1. Public Works Contracting Tips & Prosecution Strategies
David Fogt, Registrar
Contractor State License Board

2. CSLB Mission Statement
To protect consumers by regulating the construction industry through policies that promote the health, safety, and general welfare of the public in matters relating to construction.

3. CSLB Fast Facts Intake, Administrative Actions, Criminal Referrals
CA Department of Consumer Affairs (Est. 1929)
15 Member Board / Public Meetings
HQ & 12 Field Offices (Northern & Southern CA)
Approximately 400 Employees
44+ Licensed Trade Classifications\
Approx. 300,000 Licensed Contractors
Approx. 14,000 Registered HIC Salespersons
License Administration & Discipline
Consumer Complaints
Intake, Administrative Actions, Criminal Referrals
Statewide Investigative Fraud Team (SWIFT)
Fraud Investigations for Enforcement Referrals
Proactive “Stings” & “Sweeps

4. Topics for Discussion Licensing Violations & Fraud
Labor Protection Issues
Enforcement Approaches
Administrative Remedies

5. Contractor License Requirement
Business and Professions Code (BPC) 7026
Contractor is synonymous with “builder”
Undertakes, or offers to undertake a construction project
Includes subcontractor and specialty contractor

6. BPC
(2) (A) Any person, consultant to an owner-builder, firm, association, organization, partnership, business trust, corporation, or company, who or which undertakes, offers to undertake, purports to have the capacity to undertake, or submits a bid to construct any building or home improvement project, or part thereof.

7. Consultant License Requirement
When is a construction consultant required to be licensed?

8. BPC 7028.7 Penalty $200 to $15,000 civil penalty
Compensation Prohibited

9. Licensing Violations Contracting without a license is illegal in CA
Misdemeanor punishable by 6 months jail and/or $5k fine (first offense); 90 days jail to 1 year and $10k or 20% contract value (2x offenders or revoked / suspended prior licensees); 90 days jail to 1 year and $5k to $10k fine or 20% contract value (3x+), cumulative to all other (admin) penalties provided by other laws.
Business & Professions Code Section 7028

10. Common License Violation Examples
Disaster Area Soliciting / Contracting w/o License Illegal in CA
Felony / Misdemeanor - B&P Code
Fraudulent Use of Contractor License # of Another

11. Common License Violation Examples Continued
Misusing Licenses / Illegal Partnerships Illegal in CA
Misdemeanor – B&P 119, 7028, , 7153, et.al.
Advertising Violations
Misdemeanor - B&P Code

12. Responsibility of Awarding Agency
Pre Qualify Bidders – Public Works Tool Kit
Confirm Personnel of Record
Verify License Status of Prime and Subcontractors
Public Officer Subject to Fine for Contracting with Unlicensed Person

13. B&PC 7059 (b)
In public works contracts, as defined in Section 1101 of the Public Contract Code, the awarding authority shall determine the license classification necessary to bid and perform the project.

14. License Classifications
A General Engineering
B General Building
C-2 Insulation & Acoustical
C-4 Boiler, Hot Water, Heating System Fitting
C-5 Framing & Rough Carpentry
C-6 Cabinet, Millwork & Finish Carpentry
C-7 Low Voltage Systems
C-8 Concrete
C-9 Drywall
C-10 Electrical
C-11 Elevator
C-12 Earthwork & Paving
C-13 Fencing
C-11 Elevator
C-12 Earthwork & Paving
C-13 Fencing
C-15 Flooring & Floor Covering
C-16 Fire Protection
C-17 Glazing
C-20 Warm Air, Heating Ventilation & Air Conditioning
C-21 Building Moving/Demolition
C-23 Ornamental Metal
C-27 Landscaping

15. License Classifications
C-28 Lock & Security Equipment
C-29 Masonry
C-31 Construction Zone Traffic Control
C-32 Parking & Highway Improvement
C-33 Painting & Decorating
C-34 Pipeline
C-36 Plumbing
C-38 Refrigeration
C-39 Roofing
C-42 Sanitation System
C-43 Sheet Metal
C-45 Electrical Sign
C-46 Solar
C-47 General Manufactured Housing
C-50 Reinforcing Steel
C-53 Swimming Pool
C-54 Tile (Ceramic & Mosaic)
C-55 Water Conditioning
C-57 Well Drilling
C-60 Welding
C-61 Limited Specialty Classifications

16. Instant License Check Feature to review contractors credentials
More than 100,000 hits

17. Instant License Check
Allows consumers to search for licensed contractors by classification within a specific geographic area based on city or zip code
Consumers can search for a licensed contractor, contractors to identify potential sub-contractors and awarding agencies to identify potential bidders for contracts

18. Instant License Check

19. CSLB Public Works Enforcement
License Requirements
Failure to Pay for Material or Services
Civil Wage and Penalty Assessment
Certified Payroll Inaccuracies
Electrician Certification

20. Public Works Enforcement Continued
Responsible Persons not on License 7117a
Suspended License
Workers Compensation Insurance Violations LC 3700
Egregious Labor Code Violations LC 1776, 1815, etc.
Illegal Substitution of Subcontractor (PCC 4107)

21. Enforcement Approaches

22. Administrative Remedies

23. Labor Protection Issues

24. Labor Protection Issues
Worker Compensation Insurance
Labor Wage Enforcement
Workplace Safety Regulations
Fair Competition Practices
Project Bonds & Trade Experience

25. Workers Compensation Insurance Requirement
Business and Professions Code 7125
The board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee have on file at all times a current and valid Certificate of Workers Compensation Insurance or Certification of Self-Insurance in the applicant’s or licensee’s business name.

26. Business and Profession Code 7125.4.
(a) The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the workers’ compensation laws after the filing of an exemption certificate… or the employment of a person subject to coverage under the workers’ compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action.

27. Workers Compensation Insurance Statistics
57% of licensees have an exemption from WC.
How many public works contractors have filed an exemption?

28. BPC Continued
(b) Any qualifier for a license who, under Section , is responsible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to prevent the commission of any of the acts that are cause for disciplinary action under this section.

29. CSLB Workers’ Compensation Enforcement
CSLB Stop Order
Contractor considered unlicensed (Isaac vs. Wright) and not entitled to payment pursuant to BPC 7131
Labor Code provides for misdemeanor charges

30. Failure to Pay Employees
Labor Code Section (3)(b)(1) The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or , or through a civil action. The direct contractor’s liability shall be limited to unpaid wages, including any interest owed.

31. BPC 7113
Failure in a material respect on the part of a licensee to complete any construction project or operation for the price stated in the contract for such construction project or operation or in any modification of such contract constitutes a cause for disciplinary action.