New Regulations & Legislation for Contractors in 2013

If you are reading this now and are unlicensed, a resolution to become a licensed contractor is a good choice in 2013.  While most of us have been working to make (and keep!) New Year’s resolutions, the CSLB has been hard at work implementing new laws and regulations for contractors…


First, contractors should be aware that employee-reporting laws have been strengthened by the passage of Assembly Bill 1794.  The new law, which took effect January 1, 2013, authorizes the Employment Development Department (EDD) to share new-hire employee information with agencies in the state’s Joint Enforcement Strike Force on the Underground Economy (of which the CSLB is a member) and the State Compensation Insurance Fund.  This new practice of information sharing among state offices will ensure that employers are accurately reporting their employee payroll to their insurance carrier for establishing their Worker’s Compensation premium.


Contractors are currently required to carry adequate Worker’s Comp insurance for employees or submit an exemption or Certificate of Self-Insurance.  However, a CSLB study revealed that nearly half of licensed contractors either claim an exemption based on having no employees or maintain a minimum policy under which no employees are reported to their insurance carrier.


“This landmark legislation benefits consumers, contractors, and employees,” said CSLB Registrar Steve Sands.  “When employers properly report and insure employees, consumers are protected by Workers’ Compensation insurance coverage if an accident occurs on their property, businesses pay less in insurance premiums, and employees are eligible for unemployment insurance when they’re properly listed on the payroll.”

Next up, Assembly Bill 2237, sponsored by the CSLB, more clearly defines the term “consultant” as it relates to building and construction work.  The new law states that anyone who provides or oversees bids for construction, arranges for subcontractor work and schedules, and/or has oversight for a project is, in fact, acting in the capacity of a contractor and must be state-licensed.  In California, a state contractor license is required for any project that is $500 or more in combined labor and material costs.

Another CSLB-sponsored bill strengthens enforcement authority over contractors who violate state contracting laws.  AB 2554 amends Business and Professions Code sections 7011.4 and 7106.5 to enable the CSLB Enforcement division and its representatives to issue notices to appear in court related to disciplinary actions against a license.

Several other laws affecting consumers, contractors, and the construction industry took effect as the new calendar arrived:

AB 2219 indefinitely extends the requirement that all C-39 Roofing contractors obtain workers’ compensation insurance coverage, even if they certify that they have no employees.  The bill also extends, indefinitely, the requirement that insurers conduct annual audits, and requires that these audits be conducted in person to verify the accuracy of the reported number of employees.

AB 2114 enacts new construction permit requirements for swimming pools, spas, or public wading pools.

AB 2339 requires state regulators and those involved in the heat pump and geothermal heating and cooling industries to evaluate policies and develop infrastructure for wider use of these technologies.

SB 1576 allows the CSLB to take administrative action if a licensee files a false complaint again another licensee.

For a complete list of the new and revised laws affecting State Contracting Practices, please visit our website at or call with any questions.