Unlicensed Contracting in California: What the Law Says

Since January 1, 2025, California lets an unlicensed person take jobs under $1,000.³ The exemption ends the moment the job needs a building permit or the person hires a helper, whatever the price.²

Who Needs a License

Business and Professions Code 7026 defines a contractor broadly. It is anyone who builds, alters, repairs, improves, moves or demolishes a structure, alone or through others. Offering to do the work or submitting a bid also counts.¹

Section 7028 makes it a misdemeanor to act as a contractor without a license, unless an exemption applies. The same applies to work under a license suspended for unpaid civil penalties or unresolved liabilities.⁴

The minor work exemption

Section 7048 exempts a project whose total price for labor, materials and everything else is under $1,000. Three more conditions apply:²

• the work does not require a building permit;
• the person does not employ anyone to do or help with the work;
• the person does not advertise as a contractor or as qualified to be one.

Splitting a larger job into contracts under $1,000 does not qualify.² The limit was $500 until Assembly Bill 2622 (Chapter 240, Statutes of 2024) raised it on January 1, 2025.³ The current text of 7048 was last amended effective January 1, 2026.²

An unlicensed person may advertise for work up to $1,000 only if the ad says the person is not licensed.³ Advertising for licensed work without the license is a separate misdemeanor, with a fine of $700 to $1,000.⁶

Criminal Penalties

The third-offense penalties also apply to a person named on a license that was revoked, if that person was held responsible for the revocation.⁴ Prosecutors have four years to file. The clock starts at the contract proposal, contract, completion or abandonment, whichever is last.⁴

The disaster-area section covers repairs of damage from a natural disaster declared by the Governor or the President.⁵

What It Means for the Homeowner

The contractor cannot sue to collect. Under Section 7031(a), a person who needed a license cannot sue for payment without alleging a valid license for the whole job. This applies "regardless of the merits" of the claim.⁷

The homeowner can sue to get money back. Section 7031(b) lets the person who hired an unlicensed contractor sue to recover all compensation paid. Both rules have exceptions in subdivision (e).⁷

The homeowner is a crime victim. After a conviction, the person who used the unlicensed contractor counts as a victim. That person can claim restitution, even without knowing the contractor was unlicensed.^4,5

Injuries can become the homeowner's cost. CSLB warns that if uninsured workers are hurt on your project, you could be asked to pay. The claim may fall on your homeowner's policy or end up in a lawsuit.⁸ A licensed contractor must keep workers' comp or an exemption on file. From January 1, 2028, almost every active license must carry a policy.¹⁴ See workers' comp on a license.

How CSLB Enforces the Law

When CSLB has probable cause that someone is contracting without a license, the Registrar must issue a citation.⁹ Proactive work falls to CSLB's Statewide Investigative Fraud Team (SWIFT). It runs undercover sting operations, sweeps active job sites and follows up leads.¹⁰

CSLB reported these 2025 results in its annual report:¹⁰

The same report counts 1,622 citations in all for 2025, 866 of them to licensees. SWIFT also issued 286 stop orders for workers' comp violations.¹⁰ After the 2025 Los Angeles County wildfires, one operation in Altadena led to felony disaster-area charges against five people.¹⁰ CSLB says that contracting without a license in a declared disaster area is a felony.¹³

How to Report Unlicensed Activity

1. Check the license first in the CSLB lookup. Reading a CSLB license record explains each field.
2. For unlicensed work on an active job site, send CSLB's SWIFT Lead Referral form. Say whether there are employees on site and add photos.¹¹
3. For a contractor who skipped a required permit, use the Building Permit Violation Referral form.¹¹
4. If you have a contract with the person, file a construction complaint online or by mail. Help line: (800) 321-CSLB (2752), Monday to Friday, 8 a.m. to 5 p.m.¹²

CSLB notes that filing a false complaint is an infraction, with penalties up to $1,000.¹²