How To Become a Licensed Contractor in California
In order to obtain your license from the California Contractor State License Board (CSLB) you’ll need to complete the following 5 steps: identify the type of work you will be doing, submit your application, pay some fees, pass a few exams, and, finally, obtain any required surety bonds. In this article, we will walk you through the process of becoming a licensed California contractor, as well as specifics about contractor license surety bonds in the state
What is a California contractor license?
California defines a contractor as any business or individual who constructs or alters any building, highway, road, parking facility, railroad, excavation, or other structure. Anyone engaged in activities in California that meet this definition are required, by law, to get a contractor license. Contractors can apply for their license through the Contractors State License Board (CSLB).
Why do you need a license to be a contractor in California?
There are many reasons why California requires contractors to have a license, but the most important one is consumer protection. By ensuring that all contractors are licensed, bonded, and insured, the state protects consumers from fraud and subpar workmanship. In addition, the licensing process helps to guarantee that contractors are familiar with building codes and other relevant regulations.
The California Contractors State License Board (CSLB) is the agency that regulates the construction industry throughout the state. Established in 1929, the 15-member Board receives and processes applications for new and renewal contractor licenses, maintains records of disciplinary actions, investigates consumer complaints, and, if necessary, provides information about the status of a contractor’s license (including certificates of licensure) for use in court or other legal actions.
How to become a licensed contractor in California
If you’re looking to become a licensed contractor in California, there are several steps you will need to take. Below, we take a closer look at each step in the licensing process.
Meet the basic licensing requirements
First, anyone applying for a license must meet the basic California contractors license requirements. You must:
- Be 18 years of age or older,
- Have either a Social Security number or individual taxpayer identification number, and
- Have the experience and skills necessary to manage the daily activities of a construction business, including field supervision, or be represented by someone (a “qualifying individual”) with the necessary experience and skills.
In most cases, you will need at least four years of journey-level experience, although credit may be given for job experience at different levels of responsibility (journeyman, foreman, etc.) as long as all of the experience is related to the particular classification for which you are applying.
Currently, there are no educational requirements to qualify for either a specialty or general contractor license in California. However, if you have a degree, you might be able to substitute it for some of the required experience, as long as you have at least one year of practical experience in your chosen classification.
Identify your license class
The CSLB issues licenses in specific trades or fields of construction. Each trade is recognized as a “classification.” To obtain a California contractor license, you must identify which license class you are applying for. You may add as many classifications to your license as you like, as long as you meet the basic requirements for each one.
There are three main classifications of construction trades:
- Class A: General Engineering,
- Class B: General Building, and
- Class C: Specialty.
Within the Class C: Specialty designation, there are 42 separate trade classifications ranging from asbestos abatement (C-22) to welding (C-60). Other trade classifications common in California include swimming pool contractors (C-53) and roofing contractors (C-39).
Submit your application and pay the necessary fees
The next step is to fill out an official CSLB contractor license application and pay any related fees. On the application, you must provide your personal and business contact information, as well as the information of anyone else who will be listed on the license with you. You will need to answer several required application questions and provide proof of your qualifying experience and/or education or training.
As part of your application, you will also need to submit any applicable fees (discussed below) and a full set of fingerprints. The CSLB requires all contractor license applicants to undergo a criminal background check before issuing any license.
Pass any examination requirements
California also requires contractor license applicants to pass a series of exams. To qualify for a license, you must pass both a law and a business exam, in addition to your specific trade exam. The one exception to the trade exam is if you are applying for a Limited Specialty license (C-61).
After submitting your application, the CSLB will send you a Notice to Appear for Examination and a study guide. Most notices are sent at least three weeks before the exam date. Testing sites are located throughout the state, and you will be assigned the one closest to your home zip code.
Obtain any required surety bonds
One of the last steps to becoming a licensed contractor in California is obtaining a contractor license surety bond. A surety bond is a three-party agreement between the principal (the contractor), the obligee (the entity requiring the bond, in this case, the CSLB), and the surety company that guarantees the bond. In basic terms, a surety bond will help cover any client damages or losses (up to the bond amount) that result from a contractor’s negligence or other failures to uphold the terms of a contract. The principal is financially responsible for reimbursing the surety company for any valid claims paid out, plus additional expenses incurred by the surety.
The three main types of California contractor license bonds are:
$15,000 contractor license bond
In most cases, contractors in California need a $15,000 contractor license bond. This includes pool and roofing contractors; however, such contractors have different bond application requirements (see below).
To obtain your California contractors bond, you may be glad to hear that you do not need to pay the full $15,000. Instead, the cost of your bond will depend on several factors, including your credit score. Applicants with standard credit and plenty of experience in the industry could receive a premium as low as $102 a year. You can fill out this short application to get your quote.
$15,000 pool and roofing contractor license bond
While swimming pool and roofing contractors still need the standard $15,000 contractor license bond, the underwriting parameters surety companies use with pool and roofing contractors are more strict than for other trades. This is due to the large number of claims made on swimming pool and roofing contractor bonds compared to other classes of licensed contractors. As such, swimming pool and roofing contractor bonds tend to have higher premiums. Apply here to get a quote for your pool and roofing contractor bond.
$100,000 LLC Employee/Worker Bond
If you plan to operate as an LLC, you have further bonding requirements. The CSLB requires contractors applying for licensure as an LLC to obtain both the $15,000 contractor license bond and an additional $100,000 LLC Employee/Worker Bond. Premiums for this surety bond are based on your company’s financials and the managing member’s credit information. If both are strong, the premium for your LLC Employee/Worker Bond could be as low as 1% of the bond amount. You can learn more or apply for this bond here.
How much does a contractor license cost in California?
There are several costs associated with obtaining a contractor license in California. The first is a set of fees charged by the CSLB. The amount due depends on whether you apply as a sole or non-sole owner.
As of September 2021, the fee schedule to apply for a California contractor license is:
- Single classification: $450
- Initial license fee (sole owner): $200 (paid after exams)
- Initial license fee (non-sole owner): $350 (paid after exams)
- Total fees required (sole owner): $650
- Total fees required (non-sole owner): $800
These fees are generally non-refundable, even if your application gets denied.
Other costs associated with getting your license in California include that of your surety bond(s), which will vary depending on your business organization, credit score, bond type, and the bond amount that your trade classification requires. The cost of some California contractor license bonds may start in the low hundreds, while others (like those for swimming pool and roofing contractors and LLCs) will be higher. If you have more questions about the bonding process, contact our surety experts at 949-361-1692.
- In California, anyone engaged in construction activities earning more than $500 per contract is required, by law, to get a California contractor license.
- To qualify for a contractor license in California, you must first meet the basic licensing requirements, identify your license class, submit an application and required fees, pass an exam, and obtain a California contractors bond.
- The initial cost of a California contractor license is $650 for sole owners and $800 for non-sole owners.
- In addition, most licensed contractors in California need a $15,000 contractor license bond. Premiums can start at about $102 per year for applicants with standard credit.
- California contractor license bonds usually cost more for swimming pool and roofing contractors and LLCs.