License Qualifiers Under Greater Scrutiny For Direct Supervision Of Construction Operations

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UPDATE: CSLB, CSLB to Get Tough on RMO Abuses (Summer 2014)

Starting on January 1, 2014, amended Section 7068.1 of California’s Contractors State License Law, Bus. & Prof. Code §§ 7200 et seq., requires licensees’ qualifiers to exercise direct supervision and control over the licensees’ operations to ensure compliance with California’s Contractors State License Law. The amended law contemplates active involvement by the qualifier, and makes a violation of Section 7068.1 grounds for disciplinary action and a misdemeanor punishable by imprisonment in a county jail and/or a fine.

Section 7068 requires every license to have a qualifier, which may be a Sole Owner, Qualified Partner, Responsible Managing Officer (RMO), Responsible Managing Employee (RME), Responsible Managing Manager or Responsible Managing Member. The qualifier is the person who is listed in the Contractor State License Boards’ (CSLB) personnel of record, has demonstrated his/her knowledge and experience though the CSLB’s licensing process, and holds one or more license classifications.

The CSLB’s regulations, Cal. Admin. Code tit. 16, § 823, further define bona fide employee and direct supervision and control. “Bona fide employee” means “an employee that is permanently employed by the applicant and is actively involved in the operation of the applicant’s contracting business for at least 32 hours or 80% of the total hours per week such business is in operation, whichever is less.” Cal. Admin. Code tit. 16, § 823(a). “Direct supervision and control” “includes any one or any combination of the following activities: supervising construction, managing construction activities by making technical and administrative decisions, checking jobs for proper workmanship, or direct supervision on construction job sites.” Cal. Admin. Code tit. 16, § 823(b).

Contractor license applicants will also now be required to submit detailed information regarding the qualifier’s duties and responsibilities for supervision of the applicant’s construction operations.

Additional Resources: California Senate Bill 262; California Legislative History Online; CSLB Industry Bulletin – 12/31/2013; CSLB Winter 2012 Newsletter