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It is illegal in the state of California for an unlicensed contractor to work on any construction project totaling more than $500. That is both in combined labor and material, and this can include any employees that are working under you as a contractor.
Those who are caught contracting without a license likely will have to appear before a Superior Court judge to answer to misdemeanor charges that can carry a potential sentence of up to six months in jail and/or a $5,000 fine, as well as an administrative fine of $200 to $15,000.
In California, the laws for contractors are very strict. A person cannot hire an unlicensed contractor to develop or to complete a construction project. A property owner can get into legal trouble if they hire a contractor that does not have the proper license in California.
Under California Contractor's State License Law, an unlicensed contractor may not bring or maintain any action for compensation for performing any act or contract for which a license is required unless the contractor was duly licensed at all times during performance.
Unlicensed individuals can only pull a permit if they are exempt from licensure under Contractor State License Law. If exempt, the individual must provide a written and signed statement giving the basis for the alleged exemption.