California laws require a handyman to have a license for any job over $500. A contractor's license brings security to homeowners while giving a handyman the ability to make more money. The Statewide Investigative Fraud Team, or SWIFT, is doing a clean sweep on illegal and unlicensed contractors who are working in California. When an unlicensed handyman is doing construction work without a license, both fines and disciplinary action are likely.
The Five Hundred Dollar Job
California law states that an unlicensed handyman cannot charge more than $500 for a job. This pay includes labor and cost of materials. It also includes that same fee if a handyman is performing more than one job at once; for instance, a handyman hired to paint a fence, unclog a sink and repair floor boards for a homeowner will walk away with no more than $500 for work performed in various home repair areas.
The Minor Work Exemption
If a handyman wants to make more than $500 on a job, he'll have to obtain a general contractor’s license first. However, someone working without a license for small jobs is protected from any recourse from the government if he applies for the minor work exemption in California. The exemption allows the individual perform small jobs but not present themselves as a business entity to the broad public. In other words, the handyman cannot advertise his business as a freelancer looking for jobs.
Licensing the Handyman
To obtain a general contractor’s license, a person must have at least four years of qualified experience. Proof of experience is required. Often experience is specialized as a journeyman in a specific field, like that of carpentry or plumbing. As California sees it, a handyman working without a contractor’s license puts homeowners at risk for liability if something should go wrong. When a handyman is going to make more than $500, a contractors state board license is required. To have a licensed issued, the handyman must be finger printed, have an FBI background check and be bonded or insured. Without these, the handyman is subject to six months in jail and can be fined up to $5,000.
Other Handyman Requirements
In California, a handyman managing a small business will also have to obtain a business tax license. If the contractor is hiring other employees, he must register with the federal government to obtain a tax identification number. Liability insurance policies and workers compensation may also be required.