Obtaining Your California Contractors License 30 FAQs

Obtaining your California Contractors Licens FAQsLet’s begin with the Licensing Process:

1) Who must be licensed?

All businesses or individuals who construct or alter any building, highway, road, parking facility or other structure in California must be licensed by the Contractors State License Board if the total cost including labor and materials is $500 or more.

2) What are the advantages to having a contractor’s license?

There are many reasons to get a contractor’s license:

A. You can do jobs that are over $499.99.
B. You can take the customer to court if you are not paid. (Without a license, a contract of $500 or more is considered illegal.)
C. You can legally advertise your construction business.
D. You can pull building permits.
E. You are eligible for special discounts from many material suppliers.
F. You can join builders’ associations that offer job boards, plan rooms, and group insurance.

3) What are the licensing classifications?

The classifications are broken down into 4 categories.

1) A-General Engineering
2) B-General Building
3) C-Specialty classes
4) D-Limited Specialty classes​

4) What experience is required?

At least four years of journey level experience obtained within the previous 10 years is required to qualify for the exam. Credit is given for experience as a journeyman, foreman, supervising employee or contractor or a combination of experience and education.

5) What if I do not have four years work experience?

You may still qualify by substituting apprenticeship or technical training or other education for work experience. For example, you could receive a credit of up to two years for a college degree from any four year college. You don’t necessarily need a college degree. Transcripts showing course work in construction technology, drafting, accounting, etc., can also be substituted for a portion of the four-year requirement.

6) How do I prove my work experience?

You ask someone in the building trades (foreman, supervisor, journeyman, fellow employee, or business associate) who has direct knowledge of your work to sign a “work cert” (Certification of Work Experience). You do not need a work cert for each and every job, just an overview your experience that is trade specific. One person may sign for all four years of required experience if they have first hand knowledge of that experience.

7) Can I qualify with “self-employed” experience?

Yes! But be prepared to show proof of your experience. Check out my blog post discussing how the CSLB is reviewing/investigating more and more applications, especially those listed as “critical classifications.”

8) Can I use Owner/Builder Experience?

Yes.  O/B experience is reviewed separately to evaluate the amount of experience time you will be granted. On average, the time you are granted is at least ¾ to 1/2 of what you submitted. There are some insider tips to filling out the project list that I would be happy to assist you with through my application review service.

9) What happens if my application is not approved?

The application will be returned with a letter asking you to supply additional information or make corrections. You will have 90 days to comply with the letter.

10) Is there an Examination requirement?

Yes. The qualifying person must pass the Law & Business and Trade exams, unless he or she meets the requirements for a waiver of either one or both exams.

11) Does everyone take the same exams?

If this is your first license, you will take two exams: the Law and Business exam and the Trade exam. Everyone takes the same Law and Business exam. But every person takes a Trade exam corresponding to his or her particular trade (e.g., general building, plumbing, electrical).

12) What happens if I fail the exams?

The Law and Trade exams are scored separately, and you can take either exam as many times as necessary for 18 months (at $60 per retake). If you don’t pass within 18 months, you have to reapply. If you passed one of the exams it still counts for up to 5 years and would not need to be taken again during that 5 year period.

13) Is Workers’ Compensation Insurance Required?

Yes. Unless the entity has no employees, then a certificate of exemption can be filed with the Board. *The law now requires that roofing contractors must have W/C whether or not you have employees.

14) What is the cost to apply for a license?

The application filing fee is $300, the Initial License Fee is $180. NOTE: Fee increases go into effect on 7/1/2017.  Both of these fees can be paid when the application is submitted. If the applicant chooses to remove his or her application after submittal, only the Initial License Fee will be refunded.

15) Can I apply for more than one classification at a time?

No. You need a license number before you can apply for an additional classification. So, for example, first you might get a B license as a general builder, and then later add an classification such as a C-10/Electrician.

16) Does the CSLB recognize licenses from other States?

Yes. The CSLB has reciprocity agreements with Utah, Nevada and Arizona. It is possible to get a CA license if you hold a license in one of these states by only having to take the CA Law & Business exam. The key is, you must have been licensed in the other State for a minimum of 5 out of the last 7 years.

17) What happens if I get caught operating without a license?

It is a misdemeanor in CA, and the fines can range from $200 to $15,000. A citation would be issued that would remain at the Board for up to 10 years. So if or when you apply for your license, your application will be delayed for an extended period of time while they review the circumstances of the citation.

18) Am I required to be fingerprinted?

Yes. Fingerprints are required for all new applications, adding officers to an existing license, replacing the qualifier, etc.

19) What if I have a misdemeanor conviction from years ago? Can I still get my license?

Yes. You can still get your license but the application processing time will be greatly increased.  All fingerprints go through the CA Department of Justice and the FBI before being sent to the CSLB. At the CSLB the records will be reviewed by the Criminal Background Unit or CBU. The current backlog in the CBU is about four weeks. (stat as of 3/17/17)

20) Are there any financial requirements to qualify for a license?

Yes. The CSLB requires that you maintain at least $2500 in working capital.

Now lets discuss different titles or positions and business entities:

21) What is the difference between an RMO and RME?

RMO or Responsible Managing Officer is the qualifier for the license and may or may not hold any ownership in the company. An RME or Responsible Managing Employee is the qualifier for the license and may not hold any ownership in the company.

22) Can an RMO be a qualifier on more than one License?

Yes. An RMO can be the qualifier on up to 3 corporate licenses as long as he or she holds at least 20% ownership in each company.

23) Can an RME be a qualifier on more than one License?

No. An RME can only qualify one license at a time. He or she may have a Sole Owner license but it must be inactive while the person is acting as an RME.

24) Can an individual have more than one license?

Yes. An individual can have as many as 10 Sole Ownership licenses.

25) Can a Sole Owner also be an RMO or Qualifier on another License?

Yes. An individual can be an RMO on another license as long as he or she holds at least 20% or more of the company.

26) Should I Incorporate, operate as a Sole Owner or a Partnership?

a) The differences between these entities are that when a license is issued to a Corporation, it belongs to the Corporation. Qualifiers and Officers can come and go, but the license belongs to the Corporation.

b) A Sole Owner license does not have the protection that a Corporation has, but the license belongs to the individual.

c) A Partnership requires at least two members. A Qualifying Partner and a General Partner. If either partner leaves the company the Partnership License is automatically cancelled.

Read my blog post comparing corporations to sole proprietorships.

27) Can I form an Limited Liability Company or LLC

Yes. As of 1/1/2013, contractors are now allowed to form LLC’s.

28) Are there advertising requirements?

Yes. Your license number must be on ALL advertising materials.

29) Can I advertise that I’m bonded?

No. State law prohibits advertising that you are bonded or insured.

30) Can I offer Electrical services if I have a Plumbing license?

No. You can not advertise, offer, or enter into a contract to perform services for a classification that you do not hold.

If you have questions pertaining to your particular situation, contact me at Contractors License Guru@gmail.com, call/text 916-217-1852, or use the contact form below.

I will be more than happy to get into the details of your experience!