Higher Dollar Threshold for Unlicensed Contractor Work in California

Higher Dollar Threshold for Unlicensed Contractor Work Effective January 1, 2025

Starting January 1, 2025, a new law in California increases the monetary threshold for unlicensed contractor work from $500 to $1,000. Under Assembly Bill 2622, individuals without a contractor’s license can legally perform projects valued at less than $1,000, provided certain conditions are met.

Key Provisions of the New Law:

1. Monetary Limit:
   Unlicensed contractors may perform work on projects where the total cost, including labor and materials, does not exceed $1,000.
2. Restrictions:
   • The work must not require a building permit.
   • Unlicensed contractors are prohibited from employing others to perform or assist with the work.
3. Advertising Requirements:
   Unlicensed contractors are allowed to advertise their services for jobs under the $1,000 threshold but must clearly disclose in all advertisements that they are not licensed.
4. Legal Protection for Consumers:
   Consumers should remain cautious when hiring unlicensed individuals and are encouraged to verify project requirements, especially for work involving permits or safety concerns.

Implications for Licensed Contractors:

While this increase provides more opportunities for unlicensed contractors, licensed contractors retain significant advantages, including the ability to:

• Take on projects of any size.
• Perform work that requires permits.
• Offer greater consumer confidence and legal protections.

This change aims to provide flexibility for small-scale work while ensuring clear guidelines for both contractors and consumers. However, it is essential for all parties to understand and adhere to the new rules to avoid potential penalties or disputes.

For more information, visit the California Contractors State License Board (CSLB) website or consult a legal expert to clarify how this law may impact your business.