Getting Licensed in California
The Contractors State License Board (CSLB) regulates who can work as a contractor in California. Whether you're starting fresh or moving your operation from another state, you need to understand the process before taking on your first California job.
Who Actually Needs a License
If the combined labor and materials for a construction project exceed $500 (including labor), you need a California contractor's license. This applies to general contractors, specialty trades like electrical and plumbing, subcontractors, pool builders, and landscaping companies doing hardscape work.
The $500 threshold is per project, not annual. A handyman doing odd jobs under that amount can operate without a license, but the moment a single job crosses the line, they're violating state law.
License Classifications
California offers more than 40 classifications. The three main categories are Class A for general engineering work like highways and utilities, Class B for general building work on residential and commercial structures, and Class C for specialty trades.
Most contractors fall into the specialty categories. Each one has specific experience requirements and examination components.
What the Application Requires
Proving Your Experience
You need four years of journey-level experience in your trade. The Board wants documented work history with employer verification letters confirming the dates and nature of your work.
A common mistake is assuming related experience counts fully. It doesn't. Four years as a general laborer won't qualify you for an electrical license. The experience must be directly relevant to the classification you're seeking.
Financial Requirements
Your required net worth depends on the monetary limit you want on your license. A contractor seeking a $50,000 limit has minimal financial requirements. Someone wanting an unlimited license needs to demonstrate substantial financial capacity through audited statements.
Passing the Exams
You'll take two exams. The trade-specific technical exam tests your actual knowledge of your craft. The law and business exam covers California contractor regulations, contract law, and business fundamentals. Both require a passing score.
Study materials are available, and test prep courses can help. First-time pass rates vary by classification, but most prepared applicants succeed.
Insurance and Bonding
Before your license issues, you need your $25,000 license bond in place.
Workers' compensation is mandatory if you have employees. General liability isn't required by the CSLB, but you'll find it nearly impossible to get work without it.
Maintaining Your License
Annual Renewal
Licenses expire annually on the last day of your anniversary month. Renewal fees depend on your classifications. Missing your renewal deadline leads to expired status and potential disciplinary action.
Keeping Insurance Current
Your bond must remain continuous. Insurance certificates need updating when policies renew. Report any changes to the Board within 30 days. A lapse in coverage can suspend your license.
Mistakes That Get Contractors in Trouble
Working without a license carries fines, potential criminal charges, and the inability to collect payment for work performed. California takes this seriously.
Exceeding your monetary limit is another common violation. If your license allows jobs up to $150,000 and you take on a $175,000 project, you're operating illegally.
Operating outside your classification happens more than it should. A painting contractor who starts doing drywall repair without the proper C-4 classification is violating their license terms.
Common Questions
How long does licensing take?
From complete application to issued license typically runs four to eight weeks. Incomplete applications take longer.
Can I work while my application is pending?
No. You must wait for your license to officially issue before performing any licensable work.
Do I need separate licenses for different cities?
No. Your California license is valid statewide. Los Angeles, San Diego, Orange County, and everywhere else in the state are covered under one license.