How to Become a Contractor in California

  • Posted by Melanie Klag
    How to Become a Contractor in California

    The construction industry in California employs nearly 900,000 workers and continues to grow as the state tackles housing shortages, wildfire recovery, and infrastructure upgrades. According to the Bureau of Labor Statistics, employment for construction managers is projected to grow 5% between 2022 and 2032, faster than the average for most industries, opening up many opportunities in the field. 

    What does that mean for you? Licensed California contractors are in demand. Whether your goal is to build residential homes, work in commercial spaces, or manage large-scale infrastructure projects, contractor licensing opens the door to projects that unlicensed workers can’t legally touch. 

    To start bidding on projects and/or managing construction work in California valued at more than $500 in materials and labor costs, you must obtain a contractor license. 

    Licensing also helps ensure quality and safety across the industry while building credibility and trust with clients. Finally, earning your contracting license is the first step towards growing your business as it allows you to pull permits and advertise your services. The following guide provides step-by-step instructions for California contractor licensure starting with eligibility checks through the Contractors State License Board (CSLB) licensing process. 

    Basic Requirements to Become a California Contractor 

    California happens to be one of the more difficult states to earn a contractor license in because of both its high requirements when it comes to experience, dual exam mandates, and tighter regulatory oversight. 

    Criteria 

    California 

    Experience Required 

    4 years documented journeyman/supervisory experience 

    Exams Required 

    Law & Business and Trade Exam 

    Bonding Requirements 

    $25,000 bond; LLC applicants also need a $100,000 employee bond  

    Insurance 

    Workers’ comp (if employees); LLCs also require a $1,000,000 general liability policy 

    Application & Fees 

    $600+ (application and license fees) 

    Renewal Cycle 

    Every 2 years 

    Oversight Body 

    Contractor State License Board 

     


    Formal education is not required to obtain a contracting license in California, but the state does have some basic requirements.  

    All applicants must: 

    • Be at least 18 years old
    • Have a valid Social Security number or an Individual Taxpayer Identification Number (ITIN)
    • Have the capacity to operate a construction business or be represented by another person with such skills who can serve as a qualifying individual.
    • Have at least four years of experience (within the past 10 years) as a journeyperson, foreperson, supervising employee, or contractor
      • This experience may include:
        • Apprenticeship programs: Learn on the job from experienced professionals.
        • Technical or vocational training: Construction-related programs at community colleges and trade schools throughout California can be used as part of your experience requirement. 
        • Military training If your military service experience matches your license application requirements, it may be accepted by the CSLB.

    Steps to Obtain Your Contractor License in California  

    Once you confirm your eligibility,  the following steps detail how to become a contractor in California. 

    Submit Your Application 

    The CSLB requires all interested parties to fill out their Application for Original Contractor License, which includes information about work history and license type selection and payment of licensing costs. 

    To complete your application, you will also need to download the Certification of Work Experience form from the CSLB website. The form requires verification of your work experience through employer statements and supervisor endorsements and other professional references who can confirm your employment history.  

    Additionally, when you submit your application, it must include the following: 

    • Application Fee: $450 for the original application for one classification.
    • Initial License Fee:
      • $200 for a sole owner
      • $350 for a non-sole owner (e.g., a partnership or corporation) 

    Pass the Licensing Exams 

    To earn your license, you’ll need to pass two separate tests.  

    Law and Business Exam 

    The Law and Business Exam tests candidates on contracting business management, which includes contract law, financial management, and employment laws.  

    Exam details: 

    • 115 multiple-choice questions
    • 2.5-hour time limit
    • Minimum passing score of 72%
    • The test is divided into sections (approximate percentage of the test in parentheses):
      • Business Organization and Licensing (13%) 
      • Business Finances (15%) 
      • Employment Requirements (20%)
      • Insurance and Liens (12%)  
      • Contract Requirements and Execution (21%)  
      • Public Works (5%)
      • Safety (14%) 

    Trade Exam 

    The Trade Exam tests your knowledge in the specific trade classification you selected (such as general building contractor, plumbing license, electrical license, etc.). 

    The CSLB offers study guides for all license types as each trade exam is specific to the license you choose.  

    Contractor classifications in California: 

    • General Engineering
    • General Building (B)
    • Residential Remodeling (B-2)
    • Specialty Contractors
      • (C-7) Low-Voltage Systems
      • (C-9) Drywall
      • (C-10) Electrical
      • (C-20) Heating, Ventilation and Air-Conditioning (HVAC)
      • (C-36) Plumbing
      • (C-39) Roofing
      • (C-53) Swimming Pool 

    Undergo a Background Check 

    You need to undergo a background check, including fingerprinting as part of the process. Once they accept your application, CSLB will send you a Request for Live Scan Service form with instructions. It will include locations to get your fingerprints taken as well as the cost to do so.  

    You will need to complete that form and take three copies of it to a Live Scan station to have your fingerprints processed and submitted to the Department of Justice and Federal Bureau of Investigations. 

    Submit Insurance and Bonding Information 

    You need to purchase a $25,000 contractor license surety bond or cashier's check with CSLB before you can receive your license. LLC applicants must also submit their employee bond and general liability policy to CSLB. Bonds can be obtained from one of these surety companies. 

    Receive Your License 

    After your application is reviewed and approved by the CSLB, you will receive your license. This enables you to start operating as a contractor throughout the state of California.  

    Bear in mind that while other states vary in their renewal cycles (Nevada contractors are required to renew every year, for example), California has a 2-year renewal period. You will need to pay renewal fees and update any relevant documentation to keep your license current.  

    Job Outlook and Opportunities in California 

    The demand for California contractors shows no signs of decreasing in the near future. Several factors drive the ongoing demand for contractors in the state. 

    • The state predicts it must construct more than 2.5 million new homes by 2030 to fulfill current housing requirements.
    • The state needs to rebuild its infrastructure because wildfires and earthquakes keep causing destruction that requires ongoing reconstruction efforts.
    • The state and federal governments invest substantial funds into building new highways and public transportation systems and renewable energy infrastructure.  

    The current market provides licensed contractors with ongoing business prospects and attractive compensation rates. Construction managers in California earn more than $120,000 annually which ranks as one of the highest salaries in the United States. Independent contractors who build their business can achieve higher earnings than the national average. 

    Why Becoming Licensed Matters 

    People often ask if they can operate as contractors without obtaining a license.  

    The answer yes but only applies to projects that involve less than $500 worth of labor and materials. The law demands licenses for all projects exceeding $500 in value and unauthorized operation will result in serious penalties that include both monetary fines and criminal prosecution. 

    Obtaining a license serves two purposes: It helps people follow regulations, and it establishes their professional credibility. The state of California sets strict requirements for licensure and licensed contractors gain trust from clients and businesses and government agencies. 

    Take the First Step Toward Licensing 

    The California construction industry has tons of potential, but only licensed contractors are able to capitalize on it.  

    And to do that, you must first pass what is one of the more difficult contractor exams in the country. Contractor Training Center can help you prepare to pass the exams now that you have the proper experience. By taking exam preparation courses, you will be on your way toward a very rewarding job that boasts long-term stability and growth. 

    Ready to get started? Begin your licensing preparation courses today.  

    Register now for our California General Building (B) Contractor Exam Prep course. We’ll help you get ready for the exams, sort out the requirements, and teach you how to become a licensed general building contractor in California. 

     

    FAQs: California Contractor Licensing Requirements and Exams  

    Do I need a license to work as a contractor in California? 

    Yes. Any project valued at $500 or more in labor and materials requires a license from the Contractors State License Board (CSLB). Working without a license can result in fines and criminal penalties. 

    What exams do I need to pass? 

    All applicants must pass two exams: the Law and Business Exam and a Trade Exam specific to their license classification. 

    How much does it cost to apply? 

    The initial application fee is $450. Once approved, there is an additional license fee of $200 for sole owners or $350 for non-sole owners. You must also obtain a $25,000 contractor bond. 

    Do I need insurance to get licensed? 

    Yes. Contractors must file proof of a $25,000 surety bond with the CSLB. Depending on the license type, liability or workers’ compensation insurance may also be required. 

    How long does the licensing process take? 

    On average, applicants should expect at least 2-4 months from application submission to license issuance. 

    Can out-of-state contractors get licensed in California? 

    Yes, but they must apply through the CSLB and meet California’s requirements. Some states have reciprocity agreements allowing qualified contractors to waive the trade exam. Check with your state to see if this applies to you. 

    What happens if I fail either exam? 

    You can retake the exam. The CSLB allows applicants to reschedule, though you must pay a $100 fee for each rescheduling. You have 18 months after CSLB accepts your application to pass both exams. Exam results are valid for five years, so if you pass one part, you only need to retake the failed portion within that time frame.  

    Contractor Training Center offers an Access-Until-You-Pass Guarantee, so you can review all course materials and use our exam simulator as much as you need until you pass the exam. 

    What are the penalties for contracting without a license? 

    Unlicensed contractors working on jobs worth $500 or more risk fines up to $15,000 and possible misdemeanor charges, including jail time. Repeat offenses carry heavier penalties. 

    Can I get a contracting license in California if I have been convicted of a felony? 

    Yes, but there are some exceptions. The CSLB may deny a license if the conviction is closely related to contractor responsibilities. However, applicants who can show sufficient rehabilitation may still qualify for a license. 

    What happens if CSLB rejects my application? 

    If your application is incomplete, CSLB will return it with instructions. You have 90 days to correct and resubmit. If you miss this deadline, the application becomes void and you’ll need to start over with a new application and processing fee. 

    What should I bring to my examination? 

    Exams are held at PSI test centers. Arrive 30 minutes early with valid government-issued photo ID, such as a driver’s license, U.S. passport, military ID, resident alien card, or employment authorization card. 

    Will CSLB send me a license if I pass? 

    Yes. You’ll receive a wall certificate and a plastic pocket card showing your license details. The wall certificate must be displayed in your main office, and CSLB recommends carrying your pocket card when conducting business. Certificates and cards typically arrive 5-10 business days after issuance. 

    How long is my license valid? 

    California contractor licenses are valid for two years, expiring on the last day of the month in which they were issued. 

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