Replacing the RMO; California contractor licensing

Alphabet soup has fewer letters than the classifications for contractor licenses. While some of those ‘letters’ are fixed in purpose, others give a licensee some leeway in handing similar trade work. Another contractor gives us reason to review why public agencies can ignore the ‘alphabet’. Our final task is to help a corporate licensee figure out how to replace his current RMO…

Q: Can a Contractor with a “C-2” license legally perform suspended acoustical (t-bar) ceiling work in California? If so, what is the purpose of the “D-50” license? Thanks for your time.

A: This is a good question. Since the definition of a “C-2” includes “any insulating media and preformed architectural materials for the purpose of temperature and/or sound control”, my opinion is the “C-2” could properly perform this work. “C-61” classifications are generally for contractors who are interested in performing (or only qualified for) a limited trade or craft — sometimes one that is included in a broader classification. One example is the “C-61″/”D-50” (suspended ceilings) category. Several other examples of “D” categories follow.

The Board has a “C-33” Painting and Decoration class, yet they also license a “C-61″/”D-29” (paperhanging). The “C-6” is for all forms of Concrete yet there is a “D-06” for “concrete related services” (includes cutting, sawing and restoration). The Board licenses “C-28” (lock and security equipment) contractors and also issues a “D-28” that similarly covers ‘doors, locks and activating devices’. The “C-12” (earthwork and paving) and general “A” can perform all types of earthwork, but for those interested in trenching only, look to the “C-61″/”D-56”.

Q: I will be a prime bidder on a project, which involves hiring 3 to 4 subcontractors. It was my understanding that any contractor bidding on a public project in California involving 3 or more trades would be required by the CSLB to have an “A” or “B” contractor’s license. That being said, at your convenience please look at the attachment referencing the acceptable licensing arrangements for this project and let me know if this is acceptable to the Contractors Board.

A: I cannot say whether the required classifications are acceptable because the information you provided does not describe what the project involves. Regardless, in reviewing the attachment, the awarding authority is clear they want an “A” on the job. Keep in mind that according to B&P Code Section 7059b, public agencies have the final say on which classification(s) they will accept even though these may NOT be acceptable to the CSLB.

This being said, there is no requirement that public works bidders have an “A” or “B” if the job involves three or more trades.

Q: How does one go about changing the Responsible Managing Officer (RMO)? Does the new RMO have to pass a CSLB test, or is it just a matter of submitting an application to make the change? What is your opinion on securing a waiver for one of our officers?

A: Changing the RMO on a contractor’s license may involve testing or the new qualifier may be eligible for a waiver of the exams. Either way, the company will be required to file an Application For Replacing the Qualifying Individual. The “waiver” vs. “testing” is dependent on how long the company has been licensed; how many years the new qualifier has been employed with the company and the new RMO or RME’s experience qualifications. In your case, since your license is over 20 years old, a waiver for one of your three listed officers is likely.

A, B, C, D California Contractors Licensing

It’s been said, that when a company can’t give a raise they often give you a title. Which corporate title makes it easier to become a Responsible Managing Officer? What California license gives a contractor the ability to do some, all or none of the work? Another contractor will be ‘decked’ by the answer to his question…

Q: I am interested in getting a “C-10” license to further my business and have a friend with an “A” license. Can he certify that I’ve worked for his company for 4 years as their electrician or does an electrical license holder have to certify me? Doesn’t an “A” license mean you have the qualifications for all licenses under you?

A: The CSLB may prefer to have a certifier that holds the classification the applicant is applying for; however, this is not a requirement. If an “A” contractor has direct knowledge of your background, this should be acceptable to the Board. This being said, while the “A” is considered the best grade in school and is the first letter of the alphabet, it does not dominate all other trades. For instance, except on rare occasions, an “A” does not have the authority to frame a house (“C-5” or “B”) or pour a commercial foundation (“C-8”) or handle residential painting (“C-33”). General Engineering contractors also may not drill water wells (“C-57”) or install Fire Sprinklers (“C-16”)

Q: Does a RMO need to own any of the company to become the qualifier? Are any corporate titles better than others as far as the CSLB is concerned?

A: NO there is no requirement that the Responsible Managing Officer own any stock in the company. The CSLB does not care what title the RMO has. Who serves as President, Secretary, Treasurer, etc. is up to the corporation.

Q: I will be bidding a public works project in a few weeks and would like to know if in addition to my “B”, I’ll need the specialty classes required for the project? For instance, the job will include finish carpentry, plumbing, some electrical work and a new AC system as well as drywall, plastering and painting. I plan on self-performing some of the work and using sub-contractors for the rest. Will my general building license be enough?

A: Thank you for your email. “B” contractors have the option of self-performing all, some or none of the project work. You can handle all trades with your employees; split the work between your employees and licensed sub contractors or sub out all trades. As you likely know, it is very important, when bidding public works, to list all licensed subcontractors you intend on using. If you don’t, this implies you intend on self-performing the specific trade. As an aside to your question, I just received a call asking if a “B” could take a job with only one trade if he intends on using an appropriately licensed sub-contractor. The answer is YES.

Q: I will be filing a waiver application for a license I already hold. Should I wait to obtain a “C-61″/”D41”– and possibly other classifications –or can this be done with the same application?

A: You can apply for the Siding and Decking “D-41” (or any other “D” class) on the same application because no exam is required (however, a certification of work experience will be necessary). Since testing would be needed for any other class, it would require a separate application for additional class once the license number is issued.

RMO, RME and Corporate Contractors Licensing

You can assume something, or jump to a conclusion. In most cases, you’re going to find that you have ‘leaped before you looked’. I help people look ahead of their leap into contractor’s licensing. For others, who’ve already jumped in, I’ll help smooth the way to better understanding of how and when their license needs attention. From sole proprietors to corporate mega-firms, they all need a license number from the CSLB to do business in California…

Q: I need to obtain a “C-7” Low Voltage License. From reading your column, I know the CSLB does not issue licenses to an LLC. However, since I am the only member, would it be possible to apply for the license as an individual and not through the LLC? If so, how would I complete the first section when it asks for the company information? Is it possible to apply only as an individual?

A: Yes, you are correct in the assumption. Applying as a sole proprietor would appear to be your best course of action. When you refer to completing the “first section”, I assume you mean the business name on the application. This can simply be your name or a fictitious business name (but not the LLC).

Q: Hello. We have a corporate “C-10” license that you helped us with. If our Responsible Managing Officer (RMO) leaves our company, either at his will or after he is terminated, are we able to maintain the license or does he take it with him?

A: The license was issued to your corporation, not your RMO as an individual. Therefore, when he leaves – for any reason – the number stays with your company (i.e. he cannot take it with him). You’ll have 90 days to replace him to avoid a suspension.

Q: First, thanks for taking my question. We have recently formed an “S” Corp. and had one of our employees who had a GC License and made him our Responsible Managing Employee (RME). Are there any requirements to how may hours that he is required to work?

A: Yes, the CSLB does have a requirement for Responsible Managing Employees (RME) regarding the number of hours they must work. You may recall on the license application you filed that one of the questions in Section #5 states “an RME must work at least 32 hours per week or 80% of the total operating hours per week.” This is required under Section 823 of the Board’s Rules and Regulations.

Q: I am interested in having someone in my corporation as an RME. What could I expect to pay per hour, and what is the minimum or maximum hours an RME must work in my corporation?

A: The State Contractors Board does not regulate employee pay or the maximum number of hours he or she may work. However, as indicated in the answer above, the CSLB does regulate the minimum number of hours Responsible Managing Employees must work.

CA, NV, AZ Contractor’s Licensing

When the California economy slows contractors begin seeking other opportunities, many times taking a look over state borders. In concert, I get calls regarding getting your license in Nevada, or in this case, Arizona. Everyone can learn from this question. Everybody, one more time, what can’t a Limited Liability Company obtain in California? Let me also introduce another member of our Contractor’s Board…

Q: My company has licenses in CA and NV. We’re looking to get licensed in AZ. Do you know anything about the overall process?

A: I have a very good idea of what paperwork is required by the AZ Registrar of Contractors. First, unlike many states, you take the exam prior to filing an application for licensure. If you have been licensed in CA or NV, 5 of the prior 7 years, AZ should grant a waiver of the trade exam. This is based on a reciprocal agreement among the 3 states.

The application package includes detailing your work background; providing a financial statement, posting a contractor’s bond; and listing your company Transaction Privilege Tax Number (TPT). You can secure the TPT by filing an application with the AZ Dept of Revenue and posting a Taxpayer bond. If applying as a corporation you must also register with the Sec. of States Office in Phoenix.

Q: What do we need to do in order to replace our Responsible Managing Employee (RME)? We hold three classifications and I was wondering if more than one person could become the new qualifier? Would testing be required?

A: You can choose to have more than one person qualify these license classifications. One person must be designated for each trade. If you have three separate individuals apply to replace the RME, the applications can be filed simultaneously. However, EACH qualifier will be required to pass the law (as well as their respective trade) exam. On the other hand, if you have one person qualify all three trades, he or she will only need to pass the law test once, but must take all three trade tests — one at a time.

Q: Can a sole proprietor, with an “A” license, do business in the state of California as an LLC?

A: Sorry, a licensee must conduct business under the type of entity and name style that is licensed by the CSLB. If you are a sole owner, this is how you should be registered with the Board. Regardless, you could not obtain a license as a LLC since the Contractors Board will not issue a license for this type of entity.

Know Your CSLB Members: Robert Lamb

Assembly Speaker Fabian Nunez appointed Robert Lamb to the Contractors Board in May 2006. Mr. Lamb is a certified plumber and pipefitter and has been a member of the United Association for more than 25 years. He was the Business Manager for the Plumbers and Steamfitters UA Local 582 in Santa Ana and was also a representative for the Southern California Pipe Trades District Council 16. Mr. Lamb has held a number of positions in the industry and has worked on a variety of construction projects.