SACRAMENTO – The new year has brought important changes in contracting law, including a simpler way for home improvement salespersons (HIS) to register with the (CSLB), a higher contractor bond limit, and a valuable tool to help CSLB fight workers’ compensation insurance fraud.
Salespersons now need only file a single registration with CSLB whether they work for one or multiple contractors. Previously, HIS had to register separately with CSLB for each licensed contractor that employed them.
The earlier registration system had become burdened by the sharp rise in applications in recent years, particularly from salespeople entering the solar industry. CSLB received more than 1,000 HIS applications per month in fiscal year 2014-15, which represents more than an 80 percent jump compared to the average for the previous three years.
CSLB sponsored legislation (Senate Bill 561, Monning) last year to streamline HIS registrations and more speedily process applications. Governor Edmund G. Brown Jr. signed SB 561 into law, which took effect January 1, 2016. In addition to the single registration provision, SB 561:
- Requires a contractor to notify CSLB in writing prior to employing a registered HIS, and when employment ceases;
- Allows CSLB to accept an electronic application and signature from an HIS applicant;
- Requires an HIS to have a current and valid registration with CSLB before making sales calls and transactions on behalf of a contractor; and
- Provides that registrations, at $75 each, are valid for two years from the month of issue.
Several other new laws that impact contractors have been enacted.
- SB 467 (Hill) raises the amount of the contractor bond or cash deposit required of all contractors from $12,500 to $15,000. All licensees must have the new bond or cash deposit in place, or risk having their license suspended.The new law also eliminated the requirement that contractor applicants prove they have $2,500 in working capital as a condition of obtaining a license.
A list of surety companies with blanket endorsements in-place with CSLB is available here.
- SB 560 (Monning) allows CSLB enforcement representatives to issue citations to unlicensed contractors when workers’ compensation insurance violations are suspected. Previously, only district attorney’s offices could cite in cases of workers’ compensation fraud.