New C1 Non Structural Remodel Repair Contractor

C1 Non Structural Remodel Repair ContractorThe CSLB is proposing legislation to create a New C1 Non Structural Remodel Repair Contractor.

It’s about time!!

After years of forcing B General Contractor applicants to withdraw their applications because they couldn’t meet the unrealistic proof of experience requirements, the Contractors State License Board is actually doing something to help the industry! Shocker!!

Friday October 30th, the CSLB Licensing Committee will be holding a meeting to discuss the new C1 non structural remodel repair contractor classification.

It appears they realized that their creation of a list of critical classifications has actually been harming the consuming public, those who strive to become licensed contractors and business owners, the economy, and the construction industry as a whole. They even acknowledged, in writing, that their actions have created an “underground economy.” Can you believe it?!? The almighty, all knowing, all powerful Contractors State License Board admitted they screwed up and failed to fulfill their consumer protection mandate. These are historic times my friends!

C1 Non Structural Remodel Repair Contractor Details

This new C1 classification will allow the license holder to perform work that “provided that no load bearing portion of the existing structure is altered, added or moved; this includes footings, foundations, and weight bearing members.” Basically, it should allow the C1 contractor to bid, contract, and perform work that includes at least two unrelated trades that do not include framing.

Framing has been the nail in the coffin for many B General applicants. A very large percentage of B General applicants over the last 3 yrs have little to no framing experience, and many of those that did, did not have the paper documents to prove that experience. This new C1 classification will change all of that.

Here is the proposed language for the definition of a C1 Non Structural Remodel Repair Contractor:

832.01 Non-Structural Remodel/Repair Contractor A non-structural remodeling and repair contractor remodels and repairs existing structures of three (3) stories or less, built for support, shelter and enclosure of persons, animals, chattels or movable property of any kind; provided that no load bearing portion of the existing structure is altered, added or moved; this includes footings, foundations, and weight bearing members.

If you would like to read the entire committee agenda item, click here.

Looking forward, I see nothing that would stop this new C1 classification from becoming law. When it does become law, their will be a flood of new applicants who will have questions, and as always, I will be here to help them! I will also have C1 contractors exams study kits to prepare those who will be taking the exam.

Stay tuned, I’ll keep you updated on the new C1 Non Structural Remodel Repair Contractor as it unfolds.

 

CSLB Home Improvement Salesperson Registration

The CSLB home improvement salesperson registration law will change on January 1, 2016.

Of all the laws and rules and regulations the CSLB could be working to change, they decided to do something about HIS registrations. What about the myriad of underground regulations the CSLB has created regarding the licensure of targeted classifications?

Press releases like the one below always appear (to me) to be more of a smoke screen than anything else. As if to say “Look at us and what we’re doing to fix a problem very few were aware of… but don’t worry about how we’re profiling a majority of license applications.”

A 1000 applications a month? Seriously? That prompted legislative action? It’s a one page app for goodness sake!

What it really comes down to is … what can the CSLB do to make it easier on themselves. It has nothing to do with any inconvenience on the part of the applicant. The CSLB makes it very clear to almost every applicant who contacts them that they (applicant) are not the priority. For example, emails unanswered, phone calls not returned, ambiguous answers to serious questions, etc.

But hey…. If the CSLB can reduce their workload by processing fewer HIS applications, then WOW… good for them!!

Governor Brown Signs Bill Changing CSLB’s Home Improvement Salesperson Registration Requirements

SACRAMENTO — Home improvement salespersons (HIS) that represent licensed contractors when selling goods and services soon will only have to register once with the Contractors State License Board (CSLB). Governor Edmund G. Brown Jr. signed Senate Bill 561 into law yesterday, simplifying the HIS registration process to a single registration while still allowing salespeople to represent multiple employers.

Anyone who solicits, sells, negotiates, or executes home improvement contracts for a licensed contractor outside of the contractor’s normal place of business must be registered with CSLB as an HIS (Business and Professions Code section 7153).

The law takes effect January 1, 2016, and removes the current requirement that an HIS register separately with CSLB for each contractor that employs them.

The bill, authored by Sen. Bill Monning (D-Carmel) and sponsored by CSLB, will simplify and quicken the registration process in response to the rapid growth in the number of HIS applications, particularly for employees who work in the solar industry. CSLB received more than 1,000 HIS applications per month in fiscal year 2014-15, a 40 percent jump compared to the average for the previous three years.

In addition to the single registration provision, SB 561 will:
·         Require a contractor to notify CSLB in writing prior to employing a registered HIS, and when employment ceases;
·         Allow CSLB to accept an electronic application and signature from an HIS applicant;
·         Require an HIS to have a current and valid registration with CSLB before making sales calls and transactions on behalf of a contractor; and
·         Provide that registrations will be valid for two years from the month of issue.

CSLB staff is already at work putting systems in place for the new registration process. More information will be available in the weeks to come on CSLB’s website.

End press release

I would provide a link to this press release on the CSLB website, but apparently they send out press releases before updating their public website and there is no link for me to provide.

Who should certify your CSLB experience

Who should certify your CSLB experienceSo who should certify your CSLB experience and who shouldn’t?

And how should your trade experience be outlined on the license application.

Other questions are:

  • How many certifiers do I need?
  • Can my dad, mom, uncle, or brother be my certifier?

These are common questions that I’m asked all the time. And although it seems like this aspect of the license application is somewhat of a daunting task, it’s really not that bad.

Who should certify your CSLB experience?

  • If you are submitting experience as an employee, do not check the “self-employed” box in Line two. Enter the employer’s business name, license number, and business address. The certifier in this case could be the license holder, officer on the license, foreman or supervisor, fellow employee, or anyone who has first-hand knowledge of that experience.
  • If you are submitting experience as self-employed, do check the “self-employed” box in Line two, and leave the employer name, license number, address boxes blank. The certifier in this case could be a business associate, another journeyman, or a contractor listed in the same classification or above. I would avoid checking the “client” box because most people are not working for the same client 40 hours a week for four years. If you are, you should probably be on the payroll.

How many certifiers do I need?

You only need one unless your certifier is not certifying a full four year period. If you have one certifier that has first-hand knowledge of only two years of experience, then you would need a second certifier to cover the remaining two years. Submitting more than one work experience page for the same time period with different certifiers is not a benefit to you. It does not increase your chances of the application being accepted (aka “posted”).

Can your dad, mom, uncle, or brother be your certifier?

Yes. As long as they have first-hand knowledge of your experience and are qualified to know if your experience is at the journeyman level. The title they would select would most likely be “Business Associate” unless they are licensed. Then you would select the Contractor box and enter their license number.

What if you can’t use your employer as your certifier because it might put your employment status in jeopardy?

You could use a fellow employee or foreman/supervisor as your certifier. Submit a letter with your application stating that you do not want the CSLB contacting the employer directly because it could jeopardize your employment. The CSLB isn’t in the business of getting people fired from their jobs.

How should your trade experience be outlined on the license application?

The application states: “In the space below, list all specific trade duties applicant performed or supervised in the classification for which he/she is applying.”

This implies that the certifier has to fill out the experience outline. Although the implication is there, it is acceptable for you to complete the experience outline and have your certifier sign-off on it.

The outline should be generic, straight forward, and trade specific. Begin the outline with “Experience includes….” Then describe the trade duties you perform/supervise on a daily basis. Do not list administrative duties. These include, reading plans, getting permits, contacting clients, etc.

So who should certify your CSLB experience and who shouldn’t?

Hopefully I’ve laid it out in a way that explains it in a clearer, more understandable way. If you have questions regarding this topic, feel free to contact me. And remember, I do offer an application review service for only $100.

Critical Classification Application Under Review

Critical Classification Application Under ReviewI’m often asked, pretty much daily, what should an applicant do when they are dealing with a critical classification application under review.

If you are applying for the C10 Electrical, B General Building, A General Engineering, C20 HVAC, etc. and your application is under review, this email Q&A and I had with a C10 applicant might also help you or somebody you know.

Q. Based on my application you looked at, what are the odds of them accepting it without requiring more documentation?

A. Slim to none. They’ve been asking all applicants with a critical classification for additional documents.

Q. If the odds are very low they accept as is then what do they increase by if I include documentation (1099s, permits, materials receipts, tax returns) with the application on the first submittal or should I wait for them to ask?

A. You should submit any/all documents you have with the app. If they find it acceptable, they’ll schedule you for the exam. If not, they’ll ask for more documentation.

Q. I have lots of different documentation but not a fully complete timeline record of EVERYTHING. Do they show any leniency to applicants who include lots of information from the start?

A. Not that I’ve experienced.

Q. I do have enough documented experience over the last ten years to get a B but would only consider that if it was a stepping stone which made it easier to get the C-10 later. Do you think this would help me to get the C-10 if I put off applying for 2 to 3 years? Could having a B potentially work against me getting a C-10 in two to three years?

A. To get either you’ll have to provide the written documentation. The B requires experience in framing and at least two unrelated trades. The C10 could be easier to get if your experience is directly and solely related to the c10. If you were to get the B and then apply for a c10 in a couple three years, it might be harder to show at least 4 yrs of c10 experience. Also, if you have the B you cannot bid on or sign contracts for a single trade like the c10.

Q. Would it help to get sign offs on shorter term experience from more B contractors who I have done electrical for?  This goes back to the more information included with the original submittal, does it decrease the odds of them requiring more documentation / increase the chances they accept the application as is.

A. Submitting more work experience forms does not generally help or hurt. They’ve made the certifier a moot point because of the documentation requirement.

Q. Does it carry any weight if I include some projects done for homeowners and include their permits, check written to me, materials receipts, and invoice?

A. That would help. But the permit would have to be in your name in order for you to get “credit” for it.

Q. Do you think submitting a 1099 for experience where the employer box is checked is a red flag and should be used as self-employment experience instead? I know that the experience with the C-10 i work for definitely is an employee relationship rather than a contract type, I show up when he tells me to show up and act on his direction under his supervision.

A. How does the CSLB look at 1099s in this regard? As a 1099 “employee” you are working as self-employed. Only if you are on payroll for the company would you be considered an employee.

Q. Based on the letter you attached in your previous email showing request for more info to that applicant,  if I were to get a similar letter and respond with not enough documentation then would that void my application or would there be another opportunity to submit more? When does the application usually drop dead?

A. If you did not submit enough documentation to satisfy the licensing department they would send you an “options letter.” This letter gives you the option to withdraw the app, use some other qualified individual to act as the qualifier on your license, or go to a formal investigation. If you choose the formal investigation, they will send you to the exams and an investigator will be assigned. That investigator will ask you for more/the same documentation that the licensing unit asked for. The investigator will also contact your certifiers to verify your experience. If the investigator does not approve of your experience you can either withdraw the app or they will deny your app. A denial means you’d have to wait a year before reapplying, and you’d have a denial flag on your name in their system.

Q. If I do submit my application and it ultimately gets tossed then can I re apply later with other documentation? Does the CSLB keep a copy of previous applications on file and refer back to those in this sort of scenario?

A. As answered in Q6, a denial has a one year waiting period. If you withdraw the app on your own, you can reapply at any time. The new app would be subjected to the same documentation and you’d have to re-submit everything plus any new documentation.

Q. The above question sorta relates to if it helps to apply for a B first and what experience is submitted with that. I would hate to shoot myself in the foot.

A. The issue is… when you apply for an additional classification, they will not accept experience that you submitted previously for the original classification. If your contracts are only for C10 work, you’ll want to apply for the C10 with the initial license.

Q. If I do include lots of documentation with the application before they ask then could this tick off the reviewer by being overwhelmed with paperwork or does it make me look more serious and more well prepared? (sort of already asked this question above)

A. Better to send everything with the initial submittal. Saves them from having to send you a letter requesting the docs and having to sit on the application until you reply to their letter.

Q. How would you approach this if you were in my shoes?

A. Create a chronological binder with all the documentation I had, submit it with the application, cross my fingers.

Q. Do you think I should just suck it up and do another year working for the C-10 guy (1099) or would you suggest a different route to document experience if you think I should wait to have a better documented history?

A. This all depends on the documentation you have now. If you feel it shows a solid four years (minimum) of experience, I’d say apply now. If you went thru the app process and the cslb said you needed one more year, withdraw your app work another year, then resubmit everything.

Q. Guessing you have seen others in my same predicament so what has made the biggest differences for them being able to get their applications accepted?

A. How well prepared your documentation is.

Q. The C-10 guy I work for has mentioned partnering with me a few times. Would there be some mid-term benefits to going this route and getting on his license then applying for my own later? I am not sure how this works but have heard of others getting brought in that way. The guy is a bit hard to work for / with so this would be a last resort but good to know the answers if it comes to that.

A. This scenario is included in the cslb “options” letter. You could use someone else to be your qualifier. After X amount of years, you could apply to replace that qualifier on the license.

So if you find yourself with a critical classification application under review, let me know and we can discuss your specific circumstances. I offer a very affordable consultation service. Click here if you’d like to discuss what you can do.

S Corporations and Salaries

Continuing my research in comparing an S corporation to a sole proprietor, I found this article on nolo.com that discusses how to pay yourself, other officers, and shareholders.

S Corporations and Salaries: How much should I pay myself?

An S corporation (also called a Subchapter S corporation) is a small corporation that has elected to be taxed much the same as a partnership by the IRS. An S corporation is a pass-through entity—income and losses pass through the corporation to the owners’ personal tax returns. Many small business owners use S corporations. One of the biggest reasons is that an S corporation can save a business owner Social Security and Medicare taxes. However, this has become a hot button issue for the IRS.

An S corporation shareholder who performs more than minor services for the corporation will be its employee for tax purposes, as well as a shareholder. In effect, an active shareholder in a S corporation wears at least two hats: as a shareholder (owner) of the corporation, and as an employee of that corporation. This allows for savings on Social Security and Medicare taxes because such taxes need not be paid on distributions of earnings and profits from the corporation to its shareholders. Thus, to the extent they pay themselves shareholder distributions instead of employee salary, S corporation shareholder/employees can save big money on payroll taxes.

It’s up to the people who run an S corporation—its officers and directors—to decide how much salary to pay the corporation’s employees. When you are employed by an S corporation that you own (alone or with others), you’ll be the one making this decision. In fact, 70% of all S corporations are owned by just one person, so the owner has complete discretion to decide on his or her salary.

However, an S corporation must pay reasonable employee compensation (subject to employment taxes) to a shareholder-employee in return for the services the employee provides before a distribution (not subject to employment taxes) may be given to the shareholder-employee.

Unfortunately, many S corporation owners have gone overboard and had their corporations pay them no employee compensation at all, thus avoiding having to pay any payroll taxes. The IRS Inspector General found that in 2000 about 440,000 single shareholder S corporations paid no salary to their owners, costing the government billions in lost payroll taxes. As a result the IRS stepped up enforcement on this issue and audited thousands of S corps that paid their owners little or no salary.

If the IRS concludes that an S corporation owner has attempted to evade payroll taxes by disguising employee salary as corporate distributions, it can recharacterize the distributions as salary and require payment of employment taxes and penalties which can include payroll tax penalties of up to 100% plus negligence penalties. The IRS will do so if it concludes that the corporation paid the employee unreasonably low compensation for his or her services. For example, a CPA who incorporated his practice took a $24,000 annual salary from his S corporation and received $220,000 in dividends which were free of employment taxes. The IRS said that his salary was unreasonably low and that $175,000 of the dividends should be treated as wages subject to employment taxes. The court upheld the IRS’s power to recharacterize the dividends as wages subject to employment tax. (Watson v. United States, (DC IA 05/27/2010) 105 AFTR 2d ¶ 2010–908.)

Thus, as a general rule, it is advisable to have your S corporation pay you at least some salary–which can be on the low end of the reasonableness scale. How low can you go and still pay yourself a reasonable salary? There are no precise guidelines. IRS officials have stated that they make the determination on a case-by-case basis. Among the factors the IRS and courts consider are:

  • the duties performed by the employee
  • the volume of business handled
  • the type of work and amount of responsibility
  • the complexity of the business
  • the time and effort devoted to the business
  • the timing and manner of paying bonuses to key people
  • use of a formula to determine compensation
  • the cost of living in the locality
  • the ability and achievements of the individual employee performing the service
  • the pay compared with the gross and net income of the business, as well as with distributions to shareholders
  • the company’s policy regarding pay for all employees, and
  • the payment history for each employee.

After examining all the circumstances, they establish a range of reasonable salaries, from low to high. In one case, the IRS concluded that a reasonable salary for an Arkansas certified public accountant was $45,000 to $49,000. The accountant in that case had paid himself no salary and received $83,000 in corporate distributions. The IRS used salary information from a large financial services recruiting firm to determine what was reasonable. (Barron v. Comm’r, T.C. Summ. 2001-10.) Some IRS offices have software that provides salary information for a variety of occupations throughout the country. An S corporation (also called a Subchapter S corporation) is a small corporation that has elected to be taxed much the same as a partnership by the IRS. An S corporation is a pass-through entity—income and losses pass through the corporation to the owners’ personal tax returns. Many small business owners use S corporations. One of the biggest reasons is that an S corporation can save a business owner Social Security and Medicare taxes. However, this has become a hot button issue for the IRS.

An S corporation shareholder who performs more than minor services for the corporation will be its employee for tax purposes, as well as a shareholder. In effect, an active shareholder in a S corporation wears at least two hats: as a shareholder (owner) of the corporation, and as an employee of that corporation. This allows for savings on Social Security and Medicare taxes because such taxes need not be paid on distributions of earnings and profits from the corporation to its shareholders. Thus, to the extent they pay themselves shareholder distributions instead of employee salary, S corporation shareholder/employees can save big money on payroll taxes.

It’s up to the people who run an S corporation—its officers and directors—to decide how much salary to pay the corporation’s employees. When you are employed by an S corporation that you own (alone or with others), you’ll be the one making this decision. In fact, 70% of all S corporations are owned by just one person, so the owner has complete discretion to decide on his or her salary.

However, an S corporation must pay reasonable employee compensation (subject to employment taxes) to a shareholder-employee in return for the services the employee provides before a distribution (not subject to employment taxes) may be given to the shareholder-employee.

Unfortunately, many S corporation owners have gone overboard and had their corporations pay them no employee compensation at all, thus avoiding having to pay any payroll taxes. The IRS Inspector General found that in 2000 about 440,000 single shareholder S corporations paid no salary to their owners, costing the government billions in lost payroll taxes. As a result the IRS stepped up enforcement on this issue and audited thousands of S corps that paid their owners little or no salary.

If the IRS concludes that an S corporation owner has attempted to evade payroll taxes by disguising employee salary as corporate distributions, it can recharacterize the distributions as salary and require payment of employment taxes and penalties which can include payroll tax penalties of up to 100% plus negligence penalties. The IRS will do so if it concludes that the corporation paid the employee unreasonably low compensation for his or her services. For example, a CPA who incorporated his practice took a $24,000 annual salary from his S corporation and received $220,000 in dividends which were free of employment taxes. The IRS said that his salary was unreasonably low and that $175,000 of the dividends should be treated as wages subject to employment taxes. The court upheld the IRS’s power to recharacterize the dividends as wages subject to employment tax. (Watson v. United States, (DC IA 05/27/2010) 105 AFTR 2d ¶ 2010–908.)

Thus, as a general rule, it is advisable to have your S corporation pay you at least some salary–which can be on the low end of the reasonableness scale. How low can you go and still pay yourself a reasonable salary? There are no precise guidelines. IRS officials have stated that they make the determination on a case-by-case basis. Among the factors the IRS and courts consider are:

  • the duties performed by the employee
  • the volume of business handled
  • the type of work and amount of responsibility
  • the complexity of the business
  • the time and effort devoted to the business
  • the timing and manner of paying bonuses to key people
  • use of a formula to determine compensation
  • the cost of living in the locality
  • the ability and achievements of the individual employee performing the service
  • the pay compared with the gross and net income of the business, as well as with distributions to shareholders
  • the company’s policy regarding pay for all employees, and
  • the payment history for each employee.

After examining all the circumstances, they establish a range of reasonable salaries, from low to high. In one case, the IRS concluded that a reasonable salary for an Arkansas certified public accountant was $45,000 to $49,000. The accountant in that case had paid himself no salary and received $83,000 in corporate distributions. The IRS used salary information from a large financial services recruiting firm to determine what was reasonable. (Barron v. Comm’r, T.C. Summ. 2001-10.) Some IRS offices have software that provides salary information for a variety of occupations throughout the country.

http://www.nolo.com/legal-encyclopedia/s-corporations-salaries-an-irs-hot-button-issue.html

by: Stephen Fishman, J.D.

End of article

What will be interesting is what, if anything, will happen after the next presidential election. Several of the candidates are pushing for a flat tax or a use/consumption tax. Personally speaking, I agree with the flat tax, but it is something that would actually work.

Again, if you are interested in creating a corporation and incorporating your construction license, I can help. Send me an email and we’ll discuss your options.

Comparing Corporations to Sole Proprietorships

Comparing Corporations to Sole Proprietorships Comparing Sole Proprietorships  to CorporationsI’m asked all the time if a new contractor should be a sole proprietor (sole owner) or a corporation.

I’m currently a sole owner but have been incorporated in the past. I’ve been thinking of incorporating again for the possible tax benefits and personal liability protection and thought I’d do a little research. Below is an article I found on LegalZoom.com that compares the different types of business entities. I thought you might benefit from this information as well.

Comparing Corporations to Sole Proprietorships and Partnerships

Corporations enjoy many advantages over partnerships and sole proprietorships, but there are also some disadvantages to consider.

Advantages of a corporation versus a sole proprietorship or partnership

Shareholders in a corporation are not liable for corporate debts

This is the most important attribute of a corporation. In a sole proprietorship or a partnership, the owners are personally responsible for business debts. If the assets of the sole proprietorship or partnership cannot satisfy the debt, creditors can go after each owner’s personal bank account, house, etc. to make up the difference. On the other hand, if a corporation runs out of funds, its owners are usually not liable.

Please note that under certain circumstances, an individual shareholder may be liable for corporate debts, if, for example, a shareholder personally guarantees a corporate debt. Also, under certain circumstances, a court may determine that justice requires disregarding the corporate form and treating the acts and liabilities of a corporation as the acts and liabilities of the shareholders. This is sometimes referred to as “piercing the corporate veil.” Some of these circumstances where a court may decide to pierce the corporate veil include:

  • If personal funds are intermingled with corporate funds
  • If a corporation fails to have director and shareholder meetings
  • If the corporation has minimal capitalization or minimal insurance
  • If the corporation fails to pay state taxes or otherwise violates state law (like defrauding customers)

Corporations offer self-employment tax savings

Earnings from a sole proprietorship are subject to self-employment taxes, which are currently a combined 13.3% on the first $106,800 of income. With a corporation, only salaries (and not profits) are subject to such taxes. This can save you thousands of dollars per year.

For example, if a sole proprietorship earns $80,000, a 13.3% tax would have to be paid on the entire $80,000. Assume that a corporation also earns $80,000, but $35,000 of that amount is paid in salary, and $45,000 is deemed as profit. In this case, the self-employment tax would not be paid on the $45,000 profit. This saves you over $5,000 per year. Please note, however, that you should pay yourself a reasonable salary.

Corporations have continuous life

Unlike a sole proprietorship or partnership, a corporation does not expire upon the death of its shareholders, directors or officers.

Corporations make raising money easier

A corporation has many avenues to raise capital. It can sell shares of stock and create new types of stock, such as preferred stock, with different voting or profit characteristics. Plus, investors can rest assured knowing they are not personally liable for corporate debts.

Transferring the ownership interests of a corporation is easier

Ownership interests in a corporation may be sold to third parties without disturbing the continued operation of the business. A sole proprietorship or partnership, on the other hand, cannot be sold whole. Instead, each of its assets, licenses and permits must be individually transferred. Plus, new bank accounts and tax identification numbers are required.

Advantages of a sole proprietorship and partnership versus a corporation

Comparing Corporations to Sole Proprietorships and Partnerships

Corporations enjoy many advantages over partnerships and sole proprietorships, but there are also some disadvantages to consider. [Read more…]

5 Benefits of Becoming a Master Electrician

C10 Electrical California Contractors LicenseI found a great article on ElectricianTalk.com that discusses the benefits of becoming a Master Electrician. It provides some great advice and helpful information.

5 Benefits of Becoming a Master Electrician

Once you’ve worked as a journeyman electrician for a few years and gotten some skills under your belt, you may start to consider taking the tests to become a master electrician. The qualifying tests can be extremely difficult; some people take a month or more off work just to study for the tests.

Getting your license can seem like a full time job in itself, but it can definitely pay off in the end. The difference between journeyman and master can be seen on the job site, but the benefits of being a master also show before your first job as a master begins.

Professional Pride

If you take pride in a job well done, you’re probably the type of person who constantly tries to learn new and better ways to do your work. Leaning to do your job better can give you more confidence on the job. When you become a master electrician, you know you have the knowledge and experience to take on jobs most journeyman electricians can’t do. You can take pride in the knowledge that you’ve earned a special job designation and all its benefits through your hard work and gained knowledge.

Increased Income

While earning more on the job isn’t the only reason for becoming a master electrician, the typical raise in pay can help almost any budget. On average, journeyman electricians earn a little over $22 an hour as of July 2015. Master electricians, on the other hand, average almost $26 an hour. Masters have more responsibilities and have a more varied work schedule, but the raise in pay can be well worth the time and effort it takes to get the license. Depending on your company and the average pay in your part of the country, your pay can be much higher if your specialties are in high demand.

Professional Respect

On most job sites, a person who knows more techniques and can get the job done better is respected by his fellow crew members, especially if he shares this knowledge. Just knowing how hard it is to pass the master electrician’s tests will automatically cause most journeyman to give you some added props on the work site. When it comes to clients or prospective clients, your expert rating will automatically place you higher in their eyes than the average workman. They’ll respect your opinion about the proposed project and will be more willing to go along with suggestions you might make for getting the job done more easily or with a better result.

Job Variety

Apprentice and journeyman electricians do a large variety of jobs, so the job isn’t as dull and boring as some. Eventually, though, you may want to take your work day to the next level. In addition to the basic electrician job duties, a master supervises all the other crew members on the job. He orders supplies, coordinates teams to make sure all parts of the job finish at the same time and ensures that everything and everyone on the job site operates as planned. After you become a master you’ll also acquire the following responsibilities:

• Pulling permits for the job site
• Purchasing and providing supplies, equipment and other inventory for the crew
• Working with the site manager
• Conduct business and consultations with the homeowner or project owner
• Ensure that all safety guidelines are met on the job site

You’ll have less hands-on electrical work to do and more management jobs, but the new challenges will add an additional spice to your work day.

Job Prospects

You may be perfectly happy with your current employment, but that may change in the future. Company ownerships change hands, families relocate on a regular basis and the economy rises and falls. Becoming a master electrician is one way of making your job prospects much more secure in the future. Despite the extra cost of hiring a master, companies are almost always more willing to hire someone with more knowledge and experience than less experienced workers, especially in positions of high responsibility. It just makes good business sense.

If you get tired of working for someone else and decide to create your own company, it’s easier to  go out on your own if you’re the expert. Every new company needs to have a master electrician to supervise projects from start to finish. As a master, you’ll not only save money you might otherwise have to spend, your increased knowledge of the trade will enhance your crew management skills.

End of article

If you are interested in obtaining your C10 Electrical CSLB Contractors License, please let me know. I’d be happy to answer any questions you may have.

EMPLOYMENT LAW FOR CONTRACTORS

The Green Law Group Presents:
EMPLOYMENT LAW
FOR CONTRACTORS

AUGUST 25, 2015
TOPICS:
  • The difference between exempt and non-exempt employees
  • When can project managers and superintendents be exempt from overtime
  • When can you use different wage rates for travel time
  • When do you have to reimburse employees for mileage to commute to project sites
  • When do contractors have to pay for commute time to and between projects
  • The insurance contractors need for their employees’ vehicles
  • Rules that restrict access to employee driver’s license records
  • Minimum wage requirements for piece work
  • Liability for undocumented workers
  • How cell phones, emailing and texting after hours can result in overtime claims
  • What happens when your supervisors don’t know the rules
  • Severance Agreements
  • Employment Arbitration Agreements
  • EPL Insuranc

 

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Contact your State Representative

If you are having problems with the Contractors State License Board (CSLB), you should contact your State Representative.

Contact your State RepresentativeBelow is a letter I received from my Rep back in 2013 in response to a complaint I filed. As you’ll see, they contacted the CSLB on my behalf.

My take-away from this letter is that they just repeated what the CSLB told the Rep’s contact person. And even though this was not the outcome I was hoping for, they still told the CSLB (in essence) that people are filing formal complaints. I should have pressed the issue more with the Rep’s office, but at the time the CSLB app process in place was new and there was no history to bolster my complaint.

It’s clear now that they are profiling applicants based on the classification they are applying for. I have learned in recent months that the CSLB is no longer using the term “critical classifications.” I believe they dropped the term because they know that it equates to an underground regulation.

Some people wonder that if by filing a complaint with your Rep, the CSLB will retaliate by denying your application. It would be illegal for the CSLB to do that, and they tend to fear the Legislature, so I think you should feel comfortable filing such a complaint.

Bottom line, if you’re having trouble dealing with, getting answers from, being harassed by the CSLB, you should contact your State Representative. Click here to find out who your Rep is.

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Starting a Construction Business

Starting a construction businessStarting a construction business isn’t easy by any means. There is a lot of planning and steps to take. I’m going to attempt to break it down to the basics.

First, what business entity to choose. If you choose a corporation or LLC you’ll want to file your articles of incorporation with the Secretary of State (SOS). This is a service I offer, but if you prefer to use an online company click here.

Next you’ll want to obtain a Federal Employer ID number. You can get this number from the IRS using their online system. It will provide you with the FEIN in just minutes.

You will need to apply for a business license in your city or county. Here is a page of helpful information regarding business licenses.

If you are going to use a fictitious business name (FBN) you’ll need to apply for it in your city or county. Generally, the same government office that issues business licenses will also handle the FBN filing.

Opening a business bank account. You’ll need a copy of the filed FBN statement with you when you open the bank account. Unless you are using your personal name as your business name, the bank will not open a business account for you unless you have the filed FBN statement.

After the SOS has issued your corporate number, you can then apply for your contractor’s license. I offer a full range of license application services. Whether you need me to complete all of your documents for you, or just a review of the documents you’ve prepared, I’ll be happy to assist you.

If you are applying for a sole owner (sole proprietor) license, you can apply for your contractor’s license at any time. If you use your personal name for the business name on your contractor’s license, you will not need to file a FBN with your city our county.

Here is something that many new corporations miss… the SOS will notify the Franchise Tax Board (FTB) when the corporate number is issued and you will need to file a tax return, even if no business was conducted or if the contractor’s license was never issued. I have heard from people who formed an S corporation, received their contractor’s license number, but never conducted any business. They did not file a return with the FTB and they failed to pay the corporate taxes when due. When they tried to renew their license they discovered that the corporation was suspended at the SOS by the FTB for overdue taxes and penalties. I highly recommend finding a reputable CPA to help you.

To break it down….

  • Choose your business entity type
  • Submit your articles of incorporation with the SOS (if you’re forming a corp)
  • Apply for an FEIN with the IRS
  • Open a business bank account
  • Apply for your contractor’s license

As I said at the top, this is a basic list of what you need to do to start a construction business. It’s obviously more involved than this, I just wanted to give you the basics to get you started.

As always, I’m available to answer any questions that you may have. Everybody’s situation is different and I’d be happy to help you navigate through this process. Feel free to email your questions to me at ContractorLicenseService at gmail.com.