Similar to other states in the U.S., California requires most construction contractors to obtain a license in order to perform their craft. Valid licenses are the first indication to a homeowner, business or government entity that you are qualified to do the job for which you are bidding.
Licensing protects both consumers and the contractor. The licensing process tests basic competency and also helps screen out dishonest contractors. The state licensing dispute resolution program also protects both the contractor and the individual or business for which work was completed in the event of a claim of insufficient or inferior work.
Legal requirements aside, obtaining a contractor’s license in California offers a number of benefits to anyone who wants to start a contracting business or who is moving here from another state.
For the average homeowner, not to mention businesses as well as government entities, obtaining a California contractor’s license will give your operation credibility. No city, county or state agency will use your services if you are not licensed by the state of California. In addition, homeowners are also savvy these days and will demand to see your state license as proof that your contracting business is credible.
In addition to receiving instantly credibility, obtaining a state license has long-term benefits. As a licensed contractor you will be able to bid on larger, better paying jobs and government contracts, thus allowing you to make more money. Additionally, many homeowners, and even some business owners are willing to pay higher rates to licensed contractors because of the peace of mind that licensing provides.
Requirements to Obtain a Contractor’s License
To apply for a contractor’s license from the California Contractor State Licensing Board, you must meet a number of requirements. Applicants must be at least 18 years old and have a valid social security number.
Another important requirement is that applicants must show that they have the necessary experience and skills to manage daily operations of a construction business, including supervising employees, demonstrating knowledge of the chosen construction field and the ability to quote jobs. You must have four years of experience in the class for which you are applying to qualify for examination. Credit for experience is only awarded to individuals who have worked as journeymen, foremen or have completed an apprenticeship program.
Owner-builders can also meet the experience requirement if they complete a construction project engineering form for all projects completed. All experience claims must have verification from qualified individuals such as an employer,
contractor, union representative, architect, engineer, etc.
You will also qualify for 1.5 to 2 years of experience if you submit transcripts for education from an accredited school or college upon completing an Associate of Arts degree in building or construction management or a four-year degree from a college or university in related construction fields. Make sure you understand what types of documentation are appropriate before applying.
Examination and Bonding Requirements
In addition, the CSLB requires that you successfully complete two exams before the license is issued: one on law and business and the other on your chosen trade. The CLSB provides examination guides that can help you student for licensing tests. Each guide is available as a PDF document that details examination topics, provides sample questions and additional resource information to help you study, outlines test site policies and test strategies.
Before the CSLB can issue a license, you must obtain and show proof that you have filed for a $15,000 surety bond. This protects consumers who may incur damages resulting from defective construction or other license law violations and for employees that may not have been paid wages owed to them. Applicants representing a construction firm classified as a corporation, partnership, joint venture and limited liability company (LLC) also require a Bond of Qualifying Individual if a Responsible Managing Employee (RME) qualifies the license. Detailed information on the requirements for each type of bond can be found on the California Contractor State Licensing Board bond page.
Types of Contractor’s Licenses in California
CSLB divides contractor’s licenses into three classifications: general engineering contractor, general building contractor and specialty contractor.
General engineering contractors deal in fixed works that require specialized engineering knowledge and skills. Most work that falls under this classification involves large corporate or governmental projects.
These include but are not limited to:
• Irrigation, drainage, water supply, flood control, harbors, docks and wharves, shipyards, ports, dams, levees and river control
• Highways, streets, tunnels, airports, railroads, bridges, overpasses and underpasses
• Sewers, sewage disposal and waste reduction
• Pipelines for oil and gas, refineries and chemical plants
• Parks and recreational facilities
• Powerhouses and utility plants
• Land leveling and earthmoving, excavations and grading
• Paving, surfacing, cement and concrete works
The main work of general building contractors involves the construction of structures for people, animals or movable property that requires coordination and supervision of two or more unrelated building trades. General contractors are often considered framing or carpentry contractors. While this is true, in a sense, general contractors cannot take on a prime contract or subcontract for framing or carpentry unless two other sub-specialties are involved in the construction. They can also apply to obtain specialty licenses to reduce the need for subcontractors. General contractors can oversee residential, commercial and governmental projects.
Specialty contractors are those contractors whose operations require special skills and involve the use of specialized tradespeople or crafts. California issues the following specialty licenses:
• Insulation and acoustical
• Boiler, hot water heating and steam fitting
• Framing and rough carpentry
• Cabinet, millwork and finish carpentry
• Earthwork and paving
• Flooring and floor covering
• Fire protection
• Warm-air heating, ventilation and air conditioning (HVAC)
• Building moving/demolition
• Ornamental metal
• Lock and security equipment
• Construction zone traffic control
• Parking and highway improvement
• Painting and decorating
• Lathing and plastering
• Sanitation system
• Sheet metal
• General manufactured housing
• Reinforcing steel
• Structural steel
• Swimming pool
• Ceramic and mosaic tile
• Water conditioning
• Well drilling
Several situations do not require a contractor’s license for providing construction work. The most common one is the minor work exemption, which comes into play if the total cost of labor and materials is under $500 for a project.
Other licensing exemptions include:
• Employees of contracting companies who do not have direction or control over work
• Public employees
• Owner-builders who perform work on their own properties
• Manufacturers who sell or install finished products that are not fixed parts of a finished structure
How to Apply
The fee for your original application is $300, which gives you an exam or waiver for one application. Individuals can apply for more than one classification but must take the exams and pay the fees associated with each application. You may also have to pay additional fees for fingerprinting, live scan rolling and other requirements.
Licensing payments are accepted only by mail or in person at CSLB’s headquarters, 9821 Business Park Dr., Sacramento, CA 95827. Mail payments must be check or money order. The headquarters office also accepts payments via VISA, Mastercard, Discover and American Express.