DBA, Worker’s Comp Exemption

I’m not a doctor, nor do I play one on TV. However, you almost always want a second opinion when a medical question arises. That policy is also a wise course when dealing with the complexities of law and regulations contractors must ‘survive’ to keep their business ‘alive’. A new rule may put more reach into the long arm of contracting law…

Q: I applied for a second contractor’s license a few years ago as a ‘dba’. I had one license for my corporation (I’ll call it XYZ Plumbing Inc.). The second license was issued as XYZ Plumbing Inc. ‘dba’ Jones Plumbing Service. I just purchased another local plumbing company and want to retain the business name. Therefore, I’m interested in applying for another ‘dba’; but was told by the CSLB that I couldn’t. In fact, the person I spoke with on the phone told me I should never have been given my ‘dba’ license two years ago. Can they go back years later and take my license? Do you think I’ll have any problems when I file my new application? I read your column every week and would like your opinion. Thank you.

A: Don’t worry; based on what you describe, the Contractors Board cannot ‘terminate’ your license, since there is no limit to the number of ‘dba’s’ you can have under one corporation. Likewise, you should have no problem securing this new license. If you do, give me a call. A second opinion is always a worthwhile choice.

I’m aware of one company that purchased 5 different businesses over a several year period and the corporation became licensed and operated as a different dba for each one of them. Like you, the buyer wanted to retain the good will and name recognition built up over the years by the seller. While not part of your question, it is also advisable to file as a fictitious business name (FBN) with your local city or county government.

Q: I don’t have a contractor’s license and don’t believe I need one for the work I handle. All of my contracts are under $500 and when they go over that amount, I only charge time and materials and have the homeowner act as the owner builder. He will hire my crew and me and take out all permits, so why should I need a license? Do you agree?

A: No I do not agree. On the contrary, I believe you should be licensed for those jobs $500 and above. Switching to “time and materials” in no way lessens the need for a contractors license and designating the homeowner as “owner-builder” to evade applying for a license is asking for trouble. I seriously doubt each of these homeowners hires you “and your crew” as employees and withholds taxes, pays your Social Security and covers you and the homeowner for on the job injury through Worker’s Compensation.

A bill in the State legislature is being strongly supported by the CSLB. If passed and signed by the Governor, SB 1254 (Leno) would put some teeth behind the State’s efforts to require Contractors with employees to carry Workers’ Compensation Insurance coverage. Contractors’ License Law requires every licensed contractor to have on file at all times with the CSLB a current and valid Certificate of Workers’ Compensation Insurance; a Certification of Self-Insurance, or a statement certifying that he or she has NO employees.

This bill would authorize the Registrar of Contractors to issue a stop order, effective immediately upon service, to any licensed or unlicensed contractor who has failed to properly secure Workers’ compensation coverage for his or her employees. The bill would also authorize the Director of Consumer Affairs to designate 12 persons as Peace Officers (up from the current 3) for assignment to the Special Investigations unit of the Board.

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