- Roads
- Buildings
- Railway
- Highway
- Excavation
- parking facilities
- development or improvement
A contractor may also help build scaffolding or other structures. They may also be responsible for cleaning grounds or other structures. The term is synonymous with the term “builder.” Additionally, contractors also include “subcontractors” and “special contractors.”
There are also terms like licensed and non-licensed contractor that you need to know. Contractor Requirements Contractor Classification
- Must be 18 years of age or older
- Having the experience and skills required for the construction business
- Have a Social Security number or Individual Taxpayer Identification Number
- Passed written law and business exams (unless they meet the requirements for an exemption)
An unlicensed contractor, on the other hand, is the opposite of a licensed contractor. Although they may be over 18 and have the required experience, they are not licensed if they cannot pass the exam. If they do a poor job on a home or renovation project and do not have a license, you could be sued for up to $10,000 in California small claims court .
How can a contractor work under someone else’s license in California?
So what does this mean for contractors who want to work under someone else’s license in California? It depends on whether that person will be performing any work that requires a license.
For example, if an unlicensed contractor will only perform administrative tasks, he or she will not need any additional permits. Activities such as answering phones or filing papers do not require a license from the Contractors State License Board (CSLB).
But if a person wanted to work under someone else’s license in California, that would be a completely different story. There are two potential drawbacks to this scenario.
First, a person can work under a qualifier. A qualifier meets the licensing knowledge and experience requirements and passes a written exam. They can have up to two licenses as long as they are responsible managing employees (RME).
A qualifier may also be an owner, officer, or member of an LLC or partnership. This process is permitted as long as the qualifier directs and controls the applicant’s construction operations.
Another loophole is to become a statutory employee . These are individuals who provide construction services to a contractor who is either licensed or required to obtain a license.
Who is a statutory employee of a contractor?
Certain conditions must be met to qualify as a statutory employee. A statutory employee is an independent contractor who is considered an employee for tax withholding reasons.
They pay their fair share of Medicare and Social Security taxes and meet their employer’s specific requirements. There are several instances where a person becomes a statutory employee.
For example, a contractor with a valid California contractor license hires an out-of-state subcontractor. Without a valid California contractor license, the subcontractor becomes a statutory employee of the contractor.
In addition, all employees of the subcontractor are statutory employees of the contractor under CUIC sections 621.5 and 13004.5.
punishment for committing a misdemeanor
Although qualified and statutory employees are allowed in California, some people abuse this exemption. Many qualifiers allow home improvement or other contracting activities to be performed using their license without direct involvement in such work. Some simply ask workers for a monthly fee to use their license.
This resulted in negligent, illegal and fraudulent activities by the companies. In turn, the qualifiers were not aware of the activity because they were not overseeing the work, as was expected.
As stated in BPC section 7028, a misdemeanor is based on one of two conditions:
- A person who does not have a license
- A person works with a suspended license
A first-time offender can be fined no more than $5,000. The offender can also be imprisoned in a county jail for no more than six months. In some cases, the law may punish them with both the fine and imprisonment.
In case of a second conviction, one of the following fines (whichever is higher) will be imposed:
- $5,000
- 20% of the contract value
- 20% of the total payment
In addition, the individual will be placed in the county jail for a minimum of 90 days. Finally, a third time conviction can result in a fine of at least $5,000 or a maximum of $10,000. Or 20 percent of the contract price and total payment.
This also includes imprisonment in a county jail for more than one year or less than 90 days.
Understand how the Contractor’s Code works
When asked “can a contractor work under someone else’s license in California” the answer is yes. There are legitimate loopholes to do so. But you should know that it is illegal to work as an unlicensed contractor in the state of California.
Always be aware of what you are doing so you don’t get penalized for doing something wrong.