What to Do If a Contractor Isn't Licensed in California

Before assuming a contractor is unlicensed, confirm it. Search the CSLB "Check a License" tool by license number or business name, or look them up in this directory. CSLB license numbers are 6 or 7 digits; for name searches, enter an individual's last name first and try the company name with and without spaces. A license must read Active, not expired, suspended, inactive, or revoked, to be valid.

If you can't find any record and they can't produce a license number, treat them as unlicensed and don't proceed on a job that requires a license.

In California, any construction job priced at $1,000 or more, counting labor, materials, and all other items, must be done by a CSLB-licensed contractor. The $1,000 threshold was enacted by Assembly Bill 2622, effective January 1, 2025 (Business & Professions Code §7048); it was $500 before that, and many older guides still say $500. Contracting without a license at or above the threshold is a misdemeanor under Business & Professions Code §7028.

Below $1,000, a person may do minor work without a license only if every condition holds: the work is casual and minor, it requires no building permit of any kind, they employ no one on the job, it isn't part of a larger project or split into smaller contracts, and their advertising discloses that they aren't licensed. A job priced at exactly $1,000 is not exempt.

If you hire an unlicensed person, you give up the protections licensing provides: there's no $25,000 contractor bond to claim against, no CSLB disciplinary leverage, and if an uninsured worker is injured on your property you could be asked to pay through your homeowner's insurance policy or face lawsuits.

Recovering money for bad or unfinished work is harder without those levers, though the law does give you a strong remedy against unlicensed operators, covered below. The safer path is to verify a license up front and only hire an Active, correctly classified contractor.

You can report suspected unlicensed contracting to CSLB through its complaint process. CSLB investigates unlicensed activity and can issue citations, pursue legal action, and run enforcement operations.

Provide what you can document (advertising, bids, contracts, and payment records) and let CSLB adjudicate. Stick to facts you can support; CSLB is the body that determines whether a violation occurred.

Contracting without a license is a misdemeanor under Business & Professions Code §7028. A first offense carries up to six months in county jail and/or a fine of up to $5,000. A second conviction carries a mandatory minimum of 90 days in jail plus a fine of the greater of 20% of the contract price or $5,000, and a third or later conviction runs 90 days to a year in jail with fines from $5,000 up to the greater of $10,000 or 20% of the contract price.

Repeat offenses stay misdemeanors; felony exposure comes from separate statutes, chiefly unlicensed contracting for repairs in a declared disaster area (Business & Professions Code §7028.16) and license fraud. On the administrative side, CSLB can issue citations with civil penalties of $1,500 to $15,000 against unlicensed operators (Business & Professions Code §7028.7, the range for citations issued on or after July 1, 2026 under SB 779), and licensed contractors who aid or contract with unlicensed persons face citations of $1,500 to $30,000.

California gives the hirer of an unlicensed contractor an unusually strong civil remedy: under Business & Professions Code §7031(b), you may sue to recover all compensation you paid, regardless of the quality of the work. It's disgorgement, not damages, so you don't have to prove the work was defective. A narrow substantial-compliance exception (§7031(e)) protects a contractor who had been duly licensed before the work, acted reasonably and in good faith to stay licensed, and promptly fixed the lapse, so recovery isn't automatic in every case.

Two more levers: §7031(a) generally bars an unlicensed contractor from suing you to collect payment, and §7028 designates the person who hired the unlicensed operator a crime victim eligible for restitution in a criminal case, regardless of whether you knew they were unlicensed. Document your payments, and consider small-claims court for smaller amounts.