California Contractor License Basics (CSLB)

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You need a CSLB license if the work needs a permit, you use employees, or the contract is $1,000 or more. Do not split a job to stay under $1,000. Diagram: Sac Business Launch.

1. See if the license applies

CSLB's "before you apply" page says a license is required when any of these is true:

• The work requires a building permit.

• You use employees for the work.

• The total cost of one or more contracts is $1,000 or more. Count labor and materials.

You cannot split one job into smaller contracts to stay under $1,000. CSLB says you must be licensed before you bid or contract, and it lists exceptions on that page. Read the exceptions there rather than guessing.

CSLB can issue the license to an individual, a partnership, a corporation, an LLC, or a joint venture.

2. Pick the classification

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Class A is general engineering, B is general building, B-2 is residential remodeling, and C is one specialty. The C list is on CSLB's site. Diagram: Sac Business Launch.

CSLB's classifications page and its description of classifications list:

• A, general engineering, for fixed works that need specialized engineering skill.

• B, general building, for structures that need at least two unrelated trades.

• B-2, residential remodeling, for nonstructural work on an existing residential wood-frame building, using at least three unrelated trades, with limits on structural, electrical, mechanical, and plumbing work.

• C, specialty classifications. The list is on the classifications page. Pick the trade you actually do.

A new applicant also takes an open-book asbestos exam. CSLB says that exam does not certify you to do asbestos abatement.

3. The qualifier

The qualifier is at least 18 years old. Within the 10 years before you file, they need at least four years of journey-level experience, or experience as a foreman, supervisor, or contractor, in that classification.

A responsible managing employee can qualify only one active license. They must work at least 32 hours a week, or 80 percent of the business's operating hours, whichever is less.

A person may qualify no more than three firms in one year, and only under the ownership conditions CSLB states. Read that section before you agree to qualify someone else's license.

4. The bond, and working without a license

File a $25,000 contractor bond, or a cashier's check for that amount, before CSLB issues the license. When a qualifier bond is required, it is also $25,000. CSLB's before-you-apply page does not add a separate financial net-worth test.

CSLB says a first unlicensed offense is usually a misdemeanor, with up to six months in jail, a fine of up to $500, or both, and a possible administrative fine of $200 to $15,000.

CSLB's office listed on its classifications materials is in Sacramento, at 9821 Business Park Drive, Sacramento, CA 95827. Confirm the address on the site before you mail anything.

If you hire employees once you are licensed, the payroll steps are separate. See hiring your first employee in California.

Common mistakes

• Bidding the job, then applying for the license.

• Splitting a $3,000 repair into three invoices under $1,000.

• A B-2 license used for structural work or to extend a plumbing system. Those limits are in the classification.