Contractor RMOs for Hire

The CSLB released their Winter 2015-16 newsletter last week. One article discussed contractor RMOs for hire.CSLB Gestapo Tactics

Section 7068.1 of the Business and Professions code states: …”responsible for exercising that direct supervision and control of his or her employer’s or principal’s construction operations to secure compliance with this chapter and the rules and regulations of the board.” And Code 823(b) states: “For purposes of Section 7068.1 of the Code, “direct supervision and control” includes any one or any combination of the following activities: supervising construction, managing construction activities by making technical and administrative decisions, checking jobs for proper workmanship, or direct supervision on construction job sites.”

823 states “any one or any combination,” so if you are using an RMO that is not directly related to your business you need to ensure that he/she is following these guidelines.

I talk to people almost daily who need to use an RMO who is not directly related to their business. I tell them that the RMO must be involved in the construction activities that will be conducted under the license and the same rules and responsibilities apply as they do to the license they currently hold.

What I think is at issue here is the broad definition of “direct supervision and control.” Does the RMO need to be on the job site to manage or make technical and admin decisions? Not according to the law. Remember, it states “any one or any combination” is allowed, that suggests “direct supervision on construction job sites” does not have to be a mandatory choice.

With this ambiguity I’m left wondering what the CSLB gestapo task force is finding during their “investigations”, what are they citing these contractors with, and what are the criminal cases truly about?

I’m sure any attorney worth his hourly fee would be able to punch holes in any CSLB case that involved 7068.1 and 823. So if you are using an RMO or you are an RMO and you do not have a direct relationship with the business, I suggest you become as active as possible with the work being done. Log all phone calls, keep all emails, review contracts and sign them if possible, review photographs, and yes… even drop by the job site if you can (even though the law cited by the CSLB does not require it).

Last comment…. if this is such a big problem that the CSLB had to create a “task force”, why don’t they just amend or remove B&P Code 7068.1? Get rid of the 20% rule altogether? Or is it easier to create an unregulated task force, pry into the business activities of licensee’s, write citations and criminal cases, and collect 100’s of thousands of dollars? Well…. they even say it themselves… “yielded big dividends”!

Full CSLB article below

RMOs-for-Hire Better Know What They’re Getting Into

CSLB has zeroed in on licensees who rent their services as Responsible Managing Officers (RMOs) for companies over which they have little or no control. Due to the work of a special CSLB task force that targets suspected RMO abuses, those who act as little more than paid license qualifier for companies are being identified and disciplined for violating state contractor law.

Contractors who serve as qualifiers for a company’s construction operations must exercise direct control and supervision, and, by law, maintain at least a 20 percent ownership stake in each firm for which the person acts as a qualifier. Business and Professions Code (BPC) section 7068.1 authorizes CSLB to discipline the licensed entity when the qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a qualifier on the license can be charged with a misdemeanor and be sentenced to serve up to six months in jail, and required to pay a fine of up to $5,000, or both.

CSLB’s effort to uncover straw men RMOs has yielded big dividends. There have been a total of 304 complaints filed against those suspected of misusing their qualifier status (many still under investigation), 31 accusations filed to revoke or suspend a license, 12 citations issued for violations of contractor law, 11 criminal cases filed by local district attorney’s offices, and $215,000 in restitution ordered for wronged consumers.

CSLB has strong words of caution for those who would enter these arrangements: If you act as an RMO and do not have active and financial involvement in the construction and business operations, you risk CSLB administrative penalties against your license(s) as well as criminal prosecution, regardless of whether you’re aware of substandard work being performed by unqualified individuals.

The task force also is watching for exam waiver requests from applicants suspected of only seeking to rent their name for a fee. CSLB also will seek to revoke qualifier status previously granted to anyone whose actions demonstrate they do not have an ownership stake or are not active decision makers listed on a license.

A review of BPC section 7065 will provide further explanation of examination waiver laws.

End of article

Very last comment…. do I think the CSLB should be taking action against the extremely small percentage of contractor RMOs for hire? Yes.  Should they create an unregulated task force with no oversight to invade the businesses of California contractors? …. Not just no, but hell no!

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What You Need to Know About Enforcement Actions by the Contractors State License Board

What You Need to Know About Enforcement Actions by the Contractors State License Board

I questioned whether to even write this post.

Because, of course, YOU would never find yourself hightailing it out of town  with the California Contractor’s State License Board (“CSLB”) sniffing down your tail pipes.

Then again, mistaken identities occur all the time. So, here’s what you need to know if the CSLB mistakes you for one of “those” contractors.

What violations are subject to CSLB enforcement actions?

The CSLB can take enforcement actions based on any one of numerous violations set forth under the California Business and Professions Code (“B&P Code”), including:

  1. B&P Code §7107: Abandonment of a construction project or operation without legal excuse.
  2. B&P Code §7108: Diversion or misapplication of funds or property received for prosecution or completion of a construction project or operation.
  3. B&P Code §7108.5: Failure to pay a subcontractor not later than 7 days after receipt of each progress payment, unless otherwise agreed to in writing or in the absence of a good faith dispute over the amount due.
  4. B&P Code §7108.6: Failure to pay transportation charged submitted by a dump truck carrier, unless otherwise agreed to in writing or in the absence of a good faith dispute over the charges claimed.
  5. B&P Code §7109: Willful departure from or disregard of accepted trade standards or plans and specifications.
  6. B&P Code §7109.5: Violation of a safety provision under the California Labor Code (Labor Code section 6300 et seq.) resulting in death or serious injury to an employee.
  7.  B&P Code §7110: Willful or deliberate disregard of building, safety, labor, workers compensation, unemployment, the Subletting and Subcontracting Fair Practices Act, or violation of the California Health and Safety Code or California Water Code relating to digging, boring, or drilling of water wells.
  8. B&P Code §7110.1: Requiring a release from an unpaid laborer in violation of the California Labor Code (Labor Code section 206.5).
  9. B&P Code §7110.5: Being found by the California Labor Commissioner to have willful or deliberately violated the Labor Code.
  10. B&P Code §7111: Failure to make and keep records showing all contracts, documents, records, receipts and disbursements for a period of 5 years after completion of a construction project or operation.
  11. B&P Code §7111.1: Failure or refusal to respond to a written request by the CSLB to cooperate in the investigation of a complaint against the licensee.
  12. B&P Code §§7112 and 7112.1: Omitting or misrepresenting a material fact when obtaining or renewing a license or adding a classification to an existing license.
  13. B&P Code §7113: Failing to complete a construction project or operation for the price stated in the contract or in any modification to the contract.
  14. B&P Code §7113.5: Avoiding or settling of an obligation for less than the full amount through: (a) composition, arrangement, or reorganization with creditors under state law; (b) composition, arrangement, or reorganization with creditors under any agreement or understanding; (c) receivership; (d) assignment for the benefit of creditors; (e) trusteeship; or (f) dissolution, unless discharged or settled in bankruptcy under federal law.
  15. B&P Code §7114: Aiding or abetting an unlicensed person with an intent to evade the License Law.
  16. B&P Code §7114.1: Signing a falsified certificate of experience or certifying false or misleading experience.
  17. B&P Code §7114.2: Displaying a canceled, revoked, suspended, or fraudulently altered license, using a fictitious license or document simulating a license, lending a license to another person, or knowingly permitting the unlawful use of a license.
  18. B&P Code §7115: Failure to comply with the License Law or engaging in collusion under California Public Contracts Code section 7106.
  19. B&P Code §7116: Willfully or fraudulently injuring another.
  20. B&P Code §7116.5: Engaging in conduct that subverts or attempts to subvert an investigation by the CSLB.
  21. B&P Code §7117: Acting in the capacity of a contractor under a license that is not his or hers or with personnel not identified under the license.
  22. B&P Code §7117.5: Acting in the capacity of a contractor under an inactive, suspended, or expired license.
  23. B&P Code §7117.6: Acting in the capacity of a contractor in a classification other than a classification currently held.
  24. B&P Code §7118: Entering into a contract with an unlicensed contractor.
  25. B&P Code §7118.4: Failure, by a contractor who has made an inspection to determine the presence of asbestos, to disclose orally and in writing that there is an ownership or financial relationship with a contractor performing corrective work.
  26. B&P Code §7118.5: Knowingly or negligently entering into a contract with a person who is not certified to engage in asbestos-related work.
  27. B&P Code §7118.6: Knowingly or negligently entering into a contract with a person who is not certified to engage in hazardous waste remediation.
  28. B&P Code §7119: Willful failure or refusal to to diligently prosecute a construction project or operation without legal excuse.
  29. B&P Code §7120: Willful or deliberate failure to pay money when due for materials or services rendered or false denial of any amount due or the validity of a claim with intent to secure a discount or delay.
  30. B&P Code §7121: Employing or associating as an officer, director, partner, manager, qualifier or one of the personnel of record of a licensee, a person whose license was previously denied, suspended, or revoked, or who had knowledge of or participate in acts of an organization which had its license previously denied, suspended, or revoked.
  31. B&P Code §7121.5: Employing or associating as an officer, director, partner, manager, or qualifier, a qualifier of an organization which has had its license revoked or suspended, regardless of whether he or she had knowledge of or participated in any acts of the  organization which led to its license being revoked or suspended.
  32. B&P Code §7123: Being convicted of a crime substantially related to the qualifications, functions and duties of a contractor.
  33. B&P Code §7123.5: Overpricing work following an emergency or major disaster.

What happens when a complaint is filed or enforcement action initiated against my license?

The CSLB may initiate enforcement action on its own. However, more typically, a complaint is filed against a license. The License Law states that “any person” may file a complaint against a license. Usually, however, a complaint is filed by an owner or another contractor, subcontractor, material supplier or employee.

Complaints based on patent defects must be filed within 4 years after the act or omission. Complaints based on latent defects must be filed within 10 years after the act or omission. And complaints based on misrepresentations of material facts, or based on criminal conduct, must be filed within 2 years of discovery.

When a complaint is filed it is processed at the CSLB Intake and Mediation Center nearest the location where the alleged violation occurred. If the complaint is found to fall within the CSLB’s jurisdiction the CSLB will send confirmation of receipt of the complaint to the complainant and a notice to the contractor.

  1. Notice of Possible Violation: The notice to the contractor will usually request information as to whether a settlement has been reached, whether a settlement was offered but not accepted, whether the contractor contends that no violation exists, or if there is further information the contractor would like to share with the CSLB.
  2. Investigation: If a complaint is not resolved, a CSLB consumer services representative (CSR) will contact the complainant and the contractor to request additional information and documentation and attempt to mediate the dispute. If the CSR determines that further investigation is necessary, he or she can assign the case to an enforcement representative (ER) who will conduct an investigation by requesting further information and documents, and conducting interviews, to determine whether there is clear and convincing evidence of a violation of the License Law.
  3. CSLB-Sponsored Arbitration: In certain cases, the CSLB can refer the parties to the CSLB-sponsored arbitration program. The CSLB-sponsored arbitration program is only available if: (a) the dispute involves damages greater than $12,500 but less than $50,000; (b) the contractor has a license in good standing; (c) the contractor does not have a history of repeated or similar violations; (d)  the contractor does not currently have a disciplinary action pending against him or her; and (e) the parties have not previously agreed to arbitrate or are willing to waive a contractual agreement to arbitrate. The CSLB-sponsored arbitration program is voluntary, unless the damages are equal to or below $12,500, in which case arbitration can be mandated. If the  parties participate in the CSLB-sponsored arbitration the arbitrator’s decision is binding.
  4. CSLB Enforcement Action: Once an investigation is concluded the CSLB may take one or more of the following actions: (a) issue a warning letter; (b) issue a citation; (c) file an accusation; or (d) close the complaint because the parties’  settled, for lack of evidence, or because it found no violation. In rare instances, the CSLB may seek injunctive relief with the courts or refer the matter to a local prosecutor for the filing of criminal charges.

What is a warning letter?

If a violation is found but the contractor’s actions are not egregious and the contractor’s history does not reflect a patter of violations the CSLB may just send a warning letter to the contractor. A warning letter remains a matter of record and could support more serious action against a contractor if further violations occur.

What is a citation?

If a contractor is found to have violated the License Law, the CSLB may issue a citation imposing a civil penalty payable to the CSLB as well as an order of restitution requiring the contractor to either correct deficiencies and/or pay for the damages of the complainant. Civil penalties on a single construction project, no matter the number of violations, cannot exceed $5,000. However, if a contractor is found to have contracted with an unlicensed contractor or have aided and abetted an unlicensed contractor a civil penalty of up to $15,000 may be assessed.

A contractor may appeal a citation by giving notice to the CSLB within 15 days of service of the citation by the CSLB. If a contractor appeals the citation, a hearing is held before the Registrar of Contractors who may revoke, modify, or affirm a citation. A mandatory settlement conference before the hearing may also be conducted.

If a contractor does not appeal or fails to appeal a citation within 15 days of service of the citation by the CSLB, the citation becomes final. If a contractor fails to comply with a citation it will result in the automatic suspension of his or her license 30 days after noncompliance with the terms of the citation. A contractor may contest the determination of noncompliance by giving notice to the CSLB within 15 days of service of a notice of noncompliance by the CSLB. If a contractor continues to fail to comply with a citation it will result in the automatic revocation of his or her license 90 days after the date of automatic suspension.

What is an accusation?

The most serious violations are subject to the filing of an accusation. In an accusation, the CSLB seeks to suspend or revoke a contractor’s license, and begins with the CSLB filing an accusation which is similar to a complaint filed in superior court and includes an allegation of claims. A contractor has 15 days from service of an accusation by the CSLB to file a notice of defense.

The Administrative Procedures Act (Government Code sections 11500 et seq.) govern accusations, including limited discovery of names and addresses of witnesses, statements taken, investigative reports, and documents sought to be admitted as evidence. A mandatory settlement conference before the hearing may be conducted.

At the hearing before the Administrative Law Judge (“ALJ”) the burden is on the CSLB to prove by clear and convincing evidence that a contractor’s license should be suspended or revoked. The rules of evidence, however, are typically more relaxed. Following the hearing, the ALJ will issue a proposed decision.

The CSLB may adopt the proposed decision in whole or in part or may enter its own ruling. The CSLB can also request that additional evidence be heard. The decision of the ALJ becomes a final decision 30 days after service of proposed decision unless reconsideration is requested.

A contractor who is unhappy with a decision can seek judicial relief by filing a petition for peremptory writ of administrative mandamus in the superior court. The peremptory writ provisions of California Code of Civil Procedure section 1094.5 govern writs and require the superior court to conduct an independent review of the record. The parties may also appeal the decision of the superior court to the court of appeal.

Contractors who lose an accusation may be required to pay the CSLB’s investigative and enforcement costs which can be in the tens of thousands of dollars. A contractor whose license is suspended may be reinstated upon proof of the contractor’s compliance with the conditions of suspension or, in the absence of such conditions, the discretion of the CSLB. A contractor whose license is revoked may not reinstate their license for a minimum of one year or up to a maximum of five years. A contractor will also be required to file a disciplinary bond.

How does the CSLB address complaints against unlicensed contractors?

Unlicensed contractors, as opposed to licensed contractors, don’t have a license which can be suspended or revoked. When the CSLB receives a complaint against an unlicensed contractor the CSLB may issue a citation including an order of abatement to cease and desist and a civil penalty up to $15,000, file a criminal action with the local district attorney’s office, or initiate injunction proceedings in the superior court.

Unlicensed contractors have 15 days from service of an administrative citation by the CSLB to appeal a citation. If an unlicensed contractor appeals a citation, a hearing is held before the Registrar of Contractors who may revoke, modify, or affirm a citation. A mandatory settlement conference before the hearing may also be conducted.

view post: What You Need to Know About Enforcement Actions by the Contractors State License Board

 

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CSLB Summer Newsletter Part II

CSLB Summer Newsletter Part II, the analysis continues.

Direct Supervision and ControlThe CSLB summer newsletter contained an article about RMO abuses. While the law does allow a qualifier to be an RMO on up to three corporate licenses at the same time, the qualifier needs to ensure that they are involved in every project done under those licenses.

Here’s the article:

After a sharp rise in consumer complaints against license qualifiers who have been granted a test waiver, the Enforcement division has established a task force to investigate cases where Responsible Managing Officers (RMOs) are suspected of acting as paid figureheads for a company, but exercise little to no control over its operations.

Contractors who serve as qualifiers for a company’s construction operations must exercise direct control and supervision. If you are an RMO and do not have active involvement in the construction and business operations, you risk CSLB administrative penalties against your license(s) as well as criminal prosecution, regardless of whether you’re aware of substandard work being performed by unqualified individuals.

In a sample group investigated earlier this year, consumer complaints were filed against 40 percent of the RMOs who qualify licenses. A similar review in October 2012 identified complaints against 23 percent of the sample RMO group. By comparison, only about 3 percent of CSLB’s almost 300,000 licensed contractors are the subject of a consumer complaint each year.

The task force will be watching for exam waiver requests from applicants suspected of only seeking to rent their name for a fee. CSLB also will seek to revoke qualifier status previously granted to anyone whose actions demonstrate they do not have an ownership stake or are not active decision makers listed on a license.

A new law that took effect in January 2014, Business and Professions Code section 7068.1, now authorizes CSLB to discipline a qualifier, and the licensed entity they are qualifying, when the qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a qualifier on the license can be charged with a misdemeanor and be sentenced to serve up to six months in jail, and required to pay a fine from $3,000-$5,000, or both, if convicted.

A review of Business and Professions Code section 7065 will provide further explanation of examination waiver laws.

End of Article

Here are the interesting parts of this article.

1) What is the CSLB’s definition of “direct” control and supervision?

823. Definitions: Bona Fide Employee; Direct Supervision and Control:

(b) For purposes of Section 7068.1 of the Code, “direct supervision and control” includes any one or any combination of the following activities: supervising construction, managing construction activities by making technical and administrative decisions, checking jobs for proper workmanship, or direct supervision on construction job sites.

According to the law as written, you do not have to perform direct supervision on-site. The law states “any one or any combination of…” You could receive mailed or emailed updates, photographs, video conference. With today’s technology, you could review workmanship via skype, for example. I’m sure an attorney or judge would say… “The intent of the law is…” But if the CSLB is going to pursue qualifiers based on direct supervision and control, they better not penalize RMO’s for not setting foot on the job site. Again, the law states… “any one or combination of…”

2) Complaints filed against 40 percent of the RMOs who qualify licenses? Where did they get this stat from? And were those RMOs active owners in the business and how many of them qualify more than one license. They throw out a stat like that without detailing how many of those RMOs qualify more than one license.

Here is the most interesting part of this article.

“The task force will be watching for exam waiver requests from applicants suspected of only seeking to rent their name for a fee.”

“Suspected” of only seeking to rent their name… What guidelines will the CSLB be using to determine who is “suspected”? Are they suggesting that they will investigate, harass, go after any and all RMOs they feel are suspects? How would like to be running your above board business, following all applicable laws, only to receive a letter, phone call, or in person visit from a CSLB investigator that is arbitrarily throwing out an accusation that you may be in violation of 7068.1? If and when that happens, you’ll have to spend time and money to provide the CSLB with evidence that you are following the law. To me… it reeks of government overstepping. In other words… par for the CSLB course.

Are there people out their “renting” their name to qualify a license? Without a doubt! Should this practice be stopped? Without a doubt! But should a State agency have the power to put an entire class of people in the category of “suspect”? I think not.

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Contractors State License Board Exams

Email exchange I had with Betsy Figueira on 3/28/2014 regarding the Contractors State License Board exams.

Basically, I wanted to know how and why the CSLB is allowing applicants to take the CSLB exams when they are sending the applications to the investigation unit. The conversation went as follows:

Update at the bottom. 4/4/14

License Guru: Can you provide me with the rule, regulation, or law that gives the CSLB the authority to allow an applicant to take the exams, but still send their application to enforcement for investigation?

Ms. Figueira: Hello Phil,

California Code of Regulations (CCR) Section 825 (a) requires the qualifier to have 4 years of journey-level work experience within the last 10 years in the relevant classification.

Business and Professions Code (BPC) Section 7065, CCR Section 825 (e), and CCR Section 840 require the qualifier is to take the examination.

CCR Section 824 requires a comprehensive field audit of a minimum of 3% of the applications.

There is nothing in the law that specifically dictates the order in which the exam must be taken and the experience must be verified.  As a service to the applicant, CSLB allows the consecutive processing of the examination and the experience investigation in order to save time, as opposed to making the applicant wait until his/her experience has been verified before taking the examination, which can take months.

Passed examinations remain valid for 5 years after the exam date, as provided in BPC Section 7065 (d).  Therefore, even if an applicant’s experience is not verified under a particular application, the applicant may be able to make use of that passed exam to qualify for licensure on a subsequent application when he/she is able to sufficiently document his/her work experience.

Thanks,

Betsy Figueira
CSLB, Licensing Division Manager
916-255-3369

License Guru: Thank you for the reply.

So I understand this correctly… since the law does not “specifically” dictate the order in which the exam must be taken, a CSLB staff member has decided to allow applicants to take the exams, even though their application hasn’t been accepted and/or approved. I know the CSLB has different definitions for “accepted” and “approved” and uses either word when it best fits the situation.

The CSLB website states the following:
http://www.cslb.ca.gov/applicants/ContractorsLicense/ExamApplication/ApplicationAccepted.asp

What can I expect when my exam application has been accepted?

This step will outline some of the procedures you can expect when your exam application is accepted.

  • You will receive a Fingerprinting Live Scan packet (see step 6 for further information.)
  • You will receive a Notice to Appear for Examination. You should receive your examination notice at least three weeks prior to the examination date.

The above statement on the website is misleading and does not fall in line with your statement.

I’ve talked to many applicants who are confused as to why they’re being allowed to take the exams when their application is being sent to investigation. At the very least, the CSLB is sending mixed messages.

From what I have been told, most applicants find it more stressful to take the exams not knowing if their application is going to be processed/accepted/approved etc., or not. So from my experience, you are not doing them any favors.

Then there is this page on the website. Note the last line of the third bullet point.

http://www.cslb.ca.gov/Applicants/ContractorsLicense/NoExamApplication/ApplyingForLicense.asp

Under what circumstances am I not required to take the examination?

You are not required to take the examination if the qualifying individual meets one of the following requirements:

  • You are currently a qualifier on a license in good standing in the same classification(s) for which you are applying;
  • You have been a qualifier within the past five years in the same classification(s) for which you are applying;
  • Within the last five years, you have passed both the Law and Business Examination and the trade examination in the same classification for which you are applying, and the license for which you took the examinations was not denied due to lack of work experience.

I have research the B&P Code and the CCR and can not find any rule, regulation, or law that gives the CSLB the authority to have an applicant re-take exams that he/she has passed within the prior five years because of a prior denied application. This statement on the website also differs from your statement regarding 7065.

Applicants are being put through the wringer when it comes to providing paper documentation when the law clearly states that the “registrar shall investigate, classify, and qualify applicants for contractors’ licenses by written examination.” 7065 (a)

Regarding Section 824. It does not specifically dictate the creation of a list of “critical classifications.” Therefore, those applying for one of the “critical classifications” should not be considered part of the 3% minimum. Those applicants are being required to provide additional documentation based solely on the classification they are applying for. Therefore, Section 824 does not apply.

At the very least, the CSLB should be putting out a consistent message that follows the law as written, not as interpreted by CSLB staff.

Thank you again.

End

I haven’t received a response to my reply, but it was yesterday (Friday) so I may or may not hear back from her until next week… if at all. It seems that whenever I ask for information regarding their licensing processes, they always give me Section 824, 825, 840 and 7065. None of which actually give them the authority to do what their doing if they followed the letter of the law.

The bottom line is… the Contractors State License Board Exam unit does whatever they want and they always seem to manipulate the law to fit their needs or to justify their whims.

Update: 4/4/14

Below is a portion of a reject letter that was sent in March. You will notice the last paragraph states the following:

Inline image 1

If this is true, then why are these applicants being sent to investigation? The fact that they are being sent to the exams suggests that licensing has verified the minimum experience required.

Continue reading the discussion at Contractors State License Board Exams Part 2.

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CSLB Waiver Application

  • Q. Under what law or regulation does the CSLB have the authority to state the last line of the third bullet point?

  • A. None!

Under what circumstances am I not required to take the examination?

You are not required to take the examination if the qualifying individual meets one of the following requirements:

  • You are currently a qualifier on a license in good standing in the same classification(s) for which you are applying;
  • You have been a qualifier within the past five years in the same classification(s) for which you are applying;
  • Within the last five years, you have passed both the Law and Business Examination and the trade examination in the same classification for which you are applying, and the license for which you took the examinations was not denied due to lack of work experience.

CSLB Applying for a license waiver

The webpage above is located here: http://www.cslb.ca.gov/Applicants/ContractorsLicense/NoExamApplication/ApplyingForLicense.asp

What they are saying is that if you pass your exams and the application that you submitted to take those exams was denied due to lack of work experience, those passing exam scores then become invalid.

Exam waivers fall under Business and Professions Code 7065. There is nothing in that regulation that states “and the license for which you took the examinations was not denied due to lack of work experience.” So for the CSLB to put this on their website is overstepping at the least, a violation of law at the most.

  • Q. So why have they been posting applications and scheduling them for the exams, then referring them to enforcement (AIU) for investigation of experience?
  • A. So that they can come back later and tell you that your passing test scores are no longer valid when you reapply for your license.

Once again, it shows the CSLB has no regard for the rule of law. They are akin to the POTUS, as he said in the Rose Garden the other day… “I do what I want!”

It’s time for the Contractors State License Board to wake up and realize that they don’t get to make arbitrary laws, rules, and regulations.

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CSLB Application Denials and the Appeals Process

Let’s take a minute to discuss CSLB Application Denials and the Appeals Process.

application denialIt’s a boring subject I know, but it’s good information to have if you find yourself stuck in the AIU vortex.

If your application is denied by the Application Investigation Unit, Section 485 kicks in.

§ 485. Procedure upon denial

Upon denial of an application for a license under this chapter or Section 496, the board shall do either of the following:

  • (a) File and serve a statement of issues in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
  • (b) Notify the applicant that the application is denied, stating (1) the reason for the denial, and (2) that the applicant has the right to a hearing under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code if written request for hearing is made within 60 days after service of the notice of denial. Unless written request for hearing is made within the 60-day period, the applicant’s right to a hearing is deemed waived. Service of the notice of denial may be made in the manner authorized for service of summons in civil actions, or by registered mail addressed to the applicant at the latest address filed by the applicant in writing with the board in his or her application or otherwise. Service by mail is complete on the date of mailing.

Added Stats 1972 ch 903 § 1. Amended Stats 1997 ch 758 §

The key here is that 60 day deadline to file your appeal request. I would suggest filing your appeal as soon as possible to get the appeal process started.

From here Section 487 applies and it outlines the Hearing process.

§ 487. Hearing; Time

If a hearing is requested by the applicant, the board shall conduct such hearing within 90 days from the date the hearing is requested unless the applicant shall request or agree in writing to a postponement or continuance of the hearing. Notwithstanding the above, the Office of Administrative Hearings may order, or on a showing of good cause, grant a request for, up to 45 additional days within which to conduct a hearing, except in cases involving alleged examination or licensing fraud, in which cases the period may be up to 180 days. In no case shall more than two such orders be made or requests be granted.

Added Stats 1972 ch 903 § 1. Amended Stats 1974 ch 1321 § 10; Stats 1986 ch 220 § 1, effective June 30, 1986.

The important part in this section is that the hearing shall be conducted within 90 days of the hearing being requested. Unless you, the applicant, request or agree to a continuance. I wouldn’t agree to a continuance because I wouldn’t want to give the board the ability to delay the process any further. If the OAH grants a request for extension, you’re stuck with it. The CSLB likes to say that the process can take 4-6 months, but I think this is a scare tactic. Section 487 suggests that a hearing could take place in as little as 3 months.

After a hearing request is submitted, Section 488 comes in to play.

§ 488. Hearing request

Except as otherwise provided by law, following a hearing requested by an applicant pursuant to subdivision (b) of Section 485, the board may take any of the following actions:

  • (a) Grant the license effective upon completion of all licensing requirements by the applicant.
  • (b) Grant the license effective upon completion of all licensing requirements by the applicant, immediately revoke the license, stay the revocation, and impose probationary conditions on the license, which may include suspension.
  • (c) Deny the license.
  • (d) Take other action in relation to denying or granting the license as the board in its discretion may deem proper.

Added Stats 2000 ch 568 § 2 (AB 2888).

This one is interesting because of item (c). This suggests that the CSLB could deny the license… again. What’s curious is that it was a denial that led you down the appeal/hearing path in the first place.

So there you have it, some interesting facts about CSLB application denials and the appeals process.

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Contractors State License Board Beefs Up Public Works Unit

Contractors State License Board Beefs Up Public Works Unit

By Garret Murai, December 30, 2013

The California Contractors State License Board (“CSLB”) has announced that it’s beefing up its Public Works Unit to help ensure that contractors bidding and performing work on public works projects are complying with wage and worker’s compensation laws.

The CSLB’s worker-focused expansion follows the California Labor Commissioner’s record-breaking prevailing wage enforcement actions this year.

And if recently enacted legislation is any indication, labor law will continue to be a hot topic this coming year.

[Read more…]

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New Contractors License Law

A new contractors license law goes into effect for 2014.

With the new application experience verification process in full swing, many people who contact me are asking about using someone else to qualify their license.new contractors license law

As I’ve stated in other posts, the law does allow this. But, with the new law listed below, you better be fully involved in the other licenses activities or the CSLB can and will come after you.

Agencies like The RMO Agency have been connecting companies and qualifiers for years. The problem is, they have no oversight to ensure that the people they are connecting are actually following the current rules/laws/regulations that pertain to qualifiers of licenses. I’m not suggesting they should have oversight. It is the qualifiers responsibility to ensure they are involved in the projects done by that other license, after all. But companies like this will put together a qualifier from northern cal with a company in southern cal. This puts the qualifier and the company in a perilous position. And now, with this new law coming into effect, the CSLB will have the power to take action against both parties.

Below is the section outlining the new law in the CSLB newsletter.

Qualifiers – CSLB is now able to discipline a qualifier and the licensed entity they are qualifying when the qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a qualifier on the license can be charged with a misdemeanor, and be sentenced to serve up to six months in jail, and pay a fine from $3,000-$5,000, or both, if convicted. SB 262 amended §7068.1 of the B&P Code.

My advice to anyone who may be thinking about qualifying another license… the new contractors license law can and will have a big impact on you, the license you qualify, and your own personal or corporate license. So I suggest you do what you can to be involved as much as possible.

via CLC Newsletter Winter 2013.

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2014 California Construction Law Update

2014 California Construction Law Update

by Garret Murai

2014 California Construction Law Update

Approximately 2,000 bills were introduced in the California State Legislature during the 2013-2014 legislative session. Of these, 896 bills made it to Governor Browns desk and 800 were signed into law.Looking back, 2013 could be called the year of the labor unions. Strong Democratic majorities controlled both the Assembly and Senate. Democratic Governor Brown, enjoying record high approval ratings, surpassed Republican Earl Warren as the longest-serving governor in Californias history. And, 2014 being a primary election year, incumbents are under pressure to show their supporters what theyve done for them lately.The stars aligned, labor unions saw the passage of legislation restricting the ability of charter cities to avoid prevailing wage laws, new laws expanding the authority of the California Labor Commissioner, and tighter…

Read the entire article here: via [New post] 2014 California Construction Law Update.

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CSLB News Release

A CSLB News Release was issued today.

It’s good to see the Contractors State License Board (CSLB) getting out and doing these stings. There were several of them that were bidding as B-General Building Contractors. I wonder if any of them have looked into, or attempted to get their license but couldn’t because of the new application processing procedures. And this could be a sign that the underground economy is expanding.CSLB News Release

It Was Raining Illegal Contractors at Hayward CSLB Sting OperationNine suspects cited, given court dates for contracting without license, illegal advertising.

SACRAMENTO

– A stormy day didn’t deter unlicensed contractors from converging on a Hayward home to bid for construction work during a Contractors State License Board CSLB undercover sting operation on November 20, 2013, carried out with the assistance of the Alameda County District Attorney’s Office. Nine suspects were issued Notices to Appear NTAs in Superior Court on charges of contracting without a license and false advertising.

Investigators from CSLB’s Statewide Investigative Fraud Team SWIFT posed as homeowners at the single-family home and fielded a multitude of offers to do work that included electrical, plumbing, fencing and flooring projects. It wasn’t difficult for CSLB investigators to identify those who might be illegally contracting in the area simply by checking online bulletin boards such as craigslist, business cards or flyers posted at hardware stores, and local publications, including Penny Saver.

Nine of the 10 people who showed up to give a bidwere cited. All nine face misdemeanor charges for both contracting without a license Business and Professions Code section 7028, which carries a penalty of up to six months in jail and/or a fine of up to $5,000 if convicted, and illegal advertising Business and Professions Code section 7027.1. State law requires contractors to place their license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. The penalty is a fine of $700 to $1,000.

The lone person who did not bid had a good reason – he had been cited for illegal contracting during a CSLB sting in July and avoided getting caught again.

“It doesn’t matter what the conditions – rain, cold, or even after a natural disaster – unlicensed contractors always seem to come out of the woodwork,” said CSLB Registrar Steve Sands. “And they come to take advantage of a situation, no matter if they’re qualified or not to do the job.

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