California Relaxes Rules for Unlicensed Contractors

SACRAMENTO — Thanks to the efforts of Assemblyman Juan Carrillo, a new law effective January 1st allows unlicensed persons to legally work on projects up to $1,000 where the previous limit was $500. With the threshold doubled, Assembly Bill 2622 (Chapter 240, Statutes of 2024) gives breathing room for skilled folks without a contractor’s license to access more employment opportunities.

Stipulations surrounding this increased threshold should be noted, including that if the job under $1,000 requires extra workers or any building permits, then a contractor’s license in the applicable classification is required. Advertisements by unlicensed contractors abiding by the set stipulations have been given the green light unless the labor, cost of materials, and any other needed supplies exceed $1,000. The advertisement must disclose the individual is unlicensed.

The Contractors State License Board advises against any down payments for work to exceed 10 percent of the contract price. Subsequent payments should not surpass the value of the completed job or delivered materials.

Penalties for not following the guidelines set forth by AB 2622 can vary, including administrative fines of up to $15,000 and a jail sentence of up to six months with additional penalties of as much as $5,000. Approximately 285,000 California contractors are regulated by the Contractors State License Board.