Can a contractor work under someone else’s license in California? The short answer is yes. But it is subject to some restrictions under California law, and there’s a legal loophole. Fortunately, this article got you covered; you can find the best resources available in this article.


What Defines a Contractor?

According to Section 7026 of the Business and Professions Code (BPC), a contractor does the following activities:

  • Moves
  • Wrecks
  • Repairs
  • Improves
  • Constructs
  • Demolishes
  • Alters (add or subtract)

The contractor does the activities mentioned above to:

  • Roads
  • Projects
  • Buildings
  • Railroads
  • Highways
  • Excavations
  • Parking facilities
  • Development or improvement

A contractor can also help in the erection of scaffolding or other structures. They can also be responsible for the cleaning of grounds or other structures. The term is highly synonymous with the word “builder.” Additionally, the contractor also includes “subcontractor” and “specialty contractor.”

There are also terms like a licensed and unlicensed contractor that you need to know. 

A licensed contractor refers to an individual who:

  • Must be 18 years of age or older
  • Have the experience and skills necessary for a construction business
  • Have a Social Security number or individual taxpayer identification number
  • Passed the written law and trade exams (unless they meet the requirements for a waiver)

This contractor also falls under three classifications:

  1. Class A – jobs that fall under general engineering.
  2. Class B – jobs related to any structure created or being built.
  3. Class C – other contractors that entail the application of specialized building crafts or trades. For example, contractors working with elevators, swimming pools, and low voltage systems.

On the other hand, an unlicensed contractor is the opposite of a licensed one. Although they can be over 18 and have the necessary experience, they’re not licensed if they can’t pass the exams. If they do a bad job on a house or renovation project and are not licensed, you could end up getting sued in the California small claims court for up to $10,000.

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 or not the individual will perform any tasks requiring licensure.

For example, if an unlicensed contractor will only be doing administrative tasks, no additional permit would be required. Activities such as answering phones or filing paperwork do not require licensure from the Contractor State License Board (CSLB).

But if an individual wants to work under someone else’s license in California, it will be a whole different story. 

There are two possible loopholes for this scenario.

First, an individual can work under a qualifier. A qualifier meets licensure’s knowledge and experience requirements and passes a written examination. They can have up to two licenses as long as they are the Responsible Managing Employee (RME).

A qualifier can also be the owner, officer, or member of an LLC or partnership. The process is allowed as long as the qualifier directs and controls the applicant’s construction operations.

Another loophole is to become a statutory employee. They are individuals providing construction services to a contractor who either has a license or is required to have one.

What Is a Statutory Employee of a Contractor?

Certain conditions need to 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 specific requirements with their employer. There are many instances where a person becomes a statutory employee.

For example, a contractor with a valid California contractor’s license hires an out-of-state subcontractor. The subcontractor becomes the contractor’s statutory employee, lacking a valid California contractor’s license. 

Also, all the subcontractor’s employees are statutory employees of the contractor under Sections 621.5 and 13004.5 of the CUIC.

Penalties for Contracting Misdemeanor

Although qualifiers and statutory employees are allowed in California, some abuse the loophole. Many qualifiers allow home improvement or other contracting activities to use their license without having direct participation in such operations. Some only ask the workers for a monthly charge for using their licenses.

It has resulted in negligent, illegal, and fraudulent activities being carried out by companies.

In turn, the qualifier was unaware of the activity because they weren’t overseeing the job, as required.

A misdemeanor, as stated in BPC Section 7028, falls on either of the two conditions:

  1. An individual not licensed
  2. An individual performs actions while holding a suspended license

The first conviction is punished by a fine of not more than $5,000. A convicted individual can also be imprisoned in a county jail for no more than six months. In some instances, the law can punish them for both the said amount and imprisonment.

For the second conviction, there will be a fine of either of the following (whichever is greater):

  • $5,000
  • 20% of the contract price
  • 20% of the aggregate payments

Also, the individual shall be confined in a county jail for not less than 90 days. Lastly, the third conviction is punishable by a fine of not less than $5,000 or more than $10,000. Or 20 percent of the contract price and aggregate payments. 

It also includes imprisonment in a county jail for not 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 valid loopholes to make it happen. But you should be aware that working as an unlicensed contractor in the state of California is unlawful. 

Always mind what you do so you will not be penalized for contracting a misdemeanor.

Editorial Contributors
Matt Greenfield

Matt Greenfield

Matt Greenfield is an experienced writer specializing in home improvement topics. He has a passion for educating and empowering homeowners to make informed decisions about their properties. Matt's writing focuses on a range of topics, including windows, flooring, HVAC, and construction materials. With a background in construction and home renovation, Matt is well-versed in the latest trends and techniques in the industry. His articles offer practical advice and expert insights that help readers tackle their home improvement projects with confidence. Whether you're a DIY enthusiast or a seasoned professional, Matt's writing is sure to provide valuable guidance and inspiration.

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