California contractors will see an increase in licensing fees effective January 1, 2022. The Contractors State License Board (CSLB) licenses contractors; enforces contractor laws; and provides consumer education and protection against unlicensed contractors, unlawful and unprofessional practices. The CSLB is funded entirely by license fees. Due to increased operating costs, the CSLB is raising fees to ensure they continue to effectively regulate California’s construction industry.
Initial license and renewal fees are divided by entity type: sole owner, corporations, partnerships, joint ventures, and limited liability companies. Here’s a breakdown of the fee changes starting New Year’s Day 2022.
The Importance of Being Licensed in CA
California requires any company or individual that performs work valued at $500 or more to possess an active contractor's license. This includes constructing or altering any building, road, highway, railroad, parking facility, excavation or other structure within the state. There are several license classifications that cover a wide range of work, including landscaping, swimming pool construction, remodeling, construction, electrical work, and plumbing, to name a few.
Operating without a license can be costly and may even result in arrest. The CSLB has a statewide investigative unit that conducts stings in an effort to pursue unlicensed contractors. Under California law, violators might spend up to six months in jail or pay a $500 fine plus an administrative fee, ranging from $200 to $15,000. Additionally, customers are not legally required to pay for projects valued at $500 or more if the contractor is not properly licensed.
Resources for CA Contractors
The CSLB is the primary source for information regarding legal requirements for contractors. They also provide resources on consumer protection laws and homeowner rights when hiring a contractor. The CSLB may be reached at (800) 321-CSLB (2752) or at the web address www.cslb.ca.gov.
Business Consumer Alliance (BCA) is another valuable resource for contractors. We provide alerts on changes to the law impacting contractors and helpful guides on best practices to help contractors protect their business. Check out BCA’s Contractor Resources for information to help grow your contractor business.
Those considering licensing can benefit from some of our helpful blogs including, “Differences of a Handyman & A Contractor in CA”, a guide that outlines the role of a handyman; and “Requirements for Contractor’s License in California”, which breaks down the steps to become a licensed contractor in California.
Licensees make valuable contributions to the community and BCA is here to help. Stay up-to-date on all things business-related by following BCA on Facebook. Make sure to share this information with others.
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