Attorneys Providing Counsel for the Industry

Among those I assist in navigating the complex rules for contractors are attorneys providing counsel for the industry. Our first inquiry is such, and seeks to determine what might be called the baby bear standard in providing information on a corporate application. Thats not to little, not too much, but just right, especially with new rules on fingerprinting. Second, is a B question and answer. Finally, important notice from the Employment Development Department that every contractor needs to know

Q: It’s been a while since we last touched base. Our client is motivated to submit the application to the CSLB; however, they have one more question.

This is in reference to your attached email regarding an out-of-state corporation with 20+ officers. Does each of them have to be fingerprinted for the application? That seems like an onerous requirement for the larger contractors.

A: Foreign corporations are only required to list the President and qualifying individual. They do NOT need to list all 20 officers unless they want to. Domestic (i.e. California registered) companies need to list the President, Secretary and Treasurer on a contractors license application. While I very much agree that this is an onerous requirement for the larger contractors, everyone listed on the application WILL be required to be fingerprinted.

Q: Im a B contractor and plan on installing cabinets in a new home. This is likely the only trade Ill be handling and want to know if my B license will cover this?

A: A general building (B) contractor can legally take a prime contract or subcontract for framing, finish carpentry or cabinets even if this is the only trade youll be performing. General builder projects must contain 2 or more unrelated trades; however, this is an exception.

Q: I have a C-20 license but regularly handle electrical work as part of the installation process. Do my employees need to be registered with the Division of Apprenticeship Standards (DAS)?

A: Certification with DAS is required only for those persons who perform work as electricians for contractors licensed as C-10 electrical contractors. Certification is not required for persons performing work for contractors licensed as B, C-7 (low voltage systems), C-45 (electric sign) or C-20 (HVAC) contractors as long as the work performed is within the scope of that specific license classification. This includes incidental and supplemental work as defined in Section 7059 of the Business and Professions Code, and according to DAS is regardless of whether the same contractor is also licensed as a Class C-10 contractor.

The Employment Development Dept. (EDD) recently sent out a notice entitled Are you in Construction? Do you use subcontractors? It warns contractors that a misunderstanding about whether a worker is an employee can lead to unexpected tax liabilities.

Subcontractors and construction workers without valid contractor licenses are statutory employees of the contractor who either holds a license or is required to be licensed. If you are a contractor then anyone who works for you (other than someone from a temp service) is either an employee or licensed subcontractor there is no middle ground.

To be an independent contractor, subs and construction workers must possess a valid license for the specific work being performed. If they are not licensed then by definition, they are your employee and would be subject to income tax withholding, unemployment insurance, and workers compensation. For more information call EDD or your tax specialist.