Are you an experienced contractor who has just moved to California and wants to start working right away? Or maybe you’re just starting out in the construction industry and you need to get work experience?
In either case, the thought has probably crossed your mind – do you really need to get your own California Contractors State Licensing Board (CSLB) contractor license? Why not just borrow a friend or family member’s contractor license?
In this article, we’ll cover everything you need to know about whether you can work under someone else’s contractor license in California.
Do I Need A Contractor’s License?
If you’re an experienced contractor with all the skills required to build, renovate, and repair, you might think, “Why don’t I just do the work without a license? I know how to do it.”
The answer is much like driving a car without a suspended license – it’s against the law, and if you do so, you could face serious criminal penalties, including jail time. (Now that we think about it, almost everything about CSLB licenses is like driver’s licenses!)
The CSLB – the legal authority here – requires ALL contractors to hold a valid CSLB contractor’s license in their specific classification, whenever performing work over $500.
So, Can A Contractor Work Under Someone Else’s License?
Strictly speaking, the answer is no – you cannot perform construction work on jobs with a value over $500, including materials, without a valid CSLB contractor’s license.
Here’s why:
- A Contractor’s license is not transferable: A contractor license issued by the CSLB is strictly in the name of the license holder and is non-transferable. This fact effectively rules out the possibility of ‘working under’ someone else’s license.
- Responsibility and accountability issues: The license holder assumes complete responsibility for all operations, including the quality of work and financial obligations. Allowing another contractor to work under their license could expose the license holder to significant risk and liability.
Exceptions to the Rule: The RMO and RME
While the general rule is clear, there are a couple of exceptions – the Responsible Managing Officer (RMO) and Responsible Managing Employee (RME). In these scenarios, it might appear as if a contractor is working under another’s license, but the dynamics are a bit different.
- Responsible Managing Officer (RMO): An RMO is an individual who is a bona fide officer of the company and may hold as little as 10% of the voting stock. They have direct control and supervision of the company’s operations and can be held personally liable for violations.
- Responsible Managing Employee (RME): An RME is an individual who is employed by the licensed entity and actively involved in the day-to-day activities of the business. The RME cannot engage in any other business that could detract from their duties for the licensed entity.
In both these roles, the individual’s personal contractor license becomes associated with the company, effectively allowing ‘working under’ the company’s license. Oftentimes this exception is used to gain the necessary work experience for a would-be contractor.
Remember, the CSLB expects the RMO or RME to exercise direct supervision and control, thus ensuring quality and consumer protection. Any issues with the work will mean the RME or RMO will be held personally responsible.
A Quick Word On Reciprocity
Although this is technically NOT an exemption to the contractor’s license requirements set forth by the CSLB, it IS possible to fast-track your contractor’s license in California if you hold a valid contractor’s license in Arizona, Louisiana, Nevada, and Utah.
Check out our blog post on reciprocity agreements for more information.
The Final Word: “No.”
In a word, NO, you cannot work under someone else’s contractor license in California.
There are a couple of exceptions – RMEs and RMOs – and it is possible to get your license in California without going through the regular route to get your license.
The penalties for doing unlicensed contracting work in California can be severe – including fines and prison time. When in doubt, assume that if you’re doing any sort of contracting work in California – you need your own contractor’s license.
Put it this way: you wouldn’t use someone else’s driver’s license to be legally able to drive a car, so why would you be allowed to do the complicated engineering of building a home?