SWIFT Justice for Unlicensed Contractors, CSLB Update & Worker’s Comp Re-Certification

In a break from tradition, I believe for the first time, the Contractors State License Board (CSLB) held its quarterly meeting in the Sheet Metal Workers’ Assembly Hall in Fairfield, CA on June 18th.

According to David Kalb, founder and former owner of Capitol Services, this was a lively meeting lasting close to 5 hours.  The Registrar’s Report covered Procedures regarding the Board’s Interaction with Immigration and Customs Enforcement (ICE) and the CSLB Sunset Review Process.

A welcome report from the Statewide Investigative Fraud Team (SWIFT) on evening the playing field for licensed contractors. Not only did the Board Highlight a number of SWIFT “sting” operations around the State targeting unlicensed individuals, but also detailed how a variety of “bad actors” were put out of business.  In one case, a grand jury cracked down on 4 licensees who were involved in a “RMO for hire scheme”.

Some interesting facts emerged from the Licensing Division at this Board meeting.  1) There continues to be a significant rejection rate for Limited Liability Company (LLC) applications, primarily due to inconsistencies with the Secretary of State’s (SOS) records.  Unless the LLC application includes ALL Members and/or Managers as designated at the SOS, the application will be returned for corrections.

2) Contractors are required to recertify that they’re exempt from Worker’s Compensation as part of the license renewal process.  A number of forms are being rejected because the appropriate box is not being checked.  Regardless, one Board member expressed concern that some contractors are being less than truthful when certifying they’re in fact exempt from W/C.  His example involved concrete contractors who, if honestly exempt, are pouring and finishing their projects with NO employees.


3) The Board adopted a detailed “Table of Acceptable Supporting Experience Documentation” to be used as part of their application review and investigation process.


Several pending bills were discussed and subsequently supported by the Board during the Legislative Program Update.  Of note, SB 465 (Hill) which 1) extends the CSLB sunset date from Jan. 1, 2016 to Jan. 1, 2020; 2) eliminates the existing requirement that applicants demonstrate evidence of financial solvency by “possessing” operating capital of $2,500; and 3) Increases the amount of the contactor’s bond from $12,500 to $15,000.  The $2,500 requirement has been around for decades and it rarely, if ever, is required to be proven as part of the application/renewal process.  If passed and signed by the Governor, SB 561 (Monning) will amend the way in which Home Improvement Salespersons (HIS) can register making it more efficient for both the licensee and salesperson.  There was also a lengthy discussion on B&P Code Section 7031, which will be discussed in a future column.

As they do on a yearly basis, the CSLB held a second day of meetings (on June 19) in conjunction with the Nevada State Contractors Board.