Unlicensed Contracting in California

Contracting without a license in California is a misdemeanor — but § 7028(a) opens “Unless exempted from this chapter”, and the exemption below $1,000 needs all three of its conditions, not the price alone. A first conviction brings up to $5,000, six months, or both. Later convictions set floors rather than ceilings, and a third is a higher tier again.

The offense

Section 7028(a): “Unless exempted from this chapter, it is a misdemeanor for a person to engage in the business of, or act in the capacity of, a contractor within this state under either of the following conditions: (1) The person is not licensed in accordance with this chapter.”

The same subdivision reaches a second situation that people do not expect. Section 7028(a)(2), quoted whole because the cross-references are part of it: “The person performs acts covered by this chapter under a license that is under suspension for failure to pay a civil penalty or to comply with an order of correction, pursuant to Section 7090.1, or for failure to resolve all outstanding final liabilities, pursuant to Section 7145.5.” Holding a license is not the test; holding one that is in force is.

The penalties, and how they escalate

There are three tiers, not two, and each one below names its own subdivision so that no paragraph here has to be read next to another one to be attributable.

First conviction, § 7028(b): “punishable by a fine not exceeding five thousand dollars ($5,000) or by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment.”

A later conviction, § 7028(c), sets a floor rather than a ceiling — and it is expressly conditional on the next tier not applying. Where “a person has been previously convicted of the offense described in this section, unless the provisions of subdivision (d) are applicable”, the court “shall impose a fine of 20 percent of the contract price, or 20 percent of the aggregate payments made to, or at the direction of, the unlicensed person, or five thousand dollars ($5,000), whichever is greater”, and the person “shall be confined in a county jail for not less than 90 days, except in an unusual case where the interests of justice would be served by imposition of a lesser sentence or a fine.”

A third or subsequent conviction is its own tier, § 7028(d): “punishable by a fine of not less than five thousand dollars ($5,000) nor more than the greater amount of ten thousand dollars ($10,000) or 20 percent of the contract price, or 20 percent of the aggregate payments made to, or at the direction of, the unlicensed person, and by imprisonment in a county jail for not more than one year or less than 90 days.” The same subdivision adds that this penalty “is cumulative to the penalties available under all other laws of this state.”

Because the fine at both of the later tiers is a percentage of the contract price or of payments received, the exposure scales with the size of the job rather than being capped.

When a license is required

The Board’s statement of the trigger: a license is required “if the project requires a building permit or uses any additional workers or the total cost (labor and materials) of one or more contracts on the project is $1,000 or more”, and licensure is required “before submitting bids” (CSLB).

The statutory exemption at § 7048 is narrower than the dollar figure alone. It applies where the aggregate contract price “is less than one thousand dollars ($1,000), that work or operation being considered of casual, minor, or inconsequential nature, and the work or operation does not require a building permit.” All three have to hold. That threshold became $1,000 effective 1 January 2026, so older sources give a different number.

Two further limits sit in the same section. Section 7048(b) blocks splitting work: it does not apply where “a division of the operation is made in contracts of amounts less than one thousand dollars ($1,000) for the purpose of evasion of this chapter or otherwise.” And § 7048(c) removes the exemption from anyone who advertises as a contractor or who “employs another person to perform, or assist in performing, the work”.

Who may be exempt

The Board’s own exemption page (CSLB) lists categories that “may be exempt”, including an employee paid wages who does not have direction or control over the work, public personnel on public projects, officers of a court acting within their office, public utilities under specified conditions, oil and gas operations by an owner or lessee, owner-builders working on their own property using their own labor or employees paid wages, and the sale or installation of finished products that do not become a fixed part of the structure.

Note the Board’s own phrasing — these may be exempt. Whether a particular arrangement falls inside an exemption is a determination, and it is not one this page can make for you.

If you are facing a charge or a citation, that determination is worth taking to a California attorney. This page sets out what the statute says; it does not know your facts, and the difference between the two is where the exemptions live. Saying so is not a disclaimer at the end of a page — it is the point at which a description of the rules stops being useful and somebody who can apply them to your situation starts.

If you are checking someone else rather than yourself, check a license takes a minute. To get licensed, see the licensing requirements, the cost of getting licensed, or the California contractor license overview.