LEGAL NEWS


Contractor Licensing Issues: Contractors Must Be Wary and Vigilant to Ensure Compliance with Licensing Laws


BY BRENDA RADMACHER, ESQ., SEYFARTH SHAW, LLC N


o one wants to talk about com- pliance issues, but for California contractors, being aware of the


requirements for compliance with con- tractor’s licensing laws is critical – and the details matter! In recent years, several changes have


been made to the California License Law that contractors need to understand to stay compliant and on the right side of the law. Four new laws were also passed in 2024 that all contractors must be aware of and comply with. Some of the new requirements are minor adjustments, and others are more disruptive. Four new laws of note in 2024 include:


• Email Address. Required to provide an email address (when available) when a new or renewed license is obtained (SB 630 (Dodd)); failure to comply with license conditions can lead to automatic license revocation.


• Workers’ Compensation. Required to provide the top three workers’ compensation classification codes on the contractor’s workers’ compensation policy when renewing the license (AB 336 (Cervantes));


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CALIFORNIA CONSTRUCTOR JANUARY/FEBRUARY 2025


renewal will not occur without the codes. (However, retroactive renewal is available if cured within 30 days of notice.)


• Limits on subcontracting by specialty contractors. Specialty contractors may not subcontract with two or more contractors in the same classification on the same jobsite unless the subcontractor has employees who perform the work in the relevant classification or are party to a collective bargaining agreement (AB 1204 (Holden)); disciplinary action can be taken for violations.


• Expanded time to sue for allowing an unlicensed person to use your contractor license (SB 601 (McGuire)) Te statute of limitations is increased to three years for misdemeanor violations for allowing an unlicensed person to use your contractor license. California enacted the California State


Contractor’s Licensing Law (“CSLL,” California Business & Professions Code § 7000, et seq.) to regulate all contractors. The law requires them to be licensed


(except for authorized government rep- resentatives, certain property owners working on their own property, or projects costing less than $500). Te California State Licensing Board


(CSLB) serves to enforce the CSLL for all licensed contractors as well as anyone acting as a contractor without being properly licensed and allows for imposi- tion of fines as actions of misdemeanors and felonies. Te CSLL is intended to protect the


public from incompetence and dishonesty in those who provide building and con- struction services by providing minimal assurance that the contractor has the requisite skill and character, understands applicable local laws and codes, and knows the basis of running a contracting business. (Judicial Council of California v. Jacobs Facilities, Inc. (App. 1 Dist. 2015) 239 Cal.App.4th 882, modified on denial of rehearing, review filed, review denied.) But it is not necessarily that simple. A contractor must not only pass the


necessary tests covering topics of building, health, safety, liens, and administrative issues but also properly maintain and


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