s No Wrong Answer Here

When it comes to becoming a general contractor, the wonderful thing is that there is no wrong answer. It’s one of the things we love about our profession – anyone, from any walk of life, can work hard, acquire the right skills, make the right moves, and ultimately become a general contractor!

That is to say, we neither recommend going to, or skipping school as a general contractor. If it works for you, there’s certainly a lot to gain. If you’d rather skip school and start getting experience, that path is relevant as well.

While many of us turned to the construction field because we didn’t like school, the potential upsides of going to school for general contractor-related education far outweigh the negatives of going back to school.

And honestly, if you can’t hack it in the cushy halls of a college, you frankly won’t be able to handle the significant demands of effective general contracting. We always recommend arming yourself with knowledge – and in that vein, we have to say that more education is better. That said, everyone’s situation is different, so make sure it makes sense for you.

Additional Reading

National Association of State Contractors Licensing Agencies
Best Degree Programs – Construction Project Manager
College Consensus – Construction Degrees

Does a Contractor Have to Pull Permits?

Introduction

“Does a contractor have to pull permits?” is a question that every contractor runs into at some point early on in their careers. Given the legal ramifications of running afoul of local codes and regulations, it’s no wonder this is a question that gives many a new contractor cause for pause.

So – are contractors the ones who are responsible for pulling permits for the job? Or is it the construction manager, project manager, or maybe even the foreman on the job site? Does the responsibility change depending on whether you’re a general contractor or a Class C specialty contractor?

In this article, we’ll cover everything about permits: what they are, who is responsible for acquiring the right permit, the legal points surrounding permits, and so on. Let’s dig in.

What Does “Pulling Permits” Mean?

Pulling permits is a colloquial term used to describe the act of securing the necessary permits or authorizations from relevant governmental bodies. Usually, permits are given out by local governments like counties, cities, or townships.

These permits ensure that the construction or renovation work complies with local building codes, zoning laws, and other regulations. Actually “pulling” a permit requires a number of steps – involves submitting detailed plans of the proposed project for approval, and working with local government to make any changes until your plans meet the necessary code. After your project is approved, you’ll receive your permit – but whether or not you’re in violation of said permit may require inspections before, during, or after the construction.

The Legal Landscape

No matter where you do construction work, there’s a well-defined legal framework that mandates contractors to secure permits for particular types of work.

For example, the California Code of Regulations requires employers to obtain Project Permits and Annual Permits from Cal/OSHA before initiating specific construction activities. These regulations aim to ensure that all construction activities meet the safety and quality standards set by the state.

Who is Responsible for Pulling Permits?

As always with construction, the responsibility for pulling permits…depends on so many factors.

This burden generally falls on the contractor overseeing the project, but that could be anyone from a general contractor to a homeowner installing a new window. In a typical construction company, however, the task of applying for, compiling, and maintaining permits is often assigned to a project manager, or in some cases, a designated permit expediter.

They are responsible for understanding the types of permits required, gathering the necessary documentation, and liaising with the relevant authorities.

However, in some cases, either the homeowner or a licensed contractor can secure the essential permits. This would be in situations where it’s you doing work on your own home, or where you’re an out-of-town GC who hires a local. In many cases, the local will know the permitting system in their local jurisdiction better than you would, so in that case, they may offer to take care of that (often for an additional fee).

How to Obtain a Permit

Obtaining a permit usually involves several steps, but they’re rather straightforward and follow simple common sense.

  • Identify The Type of Permit Needed: Different projects may require different types of permits, such as building, electrical, or plumbing permits.
  • Develop Plans: Create detailed plans for the project that comply with all local bylaws and regulations.
  • Submit Plans: Now take your plans and submit them to the relevant authority for review and approval.
  • Pay Fees: There are usually fees associated with permit applications. Most of the time they are paid upon submission, but you may also be waived the fee in the case of a permit rejection.
  • Await Approval: Once submitted, the application undergoes a review process, which may take anywhere from a few days to several weeks. Not much you can do in this step of the process but prepare your resources for deployment when you do get approved.
  • Receive Your Permit: If your permit is found to be compliant with the authority’s regulations, you will receive your permit! If not, you will usually get a chance to re-apply for a new permit.

What Requires a Building Permit in California?

While California is stringent about environmental regulations, each municipality interprets these regulations uniquely for their specific area.

Generally, projects that likely require a building permit in California include:

  • Demolition of an existing building
  • Roof replacement
  • Plumbing, electrical, and mechanical replacements
  • Adding an accessory dwelling unit (ADU) or a junior accessory dwelling unit (JADU)
  • Changing the layout of a house
  • The addition or removal of exterior walls
  • Stormwater
  • Grading
  • Mechanical Operation

It’s crucial to note that additional permits, such as stormwater, electrical, plumbing, grading, and mechanical permits, might be required based on the project’s scope.

Examples of Permits You Need For Construction In California

With one of the most complicated and comprehensive legal frameworks in the nation, California mandates contractors to obtain permits for almost any type of construction work.

The California Code of Regulations, for instance, requires employers to secure Project Permits and Annual Permits from Cal/OSHA for specific construction activities1.

You may also have to deal with permitting for the California Environmental Quality Act (CEQA). This usually involves an environmental review for projects that may have significant environmental impacts, ensuring sustainable development for projects that can affect the local ecology. These days, that’s most projects.

Here are some more types of permits you might run into in California, depending on your location, the nature of the job, and what role you have.

  • Annual Construction Permits: These permits are required for specific construction activities and are issued by the Division of Occupational Safety and Health (DOSH). More information on annual construction permits and the list of permit holders can be found on the DOSH Annual Construction Permit Holders page.
  • Construction Stormwater Permit: Construction projects in certain watersheds must apply for a Regional Water Board permit rather than a statewide permit. More details are available on the Construction Stormwater Program page.
  • Building Permits: These are required for various construction activities such as building garages, storage buildings, decks, carports, patio covers, and additions to single-family dwellings. More information can be found on the Building Department Documents page.
  • Energy Compliance Permits: Compliance with Title 24, State Energy Code, is mandatory for construction projects in California. More details are available on the Building Permit – Department of Planning and Development page.
  • Model Code Adherence Permits: Every three years, the State of California adopts new and/or updated model codes and adherence to these codes is mandatory. More information is available on the Building Permits and Inspection – Sacramento County page.

Do You Need To Pull A Permit As A Contractor?

Let’s answer the question once and for all: do you need to pull permits as a contractor in California?

And everyone’s favorite answer: most likely, but it depends!

California is a complex patchwork of legal standards, especially when it comes to construction. In addition to statewide regulations like sustainability standards, you have local codes and bylaws that are county, city, town, or even community-wide.

With that in mind, the reality is that you will most likely have to pull a permit as a contractor, at some point! The most important thing is you familiarize yourself with all the codes and regulations in the area you’ll be operating in.

It’s your responsibility to know the codes and adhere to them – or face the consequences, which can often be severe. Even if you’re not physically the one pulling the permits, you could face such penalties as a suspended or revoked CSLB license!

Additional Reading

California Department of Industrial Relations – Permit Requirements
Census.gov – Building Permit Survey
AvaTrade – What Are Building Permits?

Do Home Improvement Salespeople Need a Contractor’s License in California? A Complete Guide

Introduction

Looking to start selling home improvement contracts? You’re gonna need a CSLB license for that.

In this article, we’ll take a look at CSLB licenses for home improvement salespeople (or HIS): what they are, who needs them, and how you can get one right now.

What Is A Home Improvement Salesperson (HIS)?

So what is a home improvement salesperson or HIS? Well, quite simply, it’s a person who sells home improvement services on behalf of a contractor or contracting business.

According to the CSLB, a home improvement salesperson is a “professional who solicits, sells, negotiates, or executes home improvement contracts for a licensed contractor.” This includes any home improvement or remodeling job – even those that are under $500 in value!

Really, any task or job that requires the construction contractor to have a B-2 Remodeling Contractor’s license is a service that a HIS can sell. Whether a homeowner is looking to, say, install a new bathtub or build a patio, the HIS is their pathway to finding someone to do the job. While home improvement salespeople can’t do any builds themselves, they do 99% of the work when it comes to booking jobs for home improvement contractors.

Many HIS are in-house employees of contractors, and many work freelance with different contractors. There’s no right way to operate – freelancers may bring in even more commission by expanding their client base, but they also expose themselves to long periods of financial insecurity.

So now that you know what an HIS is, let’s dig into the license!

HIS License Registration Requirements And Regulations

If you’re looking to become an HIS quickly – and start selling home improvement services in your neck of the woods – you’re in luck! Working as an HIS can be extremely lucrative in the incredibly wealthy state of California and getting started is remarkably easy – especially compared to other contractor-related professions. All you need to do is get your CSLB HIS license.

Every person who sells home improvement services – no matter when, where, how or why – must be registered with the CSLB and have a valid CSLB HIS license. There are no exceptions to this – unlike contracting jobs under $500 – so, too do home improvement salespeople.

The good news is getting your HIS license is extremely easy, especially by CSLB standards. You only need two things to get your CSLB HIS license, so you can start working with contractors to book them jobs (and collect your sweet, sweet commission). These are:

  1. Be at least 18 years old
  2. Submit an application to the CSLB for your license

That’s it! You only need to be a legal adult for you to get your HIS license and start knocking on doors.

Do I Need A Contractor’s License To Be A Home Improvement Salesperson?

No, you do not need a contractor’s license to sell home improvement services in California. As we’ve discussed – you only need a CSLB Home Improvement Salesperson’s license to be an HIS in California.

While many B-2 Home Improvement contractor’s license holders may want to get their HIS license in order to book their jobs directly, the reverse is rarely true – most home improvement salespeople do not acquire a contractor’s license.

Exceptions to the Rule

Although all people who sell home improvement services technically need a CSLB HIS license, there are some exceptions, as always with the CSLB.

Anyone who falls under the following situations is exempt from needing a CSLB license:

  1. An officer of record of a licensed corporation, or a manager, member, or officer of record of a licensed limited liability company
  2. A general partner listed on the license record of a partnership
  3. A qualifying person, as defined in BPC section 7025
  4. A salesperson whose sales are all made after negotiations between the parties if the negotiations are initiated by the prospective buyer at or with a general merchandise retail establishment that operates from a fixed location where goods or services are offered for sale
  5. A person who contacts the prospective buyer for the exclusive purpose of scheduling appointments for a registered home improvement salesperson.
  6. A bona fide service repairperson who is employed by a licensed contractor and whose repair or service call is limited to the service, repair, or emergency repair initially requested by the buyer of the service

4 Steps To Getting Your HIS License

The registration process for a home improvement salesperson has been streamlined thanks to the CSLB’s online interactive forms. The whole process takes place online now and it can all be done in a matter of minutes, provided you have the right information.

Here’s 4 Steps to getting your HIS license:

Step 1: Gather all the information and details you need to apply. This includes your driver’s license to prove your age and identity, and

Step 2: Apply for your HIS registration. Fill this out right – the CSLB rejects over HALF of HIS applications, adding weeks or months to the time it takes to get your license.

Step 3: Fingerprint/Live Scan/Background Check. If you have anything on your criminal record, it will come up here. You may be disqualified from a CSLB HIS license – it really is up to the CSLB.

Step 4: Receive your license! You did it! Now you can start selling home improvement services in California!

Learn more about the process of getting your HIS license on the CSLB website.

The Key Differences Between a HIS License and a Contractor’s License

Home improvement salespeople and contractors have a mutually beneficial relationship, but the differences in expertise, safety compliance, and general skillset between the two could not be bigger.

The HIS license is the easiest CSLB license to get, for the following reasons:

  • No experience requirement (4 years journeyman experience for contractors)
  • No insurance or bond requirement
  • No CSLB exam
  • Cheaper fees
  • Less severe penalties for non-compliant work

Conclusion

If you’re an HIS in California and you don’t have your HIS license – well, what are you waiting for?

The CSLB has made being a licensed HIS easier than passing your driver’s test, and the turnaround time for you to receive your license is even quicker and easier.

Quit wasting time and get your HIS license now!

Is My Contractor Licensed and Bonded?

Whether you’re a homeowner looking to refresh the tile in your bathroom or you’re the CEO of a Fortune 500 company looking to expand your company’s data center assets, you need contractors to do the job.

But finding a good contractor to do the job is a tough thing to do. First, you have to identify the job you need done, then you need to actually find the person to do the job – which comes with its own set of responsibilities and problems for you.

The biggest issues when hiring a contractor are legality and expertise: there are millions of dudes out there with a hammer and some nails who could do a decent job on your project.

But how do you know that the project won’t fall apart immediately after they leave the job site? And how do you know you won’t be in big trouble after the fact, both financially and legally?

The easiest and most direct way to know if you’ve got a contractor worth their salt is if they’re licensed and bonded. This single characteristic immediately makes your search for the right contractor that much easier.

Let’s find out why.

Why Hiring Licensed and Bonded Contractors Matters

In California, the law stipulates that all contractors working on a project valued at $500 or more must be licensed by the Contractors State License Board (CSLB). This mandate ensures that contractors meet certain standards of professionalism and expertise.

So we’ve covered the licensing side of things – contractors are licensed by the CSLB – but what about being “bonded”?

Being “bonded” simply means the contractor has secured a surety bond – a type of insurance that protects the client if the contractor fails to complete the job, doesn’t pay for permits, or fails to meet other financial obligations.

This amount is a dollar amount that any homeowner is entitled to, should the contractor not fulfill their contract. The idea is that you at least get something for your troubles.

As of 2023, the CSLB requires licensed contractors to hold a contractor’s bond worth $25,000 – that means, in the event of a contract breach, customers are entitled to receive an amount of up to $25,000 to cover their losses. Note that you will not always receive this amount, but this is the amount that is available in this situation.

Probably the most important bit of anything bond-related is that every contractor in California is required to hold a surety bond. That’s right – anyone who has a valid CSLB license also has a surety bond, as per the CSLB’s laws.

That’s it for a quick-and-dirty overview of bonds and licenses. If you’re interested in the nitty-gritty of bonds, the CSLB has all the information available on their website.

How To Verify a Contractor’s License and Bond in California

So, how can you confirm if your contractor is licensed and bonded in California? Here’s how to check a license in three easy steps.

  1. Ask for the contractor’s license number: Any contractor worth talking to will have their CSLB license number easily available – either on their business card or company website. If they’re reluctant to provide it, that’s a red flag.
  2. Verify the license number: Use the CSLB’s online License Check tool to check the validity of the license. This tool will not only immediately tell you if a contractor is licensed (and bonded), but it also shows if there are any disciplinary actions against the contractor.
  3. Check their bond: while no contractor can obtain a CSLB license without proof of a $25,000 surety bond, it is still possible for a contractor to cancel their bond after getting their license. You can check on the validity of their bond by asking the contractor directly for their bond information and cross-referencing it with their bond company.

What Happens If I Hire An Unlicensed Contractor?

If you’re tempted to skip the whole “is my contractor licensed and bonded?” question, pump the brakes first. The consequences of hiring an unlicensed contractor can be severe in many ways.

From the start, there’s a reason someone is operating as a contractor without a license – they probably lack the skill to get a license. An unlicensed contractor may lack the necessary skills and standards to do the job of a professional.

While you may be stoked about the cost savings of an unlicensed contractor (funny how they can always offer to do a job for cheaper, huh?), the ultimate cost of hiring an unlicensed contractor outweighs the nominal cost savings.

Many unlicensed contractors simply lack the skill and expertise of a licensed contractor who has been through the grueling CSLB process. The effects on your expensive construction project can be catastrophic and can cause your project’s cost to double, triple, quadruple, and so on.

And that’s even if they finish the project! In many cases, unlicensed contractors simply take your money and run – and since they’re unlicensed, you have no recourse. You are stuck with the bill, the unfinished project, and the need to hire a licensed contractor to fix their problem. Sounds like you should have just hired a licensed contractor in the beginning (that’s the whole idea here!).

And even if you get your job done right, you could still be in massive trouble for getting an unlicensed contractor to do the work. California’s Business and Professions Code 7118 states that the punishments for employing an unlicensed contractor for work costing $500 or more can include a fine of up to $5,000 and/or six months in jail.

Imagine that – jail, just to save a few pennies for a subpar job.

All of the consequences of hiring an unlicensed contractor is why we cannot stress this enough: hire a licensed contractor for Pete’s (and your) sake!

What To Expect From Clients As A General Contractor

As a general contractor, you have a billion things you need to be thinking about every day – but what’s more important than growing your business?

The reality for general contractors is that most – if not all – of your jobs come via word of mouth, and the only way to conjure up some word-of-mouth traction within your community is by delivering on the expectations clients have for you.

At the end of the day, people just want their expectations fulfilled, but for construction clients, what are those expectations? And how do you go about making sure you deliver on them?

In this article, we’ll take a look at customer expectations for contractors – and how you can improve your reputation in your area with a few simple tips.

What Do Clients Expect From General Contractors?

The best way to understand what to expect from clients is what do clients expect from you? Getting in your customers’ heads is the easiest and most direct way to meet their needs – which is ultimately what’s going to leave them happy and satisfied with your service.

Here’s what clients expect from you and your team:

Detailed Planning and Execution: In news that will surprise absolutely no one, clients first and foremost expect their general contractors to have a comprehensive plan for their project. In a survey conducted by Construction Business Owner, 85% of clients stated that a well-defined project plan was a key factor in their selection of a general contractor. You’re the expert – and every expert needs a plan.

High-Quality Craftsmanship: Every project is a client’s baby, so they always expect the best possible craftsmanship delivered. According to a report by Builder Online, craftsmanship ranks as one of the top three considerations for homeowners when selecting a builder or contractor, solidifying this notion. Especially as you take on bigger jobs, the more the client will demand perfection on your builds.

Regular and Transparent Communication: As we said above, the project is the client’s baby – and they will be monitoring that baby 24/7. A study by eSUB revealed that 96% of clients consider regular and transparent communication as a critical factor in their overall satisfaction with a construction project. In the always-online world we live in, expect clients to be demanding constant updates. Sadly, we have no choice but to oblige.

Professionalism and Integrity: In the construction world, professionalism is often overlooked – but the client always notices. Customers expect you to maintain a clean and safe worksite, be organized and efficient, and always be honest and upfront about any issues that arise in the process. Honestly, if you’re not professional, you probably won’t become professional any time soon – so if you need this advice, all of these other pieces of wisdom are useless.

Problem-Solving Skills: Problem-solving skills aren’t just expected, they’re essential to surviving as a general contractor in any place in the world. After all, what is construction but a series of problems in need of solution? The data confirms clients care about your ability to roll with the punches – according to a report by ConstructConnect, 78% of clients value a contractor’s ability to provide innovative solutions to construction challenges.

How To Make Your Clients Love You As A Contractor

Now that we know what the client expects – how can we meet these expectations? And how can we go above and beyond to make them love our work (and therefore, recommend your services to others)?

Here are some ways you can immediately win customers over just with soft skills.

Embrace The Client’s Dreams

Clients often approach general contractors with a clear vision of what they want. This vision can range from detailed architectural plans to a simple sketch on a napkin. As a general contractor, it’s essential to understand and respect this vision, as it forms the foundation of the client’s expectations.

Even if you think it’s the dumbest or most infeasible idea in the world (to a limit, of course) – it’s up to you to not only understand this vision but to earnestly try to make it a reality, to the best of your abilities. You don’t have to agree with the vision or goals of the project. No, your job is to make it a reality.

Furthermore, it’s critical that you are emotionally conscious of the homeowners’ feelings in this process. As we’ve said before, construction projects are the baby of your client – they care about them more than most things in their lives, so they are emotionally attached to their success. If you care for it the way they do, they notice – and will hire you again because of it.

For instance, a client might approach you with a vision of a sustainable home, complete with solar panels, a rainwater harvesting system, and a green roof. This vision is not just about the physical structure they want to build. It’s also about their commitment to environmental sustainability and their dream of living in harmony with nature.

As a general contractor, you are not just building a structure; you are helping to bring a dream to life. This understanding can add a deeper layer of meaning to your work and can help you connect more deeply with your clients – which means more money in your pocket.

Communicate, Communicate, Communicate. Then Communicate Some More!

As you can probably tell from the things clients expect, the one thing clients really value is good communication.

Clients have varying levels of knowledge about construction, and it’s always your job as a general contractor to bridge this gap. Regular updates, clear explanations, and open dialogues are all part of this communication process. In general, if you think it’s something your client would find important, share it. The best way to make a client feel comfortable is to not surprise them with any information.

Dealing With Challenges

In the world of construction, change is the only constant, and challenges are the only companion on this strange journey of floodplains and exhaust manifolds. The reality is there will always be some problem facing the project – and with that comes tension.

It’s crucial that when you face challenges, you maintain a calm, professional, and confident presence when dealing with problems with your client. Remember, they’re trusting you with the entirety of their project, so any energy you put out there radiates through the whole thing.

Stay calm and work with the client on solving the problems you are facing. There may be times when the client seems unreasonable, but at the end of the day, as long as the checks are clearing and you’re not doing anything unethical or dangerous, it’s not your place to make the final calls.

Trust: The Name Of The Game

What’s the one thing that every client looks for in a contractor? Trust.

They want someone who they believe in and think can execute on the vision they have for this project in their heads. They want someone that they know will respect their ideas, has the ability to get the job done, and can execute the idea on time and on budget. They want someone they can leave alone with their baby.

That’s what trust is – your client knows that when they hire you, they’ve got someone who can do the job, at a fair price.

If you’re a good contractor who can do the job properly and isn’t taking advantage of the client – congratulations! Your client probably trusts you.

If you don’t satisfy all of those criteria, well…there’s a reason the phone isn’t ringing. And it starts with you.

Common Problems Facing New General Contractors

Just got your CSLB Class B License and are ready to strike out on your own as a general contractor?

First off, congratulations! Becoming a CSLB-certified general contractor is no joke, and you’ve worked hard to get to this point. Now you’re ready to start taking on jobs – a process that can be both exhilarating and terrifying at the same time.

By now, you’ve got enough experience working on jobs as a journeyman or contractor, so you know what to expect when it comes to handling the on-site responsibilities of a general contractor – but what about the rest of being a general contractor?

Yes, once you become a general contractor, your days of drilling or digging are over. Now you’re the boss, and you’ve got different things to worry about – and these are the types of things nobody teaches you.

Here are some of the most common problems that new general contractors run into – so you can be prepared when they show up.

Juggling Multiple Tasks And Projects 

One of the very first issues for general contractors is managing all the multiple areas of general contracting at once. You’ve got to handle both on-site and off-site duties all at the same time, from dealing with materials vendors to overseeing a weld, to talking to your client, to paying your taxes on time.

As a general contractor, one of the first things you need to learn is how to juggle all these various tasks and demands at once. When you’ve got a project going on, people will be asking you things, all day, every day, from the moment you wake up, to the moment you go to sleep.

Be ready for an eternal onslaught of information when you start working as a general contractor, both coming in to you and out of you. You need to be a prism to everyone involved in the project – you should be the one harnessing the whole project and then channeling out the energy.

The complexity of managing multiple projects is further compounded by the need to coordinate with various stakeholders, including clients, subcontractors, suppliers, and regulatory authorities. Each stakeholder has different expectations and requirements, adding another layer of complexity to project management.

Mismanagement can lead to project delays, cost overruns, and damaged reputations, especially if they happen more than once, but the reality is that you’ll never be able to handle every task perfectly, every time. In fact, a study by McKinsey & Company found that 98% of large-scale construction projects incur cost overruns or delays.

In this situation, it’s important – as always – to first remain calm, and then, assess the situation. Once you’ve taken a moment to consider what to do, then you can take action and – again, calmly – begin fixing the problem with your team.

Always maintain calmness and clear-mindedness when dealing with a problem on a job site. You are the prism. You set the tone for the job, and it’s important you maintain an aura of calmness. 

Unpredictable Weather

More pertinent than ever now for general contractors just coming onto the scene is to always stay aware and flexible when it comes to weather. 

For example, July was the hottest month in human history, and in California in particular, we felt it. In that situation, you need to be aware of the extreme heat and take caution, like adding more shade to your job site or enforcing mandatory water breaks.

It’s important to not only prepare for the worst when it comes to weather as a general contractor, but it’s also important to budget for it. According to the National Oceanic and Atmospheric Administration (NOAA), weather-related delays cost the construction industry over $4 billion annually.

While weather forecasting tools can provide some guidance, their accuracy is not always guaranteed, making weather-related disruptions a constant concern for contractors. You must always have contingencies for any weather issues.

Unpredictable Material Costs

The cost of construction materials is another common problem for general contractors, especially these days. Prices can fluctuate wildly due to factors such as supply chain disruptions, changes in demand, or geopolitical events. 

These fluctuations are often sudden and random and put a ton of strain on the already tight budgets of general contractors. And costs have only increased recently – a report by Turner & Townsend revealed that construction costs increased by 5% in 2022 due to rising material prices. And considering the, let’s say, shaky ground that the economy is on as of writing this, it’s important to constantly stay ahead of any cost issues. 

In addition to the direct impact on projects themselves, extending the lengths of projects, and more. Most importantly, it can make it difficult for contractors to accurately estimate project costs, which obviously affects your bottom line both in terms of captured profit and in terms of missed opportunities due to overbidding.

Skilled Labor

The construction industry is currently grappling with a shortage of skilled labor. 

The problem is further exacerbated by an aging workforce and a lack of interest among younger generations in pursuing careers in construction. According to the U.S. Bureau of Labor Statistics, the construction industry will need to hire 430,000 more workers in 2023 to meet demand – a number that seems unlikely to be met.

As a general contractor, this presents a massive problem.  The labor shortage is not just a numbers game. It also involves the quality of the workforce. 

The construction industry requires a wide range of skills, from manual labor to technical expertise, and fewer workers means fewer subcontractors you can trust. Trust is a key factor of building a quality team that can complete the jobs you worked so hard to earn – so this skilled labor shortage is a real issue.

We honestly don’t have much advice here – this is a deep issue that no single gen con can fix. The only thing we can say is if you find a good sub that delivers good work, HOLD ONTO THEM!

Regulatory Compliance Issues

General contractors must navigate a complex web of regulations and standards that are constantly changing – from building codes and safety regulations to environmental guidelines. While it’s difficult, it’s no excuse.

Non-compliance can result in hefty fines, project delays, and even legal action in many cases.  A study by the National Association of Home Builders found that regulatory costs account for 24.3% of the final price of a new single-family home.

In this situation, it’s often good to delegate your compliance issues to a legal advisor or a lawyer. Anyone who is an expert in compliance can make a huge difference to a general contractor, and like many subcontractors you’ll hire, they’re well worth the money.

Slipping Safety Standards

Maintaining high safety standards is a critical but challenging task for general contractors. Construction sites are inherently hazardous, and accidents can lead to injuries, fatalities, and legal liabilities – which is why OSHA reported that one in five worker deaths in 2022 were in construction. 

Contractors must implement rigorous safety protocols and ensure that all workers adhere to them to minimize risks, and considering the thousands of little things that general contractors have to pay attention to on a job site, safety standards can often be lacking.

You can help ease the burden of safety standards by…well, setting a standard. If you establish a standard of strict safety on your job sites from day 1 of any project, your team will follow them. Remember, you’re the prism – the rest of the job follows your beam of light.

Any good general contractor knows that a culture of safety where all workers are aware of the risks and take proactive measures to mitigate them not only results in a safe workplace, it means less stress. 

Stay Calm And Fix The Problem

The one thing you can always, always, always do as a general contractor is stay calm and focus on solving the problem.

It doesn’t matter where the problem came from or who was involved or any of that – as a general contractor, you are there to put out fires first and foremost. And again, remember, you set the tone for your entire job site – so by keeping calm and focusing on solutions, you encourage the entire team to respond in kind.

Further Reading

The State of the Construction Industry – Construction Industry Federation

Weather Impact on Construction – National Weather Service

Global Construction Material Cost Index – World Bank

The Construction Labor Shortage: A Global Perspective – International Labor Organization

Construction Regulations and Compliance – Occupational Safety and Health Administration

Safety Standards in the Construction Industry – National Safety Council

Reinventing construction: A route to higher productivity – McKinsey & Company

Billion-Dollar Weather and Climate Disasters: Overview – National Centers for Environmental Information (NCEI)

International Construction Market Survey 2022 – Turner & Townsend

Job Openings and Labor Turnover – January 2023 – U.S. Bureau of Labor Statistics

The Impact of Regulations on the Cost of Construction – National Association of Home Builders

Commonly Used Statistics – Occupational Safety and Health Administration

What Is A Journeyman And How Is It Related To My CSLB License?

Just moved to California as a contractor and need your CSLB license – as any contractor does – to start doing construction work in the State?

Or maybe you’re a fresh-faced 18-year-old, who sees a career in construction in the future, and you are looking for the path to making that a reality.

In any case, no matter what type of construction work you want to do in California, you need a CSLB license – and in order to get a CSLB license, you need to first become a journeyman.

But what is a journeyman? And how does it play into getting your CSLB contractor’s license? In this article, we’ll walk you through everything and anything related to being a construction journeyman.

Journeymen and Journey-level Experience

The CSLB defines a journeyman as anyone who has “journey-level experience”, which is anyone who “has completed an apprenticeship program or is an experienced worker, not a trainee, and is fully qualified and able to perform a specific trade without supervision.”

Unlike a novice or a trainee, a journeyman is fully qualified and capable of performing their trade without supervision. They are experienced, skilled construction workers who have specialty expertise in their area of operation – whether it’s a hands-on trade like plumbing or the more general practice of general contracting.

Despite the ability of a journeyman to essentially perform all of the jobs of a licensed contractor, a journeyman cannot do contracting work on their own – only under the supervision of a general contractor. That means that even if you have all the skills to perform construction work on jobs over $500, you still cannot do it. 

If journeymen are found doing contracting work, they are treated just like any other unlicensed contractor in the eyes of the law – facing all the same penalties, despite their skill and experience.

Do not do work on your own as a journeyman – wait until you’re a licensed contractor. You’re already on the path to becoming a licensed contractor, so why ruin it by breaking the law?

The Journeyman’s Experience Requirement

One of the essential requirements to obtain a CSLB contractor’s license is the journey-level experience requirement. This requirement means that you must have at least four (4) years of journey-level experience in your area of expertise. 

You must have four years’ journey-level experience in your trade. If you’re a plumber applying for a C-36 Plumbing license, you need four years’ journeyman experience as a plumber. You can’t, for example, do 4 years of general contracting work, and then expect to get an HVAC contractor’s license.

Exceptions From The CSLB Journey-level Experience Requirement

As always with the CSLB, there’s always exceptions to the rule. There are many situations where one may be exempt from the classical definition of “journey-level experience”.

Some situations where you can apply for an exception from the journey-level experience requirement include:

    • Education/Apprenticeship
      • The CSLB does allow anyone to apply for an exemption to the journeyman requirement by substituting four (4) years of technical training or apprenticeship training
      • Note – you must have at least one (1) year of practical experience.
    • Builder-Owner
      • In some situations, you can be exempt from the journey-level experience requirement if you built your own home. This is taken by the CSLB on a case-by-case basis.
  • Reciprocity
    • The CSLB has reciprocity agreements with a number of states – and if you’re a licensed contractor in these states, you can be exempt from having to start over again as a journeyman.

The Path To Becoming A Journeyman

Don’t have your journey-level experience but need some to get your contractor’s license? How do you even get your journeyman experience in the first place? 

An easy way to do it is to reach out to local contractors in your area and see if they’ll offer you an apprenticeship or work experience program in the area you’re interested in. You may not be making a ton of money, if you’re making money at all, but think of it long term – you are building your knowledge base and your abilities so that you can start bringing in the big bucks for the rest of your life.

By working under a licensed contractor, you can not only learn the ropes but also perform the work you will ultimately be doing in your area of expertise. Look at it this way – most people go to university for four years only to leave with a diploma, hundreds of thousands of dollars of debt, and a degree in something that probably won’t be relevant in a few years anyway.

What’s a few years of learning the skills that will suit you for life – and being paid for it? Anyone with a bit of determination and an attitude of open-mindedness and learning can get their CSLB license – all it takes is a few years of hard work.

Additional Reading

Can a Contractor Work Under Someone Else’s License in California?

Are you an experienced contractor who has just moved to California and wants to start working right away? Or maybe you’re just starting out in the construction industry and you need to get work experience? 

In either case, the thought has probably crossed your mind – do you really need to get your own California Contractors State Licensing Board (CSLB) contractor license? Why not just borrow a friend or family member’s contractor license?

In this article, we’ll cover everything you need to know about whether you can work under someone else’s contractor license in California.

Do I Need A Contractor’s License?

If you’re an experienced contractor with all the skills required to build, renovate, and repair, you might think, “Why don’t I just do the work without a license? I know how to do it.”

The answer is much like driving a car without a suspended license – it’s against the law, and if you do so, you could face serious criminal penalties, including jail time. (Now that we think about it, almost everything about CSLB licenses is like driver’s licenses!)

The CSLB – the legal authority here – requires ALL contractors to hold a valid CSLB contractor’s license in their specific classification, whenever performing work over $500.

So, Can A Contractor Work Under Someone Else’s License?

Strictly speaking, the answer is no – you cannot perform construction work on jobs with a value over $500, including materials, without a valid CSLB contractor’s license.

Here’s why:

  • A Contractor’s license is not transferable: A contractor license issued by the CSLB is strictly in the name of the license holder and is non-transferable. This fact effectively rules out the possibility of ‘working under’ someone else’s license.
  • Responsibility and accountability issues: The license holder assumes complete responsibility for all operations, including the quality of work and financial obligations. Allowing another contractor to work under their license could expose the license holder to significant risk and liability.

Exceptions to the Rule: The RMO and RME

While the general rule is clear, there are a couple of exceptions – the Responsible Managing Officer (RMO) and Responsible Managing Employee (RME). In these scenarios, it might appear as if a contractor is working under another’s license, but the dynamics are a bit different.

  • Responsible Managing Officer (RMO): An RMO is an individual who is a bona fide officer of the company and may hold as little as 10% of the voting stock. They have direct control and supervision of the company’s operations and can be held personally liable for violations.
  • Responsible Managing Employee (RME): An RME is an individual who is employed by the licensed entity and actively involved in the day-to-day activities of the business. The RME cannot engage in any other business that could detract from their duties for the licensed entity.

In both these roles, the individual’s personal contractor license becomes associated with the company, effectively allowing ‘working under’ the company’s license. Oftentimes this exception is used to gain the necessary work experience for a would-be contractor.

Remember, the CSLB expects the RMO or RME to exercise direct supervision and control, thus ensuring quality and consumer protection. Any issues with the work will mean the RME or RMO will be held personally responsible.

A Quick Word On Reciprocity

Although this is technically NOT an exemption to the contractor’s license requirements set forth by the CSLB, it IS possible to fast-track your contractor’s license in California if you hold a valid contractor’s license in Arizona, Louisiana, Nevada, and Utah.

Check out our blog post on reciprocity agreements for more information.

The Final Word: “No.”

In a word, NO, you cannot work under someone else’s contractor license in California.

There are a couple of exceptions – RMEs and RMOs – and it is possible to get your license in California without going through the regular route to get your license.

The penalties for doing unlicensed contracting work in California can be severe – including fines and prison time. When in doubt, assume that if you’re doing any sort of contracting work in California – you need your own contractor’s license.

Put it this way: you wouldn’t use someone else’s driver’s license to be legally able to drive a car, so why would you be allowed to do the complicated engineering of building a home?

Additional Reading