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8 Comments

  1. You state that one will need disability insurance if one has employees. What you mean to say is worker’s comp insurancel.

  2. Thanks. You are correct. We have updated the article.

  3. That’s a great article. Being a handyman has it’s advantages but it is difficult given the threshold the CSLB has set. I find it ironic that a handyman is considered a jack-of-all trades where no license classification is defined and while doing business over 500.00, a General “B” license is required (or suitable classification, more on this in bit).

    In construction, the General “B” is the prime contractor who is the main responsible party to oversee the job from inception to completion. He communicates with the architects and engineers, he judges “workman-like manner” to specialty tradesmen on jobs ranging from a small single story residential projects to large commercial environments. He is “the man” on the job and must know local municipality concerns, codes and federal building requirements while a handyman needs the equivalent licensing to make five hundred and one dollar (or now more appropriately, “value” as determined apparently by the CSLB) repairing a redwood fence and painting a room for Ms. Jones. To put this in terms of job scale and equalized ability for which a license is required, the handyman would need a general “b” license to repair 16 feet of redwood fence because 3 posts and pickets is nearly 300 in material alone and painting a bedroom just takes time. I hardly see the equivalent. Technically, a handyman who does have a general “B” license can now build a school? In my opinion the cap should be raised. Federal minimum wage is nearing 9.00 per hour and materials are not getting any cheaper .

    I am a licensed specialty contractor. I intend to get my general “B” so I don’t have to pussy-foot around my time and materials on “non-licensed activity” such as; pouring a slab of concrete with a custom made redwood chair sitting on top or even maintaining a pool while installing a sprinkler line and cleaning up construction debris, all of which require a different license. It always puzzles me how material costs are included in the threshold of a mans experience. Lets be honest, placing a monetary value on what a man can and can’t do without a license and including a costly inanimate object into the equation, is insulting to a qualified person. If Ms. Jones bought a 500 dollar refrigerator, I suppose she would have to deliver it herself? Damn that refrigerator, who made him the deal breaker? Would the CSLB VALUE the refrigerator at what Ms. Jones paid or what it cost the retail store to buy it first?

    Clearly, the only way to keep the CSLB off your back is to get a General “B” License. I just hope my kid doesn’t go to a school that awarded the prime contract to a handyman, there is a difference.

  4. Comparison of Examples in Article by David Parikh

    Article Title: What? You really need a Contractors License?

    The distinction between the handyman example and the gardener example does not appear to be sufficiently clear to clarify the question of whether a contractor’s license is required. In the gardener example, the gardener is hired for $50 per month presumably to perform some agreed tasks. Accordingly, the value of the agreed tasks could be valued to be in excess of $500 at the end of more than ten months. Related to the agreement or contract, it is both possible that the related discussion may have been for only the first month or that the discussion may have been for the long term. It is also possible that the contract could be for repeated monthly maintenance, for new landscaping, or for a combination of the two. (It may be possible to visualize or classify a new creation as a project as opposed to periodic maintenance.) Also, it appears possible that if the gardener continues to perform services on a monthly basis without establishing a new contract, that the value of the original contract could later be considered to be the accumulated value of all the work? It is also possible that the employer could dismiss the gardener at any time thereby limiting the total value of the services provided. And, it is also possible that the gardener could be hired for $499 per month and thereby technically not exceed the $500 threshold.

    Regarding the handyman example, suppose we simply hire the handyman in the same manner, at $50 per month. He would then be in the same type of contract as the gardener having the same possibilities as discussed above including similar contract discussions, accumulative value of the services, and possible mixes of maintenance and improvements. Accordingly, it would appear possible that one could find comparable situations in each of the two comparable trades.

    Next, suppose that we simply change the timeframe from a monthly rate to a weekly rate, or to a daily rate, or even to an hourly rate. The article and the examples do not present the rate or the time period on which the rate is based to be a distinction. Accordingly, it does not appear that the billing rate per unit time in itself results in any direct determination of whether a contact license is required. However, the billing rate per unit time does provide a work duration limit to a contract that is limited to $500, which may be reflected in the frequency of follow-on contracts and thereby raise the suspicion of segmenting a project to skirt the $500 limit.

    Regarding the original issue of whether a contractor’s license is required, the two examples do little to offer sufficient clarity and it appears that this issue hinges on the interpretation of what is considered a project for the purpose of making the end determination of a what is the “project value.” In the gardener example the accumulative result of eleven months work is not considered a single project, but yet in the handyman example the installation of tile, the installation of a new faucet, and painting each spaced a week apart is considered a single project if all were discussed or contracted together irrespective independent payments. Accordingly, it appears that the criteria for what constitutes a project is sufficiently unclear and appears to be different in the examples of the gardener and the handyman.

    • Greetings Bill,

      Thanks for your comment. It looks like you have really looked into the issue. The reason we wrote the article was that there was a lot of confusion about what jobs you could do as a business if you do not have a contractor’s license. I’m not an attorney, and California Law seems to get very complex. But people who want to sart a small business, or just have a weekend gig may not want to go through the hassle of getting a Contractors License. So I asked the State Board which enforces the law to explain the law.

      You are correct in that the answers given to my example were not sufficiently clear. I think that’s because the law–as it has been enforced–is not very clear. It all seems to depend on how each job or project is defined. If you hire your handyman to do a different job each month and pay him less than the limit, that would be okay. But the CSLB seems to look at each project; and they have rules about dividing the job up in segments. So as I understand it, it would not be legal for a handyman to come out and give you a bid on the job and give you a series of invoices. For instance, giving you an invoice for installing hardwood flooring on the right side of a room, and then and invoice for installing flooring on the left side of the room, and then and invoice for installing molding around the floor. But on the other hand, it would be legal to pay a handyman $700 in a year if the handyman installs flooring in your den for say $300; and then you decide that it would look good in your bedroom so you call him back and he agrees to do the job for $400.

      Apparently there is an exception for gardeners who work personal residences. It’s my understanding that unless the maintenance work is costs over $500 per visit, the CSLB lets each maintenance visit be defined as a separate job.

      In terms of you other question regarding hiring someone by the hour to do work, that opens up another can of worms. If you are paying them by the hour and directing their work, they might be considered your employee. Contractors will give you a price to do the whole job. There is nothing illegal about hiring or being hired an employee, but you need to be sure you have worker’s comp insurance, and you need to report their income with a 10-99 or W-2.

      And to bring in another level of complexity, it might be the case that the person doing the work is a not a contractor under state law but is a contractor under federal IRS law.

      I will see if I can ask the CSLB to for some clarifications.

      Agan, thanks for your comment.

      –Dave

    • Here’s a scenario that I haven’t been able to get a FOR SURE answer to. If i do work AS A roofer for a HVAC company in Calif only patching the composition shingles after a roof mounted AC unit is installed and the TOTAL COST OF MY LABOR AND MATERIALS COMBINED IS ALWAYS BELOW $500.00 per residence. DO I need to be Licensed?? We may do 5 or 6 differently owned residences per week but individually MY JOB IS ALWAYS UNDER $500.00 PER RESIDENCE.

      SO DO I NEED TO BE LICENSED (CURRENTLY STUDYING FOR IT REGARDLESS) AND IF NOT IS THERE ANY TYPE OF BOND THAT I CAN GET IN THE INTERIM BEFORE I GET MY LICENSE SO THESE CUSTOMERS CAN FEEL SOMEWHAT WARM AND FUZZY.??

    • I live in the mountains and property clearance for fire prevention is mandatory the deadline is the 2nd week of June. I perform weed abadement and brush removal for many homeowners. Some of my clients own several different properties and or lots. I charge $100 a lot. Each lot is considered a different property. Am I right in assuming that there is no such contractors lisc. available as long as I am not operating large equipment such as a bulldozer or escavator. I was a certified wildland firefighter no lisc. required to remove brush or any thing else for fire prevention.

  5. On a somewhat different side to this, in order to receive a C-27 license, a person needs to pass both of the written exams offered by the CSLB as well as 4+ years in verifiable work experience; working for a LICENSED company (with time reduction for certain college degrees in related fields), correct?

    So, for the proficient handyman types, artisans, and individuals out there who can pass the C-27 written exam, and want to take their “free-lancing/ hobby business” or craft that has developed over the years while working on side jobs (albeit probably ‘illegal’ projects, even though they were all up to code, since they went beyond the $500 value cap); but whom may or may not have gone to university in fields related to C-27 licensed industries, need to stop working for themselves and find a job working for someone (for multiple years) who already has a licensed company in order to get the work experience required by the CSLB? In addition to paying “bonding” of $12,000…and an additional $350 for license fees. I understand having procedures and making sure businesses are compliant with building codes, safety regulations, etc. but all of these hoops seem to deter new business..? Am I understanding this correctly?

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