Guide: How to Become a Licensed Contractor in California

With all of the rules and regulations surrounding the construction industry, California companies have it rough these days. Due to stringent state laws, companies are required to attain contractor’s licenses to perform any construction projects over $500. Failure to do so often leads to massive fines and possible jail time. Getting your license takes months, sometimes even years of test taking and preparation, but what if there was another way?

According to the California State License Board’s B&P Code 7065.1, all of the exams needed to attain a license can be skipped by working with a Responsible Managing Officer, or RMO for short. RMOs are license qualifiers who act both as supervisors and mentors to companies performing construction projects. By hiring an RMO, a company qualifying for a license can meet the requirements needed to get one without having to take any exams.

After getting licensed, new contractors can then act as RMOs themselves and help others achieve success in the construction industry. In the long run, contractors who decide to become RMOs create a stable network that values knowledge and hands-on experience resulting in Win-Win business opportunities for those both in pursuit of education and those willing to offer it.

The path to success in the construction industry is tough, but simple –all you have to do is follow the steps to getting licensed and join the RMO community. Those who dare take the first step toward becoming licensed contractors can enjoy long lasting and financially rewarding careers as RMOs. Why not start today?

What Type of License Do I Need?

While there is no such thing as an RMO license, anyone interested in becoming an RMO or performing construction duties in the state of California must attain at least a general contractor license. Contractor licenses are broken down into three branches, each of which has its own general area of focus or classification;

–          (A) General Engineering Contractor

The General Engineering License is geared toward companies that perform work requiring specialized knowledge of irrigation, plumbing, highway/road construction, chemical and industrial plant maintenance, excavating, parks and recreation services, and other similar fields.

–          (B) General Building Contractor

The General Building License is geared toward companies that are in the process of maintaining or constructing buildings used for support, shelter, human and animal enclosure, and other similar works that require the use of at least 2 or more trades or crafts. Unlike with the previous license, the General Building Contractor must observe two additional clauses within the license article.

b). A General Building Contractor may take a prime or subcontract for a framing or carpentry project if the contract also requires knowledgeable skill in 2 unrelated building trades or if the contractor holds a specialized license appropriate for framing and/or carpentry work.

c). A General Building Contractor is not allowed to contract any project requiring work related to C-16 Fire Protection or C-57 Well Drilling classification. This is due to the safety regulations surrounding these particular trades.

–          (C) Specialty Contractor

A Specialty Contractor is a contractor whose operation requires specific set of specialized skills and knowledge. Generally, this kind of license is geared toward those that want to perform: 1) fire extinguishing system testing or service work and/or 2) carpet, linoleum, or floor covering installation work. However, other subsects exist within the Class “C” Specialty Contractor group.

Class “C” Licenses can be broken down to more specific areas geared toward professions such as C11 – Elevator Contractor or C33 – Painting and Decorating Contractor. There are many more categories within the Class C field and each one requires a specific set of skills; therefore we encourage you to visit the CSLB website for more information and links to each classification.

How to Apply for a License?

If you are not currently a qualifying individual or working with one, then taking the high road and applying for a contractor’s license is definitely a step in the right direction. Getting licensed yourself by taking the necessary exams can be beneficial for those lacking the means needed to hire an RMO or RME, those who are unable to network, or those who simply prefer test taking to additional field experience.

If you and the project you want to work on do not qualify for exemption, then you must apply for a license by first filling out the application for an Original Contractor’s License and paying the $330 filing fee.

Then, you must provide a Certification of Work Experience form 13A-11 to prove that you have the necessary jobsite experience to be considered for licensure. These qualifications are: 4 years of experience as either of the following:

–          A journeyman -> a worker who can perform the trade in question without supervision or one that has completed a full apprenticeship program.

–          A foreman -> an individual who has the knowledge and skills of a journeyman and directly supervises physical construction.

–          A contractor -> someone who is already licensed and wishes to apply for a new license.

–          An owner-builder -> an individual with the experience of a journeyman who performs work on his/her own property (must submit a new form per project).

After submitting the application along with the necessary work experience form, you will be allowed to take the exam for your contractor’s license. The exam consists of two parts, a Law and Business exam as well as a specific trade exam covering the classification you are interested in. The CSLB website suggests purchasing the California Contractors License Law & Reference Book as well as several other handy study guides to help you prepare for the licensing exams.

After passing your exam, you are required to file a $12,500-$15,000 bond with the CSLB, submit a sample of your fingerprints for a background check, and provide proof of having an active Worker’s Compensation License.         California contractors must tread a long road to before becoming licensed. However, the penalties for working in construction without a license are severe and should be taken quite seriously. When it comes to career decisions, it is always better to remain on the right side of the law.

Can I Become a Contractor Without a License?

Currently, there is no legal way to become a contractor without a license in the state of California. However, individuals who meet at least one of the following conditions can qualify for an exemption:

The following can be explored further on the CSLB website.

§  Individuals or companies engaged in a project with a cumulative cost less than $500.

§  Handymen that do not work in an individually established business, have no direct control over work performed, and do not determine the final results of the project.

§  Public personnel working on public projects.

§  Officers of a court operating within the scope of their office.

§  Public utility workers working under specified conditions.

§  Oil and gas operations performed by the owner or lessee of a property.

§  Owner-builders who improve existing structures or build structures on their property either on their own or with their own wage employees.

§  Salesmen or installers of finished products that do not become fixed parts of a structure.

§  Sellers of installed carpets who have retail furniture dealer’s licenses.

§  Security alarm company operators that sell, monitor, maintain, and install alarm systems (excluding fire).

§  Individuals who install satellite antenna systems on residential property (must be registered with the Bureau of Electronic and Appliance Repair instead).

If you do not meet one of these conditions, then you must apply for a license. Penalties for operating without a contractor’s license are:

  • 1st time offenders -> misdemeanor charges + up to 6 months in jail and/or a $5,000 + an administrative fee of $200-15,000.

2nd time offenders -> a mandatory 90-day jail sentence + forfeiture of 20% of the offending contract price or a $5000 fine.

RMO (Responsible Managing Officer)

Getting away with operating without a contractor’s license is a long shot. In order to work safely and legally, you must apply for a license before performing the work in your desired trade. Thankfully, the process can be sped up by employing an RMO to act as a qualifying officer for your company.

        If you enjoy working with your hands and don’t want to delay that important construction project, then getting in touch with a seasoned professional is just for you. Working with an RMO will offer you real world experience that a test booklet simply can’t match.

        After earning your contractor’s license, you can pass your knowledge along by becoming an RMO yourself. As an industry professional you can then earn a comfortable living by performing part-time supervision duties for up to 3 companies at the same time. Why wait?         Of course, becoming an RMO involves making connections. RMO Agency is a company dedicated to expanding and supporting the RMO community. The agency pairs journeymen with licensed contractors, supports individuals through the application process, and helps both junior and veteran contractors find work. Visit the website to learn more.

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Business & Professions Code 7068.1

The person qualifying on behalf of an individual or firm under paragraph (1), (2), or (3) of subdivision (b) of Section 7068 shall be responsible for exercising that direct supervision and control of his or her employer’s or principal’s construction operations as is necessary to secure full compliance with the provisions of this chapter and the rules and regulations of the board relating to the construction operations. This person shall not act in the capacity of the qualifying person for an additional individual or firm unless one of the following conditions exists:

(a)There is a common ownership of at least 20 percent of the equity of each individual or firm for which the person acts in a qualifying capacity.

(b)The additional firm is a subsidiary of or a joint venture with the first. “Subsidiary,” as used in this subdivision, means any firm at least 20 percent of the equity of which is owned by the other firm.

(c)With respect to a firm under paragraph (2) or (3) of subdivision (b) of Section 7068, the majority of the partners or officers are the same.

(d)Notwithstanding subdivisions (a), (b), and (c), a qualifying individual may act as the qualifier for no more than three firms in any one-year period.

“Firm,” as used in this section, means a copartnership, a limited partnership, a corporation, or any other combination or organization described in Section 7068.

“Person,” as used in this section, is limited to persons natural, notwithstanding the definition of “person” in Section 7025.

The board shall require every applicant or licensee qualifying by the appearance of a qualifying individual to submit detailed information on the qualifying individual’s duties and responsibilities for supervision and control of the applicant’s construction operations.

CAL. BUS. & PROF. CODE §7065.1.

Notwithstanding Section 7065, the registrar may waive the examination for a contractor’s license under any of the following circumstances:

(a)The qualifying individual has, for five of the seven years immediately preceding the application for licensure, been listed on the official records of the board as a member of the personnel of any licensee who held a license, which was active and in good standing, in the same classification being applied for, and who during the period listed on the license has been actively engaged in a licensee’s construction activities in the same classification within which the applicant applies for a license.

(b)The qualifying individual is an immediate member of the family of a licensee whose individual license was active and in good standing for five of the seven years immediately preceding the application for licensure, and the qualifying individual is able to show all of the following:

(1)The qualifying individual has been actively engaged in the licensee’s business for five of the seven years immediately preceding the application for licensure.

(2)The license is required to continue the existing family business in the event of the absence or death of the licensee.

(3)An application is made for a new license in the same classifications in which the licensee is or was licensed.

(c)The qualifying individual is an employee of a corporation seeking to replace its former qualifying individual and has been employed by that corporation under the following conditions:

(1)For five of the seven years immediately preceding the application for licensure, the qualifying individual has been continually employed by the corporation in a supervisory capacity in the same classifications being applied for.

(2)For five of the seven years immediately preceding the application for licensure, the corporation has held an active license in good standing in the same classifications being applied for.

The corporation has not requested a waiver under this subdivision within the past five years.

For purposes of this section, employees of a corporation shall include, but not be limited to, the officers of a corporation.