Construction is booming in California. This is creating opportunities for ambitious tradespeople who want to enter the building, renovation, and home maintenance fields. You could build great success in the Golden State with the right skills and determination!
You need a license to work as a contractor in California. The general contractor license has many classifications and subclassifications covering dozens of skilled trades.
This article covers what you need to know about getting a contractor license in California, including eligibility, application, and insurance requirements for small business owners.
Who needs a contractor license in California?
You must get a contractor license in California if you work on a project with a total cost (labor and materials) of $500 or more. This applies to all businesses and individuals, including subcontractors, specialty contractors, and home improvement professionals. The Contractors State License Board (CSLB) issues contractor licenses to individuals, partnerships, joint ventures, corporations, and limited liability companies (LLCs) in the state.
Some states issue separate licenses for specific specialty trades, but a contractor license applies to a broad umbrella of tradespeople in California. If you are seeking a carpenter, plumbing, electrician, painter, HVAC, or handyman license in California, you should apply for a contractor license under the classification for your skilled trade.
Who can become a contractor in California?
To get a California contractor license, you must meet the general contractor license requirements. License applicants must:
- Be 18 years or older
- Have a valid Social Security number or individual taxpayer identification number
- Have at least 4 years of relevant work experience
Applicants may be able to use relevant education or military service towards meeting the work experience requirement. For example, if you have completed an apprenticeship, technical training, or education in your trade beyond high school, these can often be counted as work experience.
Contact the CSLB or visit their website for more information about meeting California’s general contractor license requirements and how to apply for a work experience waiver.
How do I get a contractor license in California?
If you are eligible to get a California contractor license, you must complete the following steps to obtain one:
- Complete and submit the application – You will need to pay $450 fee to process your application. (Please check the CSLB website, as fees may change.)
- Submit your fingerprints for a background check – The CSLB will let you know how and when to do this after your application has been reviewed.
- Pass the required exams – You will need to pass two main exams: a law & business and a trade exam. (Some contractors may qualify for a waiver and can skip these tests.)
- Pass the asbestos exam – All applicants must also pass an open book exam on asbestos handling and removal. You can take this exam through the CSLB website or request a paper copy.
- Receive your license – There are additional licensing requirements you may need to meet once your license is issued
Your contractor license must be renewed every two years. Unlicensed contractors may face fines and jail time for a first offence, with increased fines and penalties for each violation after that.
Do California contractors need business insurance?
There are additional general contractor license requirements that you may need to meet to keep your license active. Showing proof of specific insurances may be necessary in some circumstances.
All businesses in California must have Workers’ Compensation insurance before they hire their first employee. If you are a sole proprietor, you are not required to have this type of coverage unless you are a roofing contractor. They must have Workers’ Compensation insurance even if they are a sole proprietor.
You must also show proof of General Liability insurance. The CSLB will send you a letter explaining the minimum coverage amount you must have based on the size and type of business you run.
Do California contractors need to be bonded?
Along with showing proof of business insurance, California contractors must also be bonded. All licensed contractors must file a surety bond or cashiers check with the CSLB. The value of bond you are required to file will depend on your business structure. Check the CSLB website for up-to-date information on bond requirements.
How do I prove I am licensed?
Once you are licensed and meet the licensing requirements, you can work as a general contractor or specialty contractor in California. You will receive a wall certificate and a plastic pocket-sized license from the CSLB that provide proof of your general contractor license.
You are required by state law to display your wall certificate in your office or principal place of business. You are also required by law to provide proof of licensing when asked. The CSLB encourages contractors to always carry their pocket license, as customers could ask to see your license at any time.
Getting California Contractors to Work
Obtaining a contractor license in California is often the first step towards starting your own small business in the Golden State. Carefully following the general contractor license requirements can help ensure that you operate legally. Whether you’re a carpenter, electrician, painter, or provide other specialty services, a contractor license helps prove that you are a skilled professional and builds trust with potential clients and customers.
Ready to protect your small business? Learn more about insurance for general contractors from BizInsure.