Is it Illegal to Hire an Unlicensed Contractor in California?

Hiring a contractor to do work on your home in California? Or maybe you’re engaging a subcontractor as a general contractor?

In either case, you may wonder whether it’s illegal to hire an unlicensed contractor to perform the work you need done.

You probably know by now that it’s illegal in the state of California to do construction work without a contractor’s license – but is it illegal to hire an unlicensed contractor? Let’s find out.

What is a Contractor’s License?

A contractor’s license in California is a mandatory certification for construction professionals that legally ensures high construction standards for projects across the state.

The Contractor’s State Licensing Board or CSLB is the government body responsible for this entire process – ensuring that contractors meet the stringent construction standards that are necessary to deliver a good quality product that is safe and livable.

The CSLB is also responsible for ensuring enforcement of its licensing requirements, working with SWIFT to stop unlicensed contracting work. They then work with the court system to punish anyone who falls afoul of the regulatory guidelines they’ve set forth.

License Requirement for Contractors

Contractors in California must be licensed to carry out most construction-related activities, but there are some exceptions.

In the state of California, a contractor’s license is required for any project involving construction, alteration, repair, or demolition where the combined value of labor and materials exceeds $500.

Any job that costs less than $500 does not require a contractor’s license.

How To Check If A Contractor Is Licensed

Checking a potential contractor’s license is extremely easy in 2024 – all you have to do is go to the CSLB’s website and use their License Checker Tool.

The CSLB will quickly deliver the information you need. It’ll instantaneously tell you if their license is valid, along with any additional pieces of information that could dictate whether you hire a contractor or not.

Do Contractors Have To Show Their License To Clients?

Are contractors legally required to show their licenses to prospective clients?

Believe it or not, no. California law does not explicitly require contractors to display their licenses before being hired.

However, though it’s not technically a legal requirement to show your license as a contractor, it is a de facto requirement. That is to say – anyone who is a licensed contractor in good standing with the CSLB usually shows proof of their license to potential clients.

Consequences of Hiring an Unlicensed Contractor

What are the risks and consequences of hiring an unlicensed contractor? It really depends on whether you are a contractor or whether you’re the person hiring a contractor.

As we’ve previously established, unlicensed contracting on jobs over $500 is illegal as a contractor, but hiring an unlicensed contractor is not. That’s not the whole story, though.

Legal Implications

For Contractors: Unlicensed contracting is a misdemeanor in California. A first conviction can result in imprisonment for up to six months and/or a fine of up to $5,000. Repeated offenses can lead to harsher penalties, including mandatory jail time and higher fines. You may even lose your license permanently.

For Homeowners: Homeowners face several risks in hiring unlicensed contractors. You could be held liable if an unlicensed contractor is injured on your property. Additionally, if the work fails to meet legal standards, homeowners might face fines and may be required to pay for corrective work.

Financial and Safety Risks

Unlicensed contractors in California cannot legally enforce contracts for licensed work, leaving you with no recourse if these unlicensed (and therefore, untrustworthy) contractors fail to deliver on their promises. Homeowners can sue the contractor for all payments made, but the contractor has no legal recourse​​​.

When hiring an unlicensed contractor, there is always a higher risk of substandard work. That’s the entire reason the CSLB contractor’s license exists – to protect homeowners from contractors who lack the scruples and/or ability to deliver on their promises.

This leads to not only health and safety issues with your home, but it can also be extremely costly to fix the issues that unlicensed contractors can leave behind.

Best Practices for Hiring Contractors

Conclusion

In California, hiring unlicensed contractors is not technically illegal, but the consequences of hiring an unlicensed contractor can far eclipse simple legal issues. Contractors and clients must adhere to licensing requirements to ensure safety, quality, and legal compliance.

The simplest thing you can do to protect yourself is to always, always, always verify your potential contractor on the CSLB’s website. If they don’t have a license – don’t hire them.