Electrical Contractor Alert & RME/RMO

In competition winning is what it’s all about. Winning the race or winning the contract bid. For many contractors, just getting ‘qualified’ to compete comes with a host of questions. We begin with important news for specialty contractors ‘wired’ into electrical work…

Electrical Contractor’s Alert: Specialty contractor’s that perform electrical work need to be aware that AB 2523 (Eng) would amend the law related to the electrician certification. According to a recent Legislative analysis, as it currently exists, the electrician certification program administered by the Division of Apprenticeship Standards ONLY pertains to “electricians” who are working for “C-10” Electrical contractors. This bill, if passed, would expand the applicability of the electrician certification requirements to include nearly all specialty contractors (licensed under B&P Code Section 7058) that “engage in the connection of electrical devices.” In other words, a “C-20” (HVAC), “C-38” (Refrigeration), “C-46” (Solar) or other “C” contractors that do any electrical work would also need to have their employees certified under this revised Labor Code.

Since the new language limits it to Section 7058 licenses, this would not include “A” General Engineering or “B” General Building contractors. The existing exemption for “C-7” Low Voltage, “C-45” Electrical Sign, and the qualifying individual for “C-10” (Electrical) contractors would also be retained. What is unclear is whether the qualifiers for the “C-20”, “C-46”, “C- 38” and other specialty contractors would be exempt. The bill has passed the Assembly and is due to be heard in a Senate Committee.

Q: I am considering going to work for a company as their Responsible Managing Employee or RME. My question is: By accepting this position could I possibly be responsible for any unpaid wages or debts of the company? I will not be an officer, director, stockholder, or signatory on a payroll or checking account. The only information I currently have is that I would not be responsible for unpaid wages under any conditions. Your assistance in this matter would be greatly appreciated.

A: To the best of my knowledge, a RME would not be responsible for unpaid wages or company debts. However, your email uses the word “possibly”. While highly unlikely, if there is a legal action against the company for which you are the Qualifier, a court could “possibly” find you responsible for some sort of debt. I am familiar with a recent court case whereby nearly three hundred companies AND individuals were named as defendants.

I would suggest contacting an attorney to discuss this situation and whether a ‘hold-harmless’ agreement makes sense.

Q: I have three questions regarding our application for Original Contractor’s license. 1.) One of our officers, an assistant secretary, will become our Qualifier. It seems to me that it would be better if he were a Responsible Managing Officer (RMO) and not an RME. That way, we stay away from the 80% time rule. Is there any reason NOT to use him as an RMO? 2.) Besides the bond for the company itself, please confirm that an RMO does NOT need a bond but an RME does? 3.) Does CSLB put it’s required bond form and amount online?

A: By definition, an “assistant secretary” is a Responsible Managing Officer (RMO). A $12,500 Bond of Qualifying Individual is required if the RMO owns less than 10% of the corporation and is always required for a RME. You can order these bond forms online from the Contractors Board; but they are not available to download. For your information and a courtesy for a reader, I have emailed both forms in an attachment so you can pass them on to your bonding company.

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