Scope of Cover found that a Contractors State License Board (CSLB) sting in Bakersfield, California, resulted in nine stop orders to halt work at job sites. The CSLB issued the orders because the contractors failed to provide workers' compensation insurance for their employees. During the operation on March 20 and 21, the agency also cited 12 individuals for allegedly conducting contracting work without a required license.
Key figures
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This sting operation took place in Bakersfield on March 20 and 21 where CSLB cited 12 individuals for allegedly conducting contracting activities without the required license.Open the source
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In addition, nine stop orders were issued during the operation, halting work at job sites where contractors failed to provide workers' compensation insurance for their employees.Open the source
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A California contractor’s license is required to bid or contract for construction work exceeding $500 in value, including materials and labor.Open the source
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If unlicensed individuals advertise contracting services, they must explicitly disclose their lack of licensure and cannot bid or contract for work valued at more than $500.Open the source
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These offenders were issued Notices to Appear in criminal court and could face legal consequences, including fines up to $15,000 and/or jail time.Open the source
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Those who are caught contracting without a license likely will have to appear before a Superior Court judge to answer to misdemeanor charges that can carry a potential sentence of up to six months in jail and/or a $5,000 fine, as well as an administrative fine of $200 to $15,000.Open the source
#The Bakersfield Sting Operation
A Contractors State License Board sting operation took place in Bakersfield, California, on March 20 and 21.
The CSLB also issued nine stop orders to halt all work on job sites. These orders were prompted by contractors failing to have workers' compensation insurance for their employees, a mandatory coverage in California.
#When Is a Contractor License Required in California?
California law requires a contractor's license for any construction work where the bid or contract value is $500 or more. This threshold includes the combined cost of both materials and labor.
State law also makes it illegal to advertise for construction or home improvement services without holding a valid license in the advertised trade. If an unlicensed person does advertise, they are required to state clearly that they are not licensed. They cannot bid on or accept work valued at more than $500.
#What Are the Penalties for Unlicensed Contracting?
Operating without a contractor's license in California is a misdemeanor offense. The violation carries potential penalties of fines up to $15,000 and/or time in jail.
The penalties for a first offense can be substantial. In addition to potential jail time, offenders face both criminal and administrative fines.
| Penalty Type | Maximum Amount or Sentence |
|---|---|
| Criminal Fine | Up to $5,000 |
| Jail Time | Up to six months |
| Administrative Fine | $200 to $15,000 |
#California's Workers' Compensation Mandate
California law mandates that all employers carry workers' compensation insurance. This applies even if the business has only one employee.
For licensed contractors, maintaining this coverage is a condition of licensure. Failure to keep workers' compensation insurance active will result in the suspension of the contractor's license. Any work a contractor performs while their license is suspended is considered unlicensed work and can lead to disciplinary action.
#Enhanced Penalties and Other Consequences
Certain actions can escalate charges from a misdemeanor to a felony. Felony charges may be filed against anyone who illegally uses another person’s contractor license or who tries to mislead consumers into believing they are a licensed contractor.
Working without a license in a designated disaster area can also trigger more severe consequences. Anyone contracting for work in a state or federal natural disaster area without an active state contractor license could face felony charges.
Unlicensed contracting also affects payment. Consumers in California are not legally required to pay a person who is not state-licensed for their work. The unlicensed individual also has no legal recourse to sue the consumer for non-payment.
Frequently asked questions
What is the penalty for a first offense of contracting without a license in California?
For a first offense, penalties can include up to six months in jail, a criminal fine of up to $5,000, and a separate administrative fine from $200 to $15,000.
When does a contractor need a license in California?
A California contractor's license is required for any construction bid or contract valued at $500 or more for both labor and materials.
Are California contractors required to have workers' compensation insurance?
Yes. California law requires any employer, including contractors, to carry workers' compensation insurance if they have even one employee.
What happens if a licensed California contractor lets their workers' comp lapse?
Failure to maintain workers' compensation insurance results in the suspension of the contractor's license. Working with a suspended license is treated as unlicensed work.
Do I have to pay a contractor who does not have a California state license?
No. According to California rules, consumers are not legally required to pay a person who is not state-licensed, and that person cannot sue for payment.
Sources
- CSLB: Bakersfield sting operation press release (April 2024)Contractors State License Board · retrieved
- CSLB: Consequences of contracting without a licenseContractors State License Board · retrieved
- CSLB: Workers' compensation insurance for licenseesContractors State License Board · retrieved
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