By David Kalb, President of Capitol Services, Inc.
It’s probably not a ‘shock’ to hear government is short on funds, but what does this mean for enforcement of contractor’s rules in California? We’ll investigate how this may affect your workers in the field. Another contractor’s question helps define how an ‘out of state’ company could partner with your contracting business…
Q: I am a licensed General contractor, working on putting a project together for a local government. The owner has previously used a specific contractor for some of its low voltage wiring. This contractor has a "B" license and has given us a sub-bid to install the low voltage electrical and conduit for this project. My question is, can a "B" contractor take a sub-contract for less than 2 trades? And can he legally install this work without a specialty license?
A: "B" contractors cannot take a sub-contract if it only involves one trade unless he also holds the required specialty class or the one “trade” is framing or carpentry. In other words, he would need to hold the “C-7” (Low Voltage) or “C-10” (Electrical) classification for this project. B&P Code section 7057(b) covers this in detail.
In 2009 the Legislature gave the CSLB the authority to fine electrical contractors that employ uncertified workers; however, they did not provide the additional funding or personnel required to handle this type of enforcement. Legally the Division of Apprenticeship Standards (DAS) must certify Journeyman electricians before they can actively work for “C-10” contractors.
According to a recent article in the Sacramento Business Journal, a group of electrical contractors have recently formed The Construction Compliance Trades Program to target these uncertified electricians. Acting on tips, “investigators” are sent to job sites to interview and photograph workers who are required to carry cards proving they’re certified. In one recent investigation, eleven journeymen, working for three different companies, were allegedly discovered to be in noncompliance. This information was turned over to the CSLB for an official investigation. If the workers are found to be in violation the companies could each be fined. Further, this citation would stay on the contractor’s license record for up to 5 years.
Q: I represent a construction company Incorporated in Delaware. They are planning on conducting business in Los Angeles but do not have a CA contractor’s license. My client would like to know if in place of taking the law and general building exams, he can associate or Joint Venture with an established company that possesses a General contractor’s license?
A: Your client may only “Joint Venture” with an established company if they themselves have a CA contractor’s license. By definition, a Joint Venture (JV) consists of two or more entities that are licensed, active and in good standing. This would mean having someone qualify a license for the out-of-state company by taking the law and trade exams. If you go through this process, there would be no need for the JV.
This company may want to “associate” with another entity by forming a partnership of corporations. In this example, the partnership will need to designate a qualifying individual (i.e. someone who already holds a license or must sit for the license exams).
However, I would recommend that your client directly apply for the license rather than go through either one of the above scenarios.
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com <mailto:info@cutredtape.com> , or write me at Capitol Services, Inc., 1225 8th St. Ste. 580, Sacramento, CA 95814. Research past columns at www.cutredtape.com <http://w
ww.cutredtape.com/> .
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