Hey contractors! Starting your own construction business is an exciting journey. As you grow, hiring your first employee is a big milestone. To make sure this step goes smoothly, here are the biggest mistakes to avoid. Let’s dive in!

1. Failing to Verify a Potential Employee’s Qualifications

• Before you hire anyone, always verify their qualifications. This includes checking their licenses, certifications, and work history. The Contractors State License Board (CSLB) makes it easy to verify licenses online here.
• Example: Imagine hiring a carpenter for a major renovation without verifying their skills. Midway through, you realize their work is subpar, causing delays and extra costs. Avoid this by thoroughly checking qualifications upfront.

2. Forgetting to Gather References and Reviews

• Always check references and reviews before hiring. It might seem like extra work, but it’s crucial. A reputable candidate should have no problem providing references from past employers or clients.
• Example: Let’s say you’re considering two candidates for a project manager position. One has glowing references and reviews, while the other is hesitant about providing them. Choosing the first one reduces your risk of hiring someone who might not meet your expectations.

3. Failing to Hire Someone with Local Experience

• Local experience is invaluable. Employees familiar with your area know local building codes and regulations, which can prevent costly mistakes and delays.
• Example: If you’re working in Los Angeles, hiring someone who has previously worked in the area ensures they understand local seismic requirements. An out-of-town hire might not have this crucial knowledge, leading to compliance issues and project delays.

4. Skipping the Step of Checking Insurance and Legal Requirements

• Make sure your new hire meets all legal requirements, including proper insurance coverage. Verify that they have liability insurance and workers’ compensation insurance if applicable. This protects both of you in case of accidents or property damage.
• Example: During a roofing job, your new hire falls and gets injured. Without workers’ compensation insurance, you could be held liable for medical bills and legal fees. Always confirm insurance coverage to avoid such risks.

5. Failing to Get a Signed Employment Agreement

• A written employment agreement is essential. Verbal agreements might seem convenient, but they can lead to misunderstandings and legal disputes. Your agreement should clearly outline the scope of work, employment terms, payment, and other essential details.
• Example: You verbally agree on a job scope with your new hire. Later, they start demanding additional tasks and compensation. Without a written agreement, resolving these disputes becomes difficult. A clear, written agreement prevents such issues.

Takeaways

Hiring your first employee is a significant step in growing your construction business. Avoiding these common mistakes will set you up for success:

• Verify the candidate’s qualifications to ensure they are fit for the job.
• Check references and reviews to gauge their reputation and work quality.
• Hire individuals with local experience for knowledge of local codes and established relationships.
• Confirm insurance coverage to protect yourself from financial risks.
• Get a signed employment agreement to ensure clarity and accountability.

By following these steps, you can feel confident in your choice of employee and pave the way for a smooth, successful business expansion. Keep building, and stay safe!

The process of finding, vetting, and hiring subcontractors to work on your construction project can be absolutely brutal. As general contractors, project managers, construction managers, or just another contractor looking for someone to do another part of your job, you have a ton on your plate – and finding and vetting contractors is a long, arduous process, so many people may want to skip it entirely.

Finding the right person to do your construction job is difficult and stressful – how do you know you’re not hiring some schmoe without the experience to do the job properly? If they even do the job at all after your deposit hits their bank account!

That’s where contractor’s licenses come in. These legal requirements establish a benchmark for construction work; a contractor’s license says “This person can do construction work up to a level that is safe.” Finally, contractor licenses also offer protections for those hiring them – as it ensures swift and harsh punishment to those who would fall afoul.

But even with these safeguards, what’s stopping someone from fraudulently pretending to be licensed? Do they even have to tell you if they’re licensed?

In this article, we’ll take a brief look at the responsibilities of contractors, and what information they have to disclose to their clients.

What Does It Mean to Be a “Licensed” Contractor?

Being a “licensed” contractor means that an individual or business has met the required qualifications set by governmental authorities to perform construction work in accordance with their training and experience.

While licenses are not required in every state, they are required in most states to take on construction work. In order to be a licensed contractor you must receive a contractor’s license. Contractor’s licenses are often acquired by meeting qualifications that often include being 18 years of age, passing exams, having a certain level of experience, and carrying insurance and bonding.

Do You Need to Be a Licensed Contractor to Do Construction?

The requirement for a contractor to be licensed depends on the state and the scope of the work. Usually, there is a monetary threshold that will immediately signal the need for a contractor license.

In California, for example, something called the Minor Work Exemption stipulates that all construction jobs over $500 in materials and labor require a contractor’s license. These numbers can change constantly – a recent change in North Carolina law allows unlicensed contractors to take jobs up to $40,000, up from the previous threshold of $30,000.

While you don’t technically need a license for all construction jobs, most quality contractors will have a license, so in reality, you should look for one who has a license.

Is It Illegal to Hire an Unlicensed Contractor?

Hiring an unlicensed contractor is not illegal in all cases, but it can pose significant risks. The legality depends on local laws and the type of work being performed, so it’s on you to make sure that you’re staying compliant.

While some minor repairs or projects may not require a licensed contractor, major renovations or construction often do. Ignorance of these requirements can result in penalties, fines, and issues with insurance claims. Again, this is on you as the hiring party.

What Happens If You Hire a Contractor That Is Not Licensed?

In many circumstances, nothing. But in the circumstances where something does go wrong, hiring an unlicensed contractor leaves you with absolutely no recourse.

Hiring an unlicensed contractor can lead to several problems, including poor quality work, legal and financial liabilities, and difficulties in resolving disputes, but that’s just the beginning of the issues.

If something goes wrong, homeowners, general contractors, or project managers can’t really do anything but eat the costs of the issues, as, without a contractor license, there is no automatic legal system in place to make you whole as the hiring party.

Basically, hiring unlicensed leaves you completely out in the cold should something go wrong.

Do Contractors Have To Tell Clients If They’re Unlicensed?

Contractors are generally required to display their license number in advertising and on business cards. They should also provide their license information upon request.

If a contractor is unlicensed for a job that requires licensing, they must inform the client upfront, whether that’s just another contractor or the one who owns the property. Failure to do so can result in legal penalties and loss of business.

How to Check a Contractor’s License

• Visit the state or local licensing board’s website: Most jurisdictions have online databases where you can search for a contractor’s license status by name or license number.
• Request proof of license: Ask the contractor for their license number and verify it with the appropriate regulatory body.
• Check for complaints or disciplinary actions: Some licensing boards also provide information on any complaints or disciplinary actions taken against a contractor.

What to Look Out for When Hiring a Contractor

• License classification: Check to make sure the contractor is licensed to perform the work required.
• License status: Ensure the contractor’s license is current and up-to-date. An expired license is no license at all.
• Insurance and bonding: Verify that the contractor carries insurance and a surety or contractor’s bond. This will ensure you have legal leverage in the case of nonpayment or damages.
• References and past work: Ask for and check references, and if possible, view previous projects.
• Written contracts: Always get a detailed written contract outlining the scope of work, materials, timelines, and payment terms. In many states, this is a legal requirement.
• Avoid large upfront payments: Pay in phases as work is completed, and avoid paying a significant portion of the cost upfront.
• Permits and approvals: Make sure the contractor is responsible for obtaining all necessary permits and inspections.

Hiring a licensed contractor provides a level of assurance and protection for both the homeowner and the contractor. Licenses are designed to create trust and protection for both parties and in reality, they do that very effectively.

While it may be tempting to save money by hiring an unlicensed contractor for smaller jobs, the risks involved can outweigh the initial savings. Stuff like quick paint jobs or patchwork is fine for unlicensed work, but anything beyond that, you’re better off getting someone who knows what they’re doing.

When hiring a contractor, checking their license is one of the first things you should do. It presents a quick way to cut the contractor’s wheat from the chaff – guaranteeing the person is able and trustworthy to do your construction job.

For the contractors out there who anticipate being tapped for excavation, grading, paving, or any other such related jobs in construction in the near future, this guide was put together for you.

In this post, we’ll get into what the C-12 license is all about and all the requirements you should be thinking about before you apply for it.

Have you wondered about whether this license requires you to carry workers’ compensation for yourself? Have you wondered whether general contractors should hire C-12 contractors for their projects as subcontractors? We cover it all right here in this article.

What Does “Earthwork and Paving” Entail According to the C-12 License Parameters?

This C-12 Earthwork and Paving License is a specialized classification issued by the Contractors State License Board (CSLB) in California.

“Earthwork” is a term that generally refers to preparing a plot of land for construction or landscaping projects. And this special C-12 license is dedicated to digging.

Contractors with this license are authorized to take on projects involving excavation, grading, paving, and related activities.

Landscaping work is also covered by this license — including but not limited to the installation of drainage systems and implementing of erosion control measures.

C-12 contractors play a huge role in site prep, road construction, and infrastructure development.

C-12 Contractors License Requirements

If you’d like to obtain a C-12 contractor’s license, you must meet the following requirements to be considered a qualifying individual:

• The Basics
  • You must be at least 18 years old.
  • You must have a valid Social Security Number or Individual Taxpayer I.D. Number.
  • You must be legally authorized to work in the United States.
• Experience
  • To apply for this license you need at least four years of qualifying experience (journey-level, foreman, supervisor, or contractor) within the past 10 years. And that experience must be from contractor work within the C-12 trade.
  • You can get credit for up to three years for technical training, apprenticeship training, or education toward the four required years of qualifying experience. Again, that needs to be C-12 trade-related experience since that’s the license we’re talking about here.
• Passing Score on the Exam
  • You have to pass the CSLB’s Law and Business Exam and the C-12 Earthwork and Paving Contractors License exam. This part is mandatory. If you do not pass the test, you will be given a shot at a retake and instructions on how to schedule another test.
• Financial Requirements
  • You’ll need to show that you’re prepared to take on the financial responsibility that comes with this license.
• Background Check
  • Applicants going after this license should be prepared to go through a background check. It’s to check your qualifications and to ensure compliance with licensing regulations.
  • Qualifying individuals who successfully pass the exam are cleared to submit a C-12 Contractors License application.

Are C-12 Contractors Required to Carry Workers Compensation Insurance?

For now, C-12 licensed contractors are only required to maintain workers’ compensation insurance in California if they have employees.

In 2026, all contractors will have to carry workers’ compensation insurance even if they don’t have employees.

According to this CSLB Industry Bulletin, the special class licenses that require individuals to carry workers compensation insurance to keep themselves covered are C-8 (Concrete), C-20 (Warm-Air Heating, Ventilating and Air-Conditioning), C-22 (Asbestos Abatement) and D-49 (Tree Service).

Should General Contractors Hire a C-12 Licensed Contractor?

Yes, absolutely! General contractors who have projects on their slate involving earthwork, grading, paving, and similar activities should strongly consider drafting up a subcontract and bringing C-12 licensed contractors into the fold.

Just a few reasons include:

• Expertise
  • C-12 licensed contractors bring specialized knowledge and skills with them. Whatever a general contractor’s earthwork and paving needs, a C-12 subcontractor can come in and ensure quality workmanship that meets the standard.
• Compliance
  • General contractors need to hire licensed contractors in order to remain compliant with state regulations and licensing requirements per the CSLB.
  • If a general contractor or anyone without a C-12 license attempted to complete earthwork and paving construction work, it would put everyone at risk of facing legal trouble and penalties.
• Risk Management
  • C-12 contractors come with insurance coverage that unlicensed contractors do not! General contractors mitigate risk when they bring in contractors with the special class C-12 license to handle this specific work.
  • This covers the general contractor and the construction client financially in the event of accidents, injuries, and property damage.
  • Also, subcontracting earthwork and paving tasks to C-12 contractors lets general contractors focus on the rest of their jobs. They already have a lot to manage and risks to mitigate elsewhere!

In Summary

The C-12 Earthwork and Paving Contractors License is an important one if you plan on digging into excavation, grading, paving, and other related work.

If you’re a general contractor overseeing a project that involves earthwork and paving, the best course of action is to hire a C-12 contractor to handle that work.

If, however, you’re a contractor who wants to take on that work yourself, you must meet the CSLB’s requirements before you qualify, pass your exam, and apply for the C-12 license.

A contractor holding a valid and active C-12 license has demonstrated their expertise in this specialized trade — earthwork and paving. Anyone who hires them can trust that they are in compliance with the CSLB and that they are qualified to uphold quality and safety standards on construction projects.