Table of Contents,
- 1 Overview
- 2 Who needs a contractor license in California?
- 3 Identify the license classification you need
- 4 Why you need a contractor’s license in California
- 5 Contractor State Licensing Board (CSLB)
- 6 The basic licensing requirements
- 7 Penalties for contracting without a license
- 8 Steps to Become a contractor in California
- 9 Step 1: Requirements before you apply
- 10 Step 2 : Decide on your license type
- 11 Step 3 : Apply for the exam
- 12 Step 4 : Planning for the exam
- 13 Step 5 : Studying for the exam
- 14 Step 6 : Get your contractor license
- 15 Step 7: Register with the proper authorities
- 16 Step 8: Get liability insurance
- 17 FAQs
Are you great at working with your hands? Do you prefer to be your very own boss and lead a team? Then the existence of a general contractor may additionally be simply the job for you.
Being a customary contractor can be pretty lucrative, however it’s additionally one of the riskiest industries in the country. It’s rated in the pinnacle ten industries for each workplace accidents and fatalities.1 Because of this, California has license requirements that you have to meet in order to safely and legally function an enterprise in the development industry.
Want to know what the contractor licensing requirements are in the Golden State? Let’s get to work.
Who needs a contractor license in California?
If you’re wondering if you require a license in the State of California, the answer is probably yes.
The well-known rule is that a person or entity needs a license if they assemble or alter any of the following if the total price (including labor and materials) is $500 or more:
- Parking facility
- Railroad + excavation
- Any different structure
This guiding principle goes on to state that contractors, subs, and strong point contractors engaged in domestic improvement should have a contractors license earlier than submitting bids.
Essentially, these pointers consist of all contractors. So, if you’re a General Contractor, you need to have a license. If you’re a painter, you want a license. If your corporation installs windows and siding, get a license. In general, the CSLB is very strict on this point. However, there are a few exceptions.
Identify the license classification you need
Before you apply for your license, you want to make sure you’re making use of the right one. There are three normal kinds of contractor licenses in California. The type of work you do determines which license you need.
- Class A General Engineering Contractor License
The CSLB requires a Class A General Engineering License for any contractor “whose main contracting enterprise is in connection with fixed works requiring specialized engineering expertise and skill.” This consists of land leveling, earthmoving, excavating, trenching, paving, as nicely as cement and concrete work.
Projects generally requiring Class A licenses could consist of overpasses, underpasses, bridges, airports, power plants, pipelines, railroads, and highways.
These are large-scale, public works-type projects. Projects like these will take off beneath one or more engineers’ licenses, usually employed by a large development organization or engineering firm.
- Class B General Building Contractor License
The CSLB requires a Class B General Building License for any contractor “whose essential contracting commercial enterprise is in connection with any shape built, being built, or to be built, for the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind, requiring in its construction the use of at least two unrelated constructing trades or crafts, or to do or superintendent the entire or any section thereof.”
Here’s the gist: Class B is a California license for commonplace contractors. If you are bidding on and taking high contracts, you’ll need a Class B license. With a Class B license, General Contractors can take the framing contract on a project, but the venture should additionally include two unrelated trades as well.
- Class C Speciality Contractor License
The CSLB requires contractors specializing in a particular change to raise a Class C Specialty Contractor License. This license applies to electrical, plumbing, and HVAC subcontractors, to name a few.
CSLB designates over forty distinctive categories of Class C licenses. They include:
- C-5 Framing and Rough Carpentry
- C-9 Drywall
- C-10 Electrical
- C-27 Landscaping
- C-29 Masonry
- C-33 Painting and Decorating
- C-36 Plumbing
If you’re taking a prime contract on a task that does not require two or greater unrelated trades, you’ll be exceptional with a Class C license, provided you keep the license for that particular work.
Why you need a contractor’s license in California
A general contractor license, and any license a sub might have to carry, may appear like pointless pink tape. But that’s genuinely not the case. There are many legitimate reasons why carrying a contractor license in California is necessary for your commercial enterprise and the state’s interest.
A California contractor license makes you seem professional
If you choose to land jobs that pay massive bucks, you need to present yourself in an expert light. Providing your customers with your license ID range buys them some peace of mind.
In short, a license is exact for business.
A license ensures you’re capable
The kingdom doesn’t desire fly-by-night contractors working in construction, whether or not it be industrial or residential work. By passing the licensing exam, the state is certifying that you comprehend what you’re doing.
It ensures you’re insured and bonded
The country also needs to make certain that contractors lift the right insurance and bonds for something work they’re doing. The exceptional way to do that is to require proof of those compliances in order to get a license.
It’s the law
Most importantly, carrying a common contractor license—or other contractor license types—is a legal requirement in California.
In fact, the nation requires contractors, subs, and strong point contractors engaged in domestic improvement to raise a license earlier than even submitting a bid. Not solely are there fines and prison consequences (which we’ll get into later in the article), however unlicensed contractors may no longer have mechanics lien rights as well.
Contractor State Licensing Board (CSLB)
Contractor licensing in California is a function of the Contractor State Licensing Board (CSLB). Established in 1929, this governing body’s important purpose is to guard shoppers from predatory contractors and fly-by-night crews. The CSLB works to establish trade standards, ethics, and sound enterprise practices in the state.
In California, the CSLB works to make sure that contractors aren’t taking advantage of consumers. The board units the requirements, standards, and trying out for licensing. Generally speaking, the CSLB requires nearly all contractors to lift a license, with a few exceptions.
But that’s no longer all. The Statewide Investigative Fraud Team (SWIFT) works alongside the CSLB and performs normal stings and sweeps of development websites to find conceivable violations.
The basic licensing requirements
The general licensing necessities in California are highly straightforward. To qualify for a license in California, you must:
- Be 18 years or older
- Have the ride and competencies quintessential to manipulate the day by day things to do of a development business, which include area supervision (or have representation with the vital skills and experience to serve as your qualifying individual)
- Have four years of verifiable journey at the journey level, or as foreman, supervisor, or contractor in the classification you’re applying for
- Secure a $15,000 bond to protect buyers against defective craftsmanship and employees from non-payment. If you’re the use of a qualifying individual, their bond’s price is set at $12,500.
In California, all contractors must keep a contractor license bond. Two extra bonds can also be required:
- A Bond of Qualifying Individual for when the qualifier is a accountable managing employee OR when a accountable managing member, manager, or owner has less than 10% stock ownership
- An LLC Employee/Worker Bond when the enterprise entity is licensed as an LLC
There are no additional economic requirements. This is to guard shoppers from contractors flying underneath the radar by means of claiming they don’t earn ample income to qualify for a license.
Penalties for contracting without a license
Working as an unlicensed contractor comes with serious risk. Businesses that function contracting jobs above $500 without an energetic license face big fines and penalties below California law:3
First time offenses – Potential misdemeanor charge, which may want to result in 6 month prison time, a $500 fine, and an administrative best as high as $15,000.
Subsequent violations – A second conviction results in a minimal ninety day penal complex sentence and a pleasant that is either well worth 20% of the fee of the job, or $4,500.
Steps to Become a contractor in California
Step 1: Requirements before you apply
A California contractor’s license can be issued to an individual, partnership, corporation or LLC, or a certified individual.
To be eligible to be a licensed contractor in California, you want to be at least 18 years old, have a valid Social Security Number, and have the requisite journey and skills indispensable to safely operate a building business.
The solely predominant requirement earlier than you take the state examination is that you’re anticipated to exhibit proof of 4 years of expert ride (within the ultimate decade) as a journeyman contractor, foreman, owner-builder, supervising employee, or contractor.
CSLB can also supply credit scores for training, apprenticeship, or education, however it relies upon the college and the software you completed. If you do have qualifying scholastic training and/or experience, you will need to publish your legit transcripts. Generally speaking you can expect to receive some deposit for associated education, technical training, and vocational training:4
- Up to 1.5 years for an Associates of Arts degree from an authorized university.
- Up to 2 years of credit for a 4-year diploma in the fields of accounting, structure (B-General Building classification only), business, economics, mathematics, physics, or areas related to the precise trade or craft.
- Up to 3 years deposit for a Certificate of Completion of Apprenticeship from an accredited apprenticeship program.
If you lack the ride to satisfy licensing requirements, you should have a certified person follow for the license and then act as your representative. According to the Contractors State Licensing Board, “A ‘qualifier,’ is the person listed on the CSLB data who meets the experience and examination necessities for the license. A qualifying person is required for every classification on each license issued by way of the CSLB.
Step 2 : Decide on your license type
In the nation of California, there are three distinctive lessons of contracting licenses. There are specific necessities for each. It can be essential to recognize your desired profession direction as a contractor so you can study and work closer to the right class. The one-of-a-kind sorts of licenses you can reap are as follows:
Class A: This is a popular engineering contractor license. These are for engineers that specialize in repairs.
Class B: This is a license for a regularly occurring constructing contractor. This license is for those who deal with the building and the planning of new structures.
Class C: This is a uniqueness contracting license. These are for contractors who require unique competencies in fields like plumbing and electricity.
Step 3 : Apply for the exam
Do you meet the qualifications described above?
Then your next step is to observe for the licensing examination. To begin, you’ll want to complete the Application for Original Contractor’s License.
Be sure that your license software is thoroughly performed and proofread. Then ship it to the CSLB headquarters with the $330 utility processing fee. The address you’ll send it to is:
Contractors State License Board
P.O. Box 26000
Sacramento, CA 95826-0026
Step 4 : Planning for the exam
If your exam application is accepted, you’ll need to sign up for a test at a testing center in one of the a number places during the state, including:
- San Diego
- San Bernardino
- San Jose
You’ll obtain a Notice to Appear for Examination via mail, explaining the location, date, and time of the exam, as properly as different necessities such as identification.
Step 5 : Studying for the exam
The exam method is normally a two-part test.
Everyone must pass a fashionable Law and Business exam. Then, relying on if you’re planning to turn out to be a distinctiveness contractor in a unique industry, you may additionally need to take a 2nd chance exam.
The following are advocated assets you can use to find out about for the test:
- Exam find out about guides
- California Contractors License Law & Reference Book
- Law and enterprise find out about guide
Step 6 : Get your contractor license
After you’ve passed the state examination with flying colors, you’ll obtain a contractor bond and fee notification form from the testing site. It will tell you what you need to put up in order to acquire your California contractor license.
Requirements differ, however you may need to put up the following:
- An initial licensing rate of $200
- Contractor license bond or cashier’s check of $15,000
- Bond of Qualifying Individual (if applicable) of $12,500
- Completed asbestos open-book examination
- Certificate of Workers’ Compensation Insurance
- Proof of exemption from workers’ compensation insurance, if no employees
- Fingerprints submitted by means of Live Scan (CLBS will send instructions)
- LLC Employee/Worker Bond (if applicable)
- LLC legal responsibility insurance plan (if applicable)
Once this has been completed, your legit regular contractor’s license will be dispatched and you’ll be almost set to go.
All new general contracting corporations and LLCs in California are required to register their commercial enterprise with the Secretary of State’s office. The business name on your license needs to exactly match the title registered with the Secretary of State.
In addition, neighborhood areas all through the country have a range of nearby zoning, planning, and building permits that can also be required. Be positive to check with your local government to affirm that your I’s are dotted and T’s crossed.
Step 8: Get liability insurance
Although you may additionally not be legally required to carry any insurance coverage outside of commercial legal responsibility auto and workers’ compensation, it would be pretty unstable to function as a standard contractor besides conventional liability insurance.
This kind of insurance can assist guard you from economic damages incurred by way of 1/3 parties. It normally helps cowl the investigation, defense, and agreement from claims referring to to:
- Bodily injury
- Property damage
- Personal and advertising injury
How much does a California contractor’s license cost?
At a minimum, the total cost for a California contractor’s license is $699. That no longer consists of any more prices for additional fingerprinting or rescheduling an exam.
The software for licensing is $450.
The charge for the real license is $200, and it’s valid for two years.
You will need fingerprints taken to ensure that your criminal background is accurate. The fee for fingerprinting is usually $49.
Fees for extra fingerprint rolling are a possibility.
If you have to reschedule your examination for any reason, there is a fee of $60.
Once you have your license, you’ll have to hold it with the CSLB. Active licenses expire each two years, while inactive licenses expire each four. The CSLB will ship a renewal application roughly 60 days before your license is due to expire. You need to fill it out and ship it back with the renewal fee.
Timing is the whole lot with your renewal. If you send your renewal utility in on time, an active renewal will price $450, while well timed inactive renewals value $225. If you’re late with your application, the prices jump to $675 for energetic and $337 for inactive.
The CSLB recommends ordering a renewal on-line if you don’t acquire a renewal utility within forty five days of your license’s expiration date.
- Who should be licensed as a contractor in California?
All businesses or individuals that construct or alter any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by way of the Contractors State License Board if the combined labor and material costs for one or more contracts on the project is $500 or more. Contractors ought to be licensed before submitting bids.
- Who can be a licensed contractor in California?
A licensed contractor must be 18 years of age or older, have either a Social Security number or individual taxpayer identification number, and have the experience and competencies integral to manipulate the day by day things to do of a construction business, consisting of subject supervision, or be represented by any individual (a “qualifying individual”) with the essential ride and skills.
- What kind of experience is needed ?
At least 4 years of journey-level experience is required to qualify for the exams. Credit can be given for experience as a journeyman, foreman, supervising employee or contractor in the particular classification for which you are applying.
- Is school essential ?
No. There are no educational necessities to qualify for a California contractor’s license. You may additionally receive credit for technical training, apprenticeship training, navy training, or schooling alternatively of a portion of the required four years of practical experience. At least 1 year must be practical experience.
While training is now not necessary, an exam practice program designed round the topics covered on the examination can help you obtain self belief for passing your exam on the first try.
- Is there an examination requirement?
Yes. The qualifying individual (either you or your representative) is required to pass two written exams: one for business and law and one for trade knowledge. There are some conditions in which a waiver for the tests can be issued. CSLB schedules assessments after the utility is submitted, reviewed, and typically as complete.
- How much does it cost to apply?
As of July 1, 2022, there is a non-refundable $450 fee for an original application and a $200 initial license fee for 1 classification. The application fee for every additional classification is $150.
- Are there additional financial requirements you need to qualify for a license?
Yes. All applicants should submit to CSLB a contractor bond or cash deposit payable to CSLB in the amount of $15,000. CSLB doesn’t issue bonds.
- Is worker’s compensation insurance needed ?
All contractors who have employees should present proof of workers’ compensation insurance coverage. Contractors besides employees are required to file a certificate of exemption. However, C-39 Roofing contractors are no longer eligible for an exemption from the workers’ compensation insurance requirement.
- What other application requirements are needed there?
All candidates need to be fingerprinted (at an additional value to the applicant) and undergo a background check before CSLB will issue a license.