California Unlicensed Contractor Penalties: SB 779 Raises Minimum Fines to $1,500

Getting caught doing unlicensed contractor work in California now costs more than it used to. Since July 1, 2026, Senate Bill 779 has raised the minimum civil penalty the Contractors State License Board (CSLB) can assess for unlicensed activity to $1,500, up from $200, with other license law violations carrying their own minimum penalties of $500 or $1,500 depending on the offense.

At a glance

• Unlicensed contracting citations now carry a $1,500 to $15,000 civil penalty, up from a $200 floor (Bus. & Prof. Code 7028.7).
• A first criminal conviction for contracting without a license brings up to $5,000 and up to six months in county jail (Bus. & Prof. Code 7028).
• Work under $1,000 in combined labor and materials is exempt from the license requirement, if it is casual, minor work and no permit is required (Bus. & Prof. Code 7048).
• CSLB can act on a complaint for up to four years after the work, against licensed or unlicensed contractors alike.

New to licensing in California? Start with the California contractor license requirements, and for every other state see how to get a contractor license in each state.

What Changed Under SB 779

SB 779 amended two sections of the Business and Professions Code that the CSLB uses to cite unlicensed and licensed contractors. Both changes became operative July 1, 2026.

Under Section 7028.7, every citation for acting as a contractor without a license must be in writing, state the basis for the citation, and include both an order of abatement and a civil penalty of at least $1,500, with a ceiling of $15,000. Before July 1, 2026, the floor on that same citation was $200. Under Section 7099.2, which covers a wider set of license law violations by licensed and unlicensed contractors, the minimum penalty is now $500 for most violations and $1,500 for violations of Sections 7110, 7114, or 7118, which cover willful violation of building, safety, or labor laws (Section 7110), aiding or conspiring with an unlicensed person to evade the law (Section 7114), and contracting with an unlicensed contractor (Section 7118). The ceilings on those two tiers are $8,000 and $30,000.

Both statutes also let the CSLB raise the new minimums for inflation every five years, based on the change in the Consumer Price Index, rounded to the nearest $100 or $1,000 depending on the size of the increase. The board sets the exact citation amount within each range after weighing the gravity of the violation, the person's good faith, and any history of prior violations.

Section 7028.7 also covers public agencies. If the registrar learns that a public entity plans to award, or has already awarded, a contract to an unlicensed contractor, CSLB must notify that entity in writing within 72 hours that a citation may follow. If the entity awards the contract anyway, the responsible officer or employee can be cited directly.

Notes on the table:

• The 7028.7 and 7099.2 minimums apply to citations issued on or after July 1, 2026.
• Sections 7110, 7114, and 7118 cover building, safety, and labor law violations; aiding an unlicensed person to evade the law; and contracting with an unlicensed contractor.
• The 7027.1 advertising fine is unchanged by SB 779; it applies when an unlicensed person advertises contracting services without disclosing that status.

Criminal Penalties for Unlicensed Contracting

SB 779 changed the civil citation amounts the CSLB can assess, not the separate criminal penalties under Section 7028, which remain in force alongside it. Acting as a contractor without a license is a misdemeanor:

1. A first conviction brings a fine of up to $5,000, up to six months in county jail, or both.
2. A second conviction brings a mandatory fine of 20 percent of the contract price, or 20 percent of total payments received, or $5,000, whichever is greatest, plus at least 90 days in county jail.
3. A third or later conviction brings a fine of at least $5,000, up to the greater of $10,000 or 20 percent of the contract price, plus 90 days to one year in county jail.

Anyone who hired the unlicensed person is treated as a crime victim eligible for restitution, regardless of whether they knew the contractor lacked a license. Contracting work is exempt from the license requirement only if the combined labor and material cost on the project is under $1,000, the work is casual, minor, and inconsequential, and no building permit is required; splitting one job into smaller contracts to dodge that line does not work. Unlicensed work performed on property damaged in a declared disaster carries its own, steeper penalty under Section 7028.16: a felony fine of up to $10,000 and up to three years in state prison, or, in the alternative, a misdemeanor fine of up to $1,000 and up to one year in county jail.

What Hiring an Unlicensed Contractor Costs the Homeowner

The penalties above fall on the unlicensed person, but hiring one has its own cost. Every California contractor license carries a $25,000 surety bond or cashier's check filed with CSLB, and a homeowner can file a claim against that bond if a licensed contractor violates license law, damages property, or does not pay workers. An unlicensed contractor has no CSLB bond on file, so that specific protection does not exist. State law gives the hiring party a separate remedy instead: under Section 7031(b), anyone who used an unlicensed contractor's services can sue in court to recover all compensation they paid that contractor for the work, regardless of the quality of the work performed.

Penalties for Unlicensed Electrical Work

Electrical contracting in California falls under the C-10 classification, and unlicensed electrical work is prosecuted the same way as any other unlicensed trade, under Section 7028, with the same misdemeanor penalties described above. A licensed contractor who knowingly hires an unlicensed person to do electrical work on a project is separately exposed under Section 7118 and Section 7099.2, now carrying the $1,500 to $30,000 civil penalty range. An unlicensed person who advertises electrical contracting services without disclosing that they are not licensed faces the $700 to $1,000 fine under Section 7027.1 on top of any citation for the unlicensed work itself.

How to File a Complaint Against a Contractor

CSLB takes complaints against licensed and unlicensed contractors alike, for violations going back up to four years.

1. Notify the contractor in writing about the problem first. CSLB asks about this step and recommends keeping a copy of the letter.
2. Gather copies, not originals, of the contract, change orders, cancelled checks, and photos.
3. File the Construction Complaint form online at CSLB's consumer complaint page, or download and mail it with your documentation.
4. Use CSLB's separate Advertising Complaint form for illegal advertising, or its Lead Referral form if you know of an active job site but are not a party to the contract.

CSLB confirms receipt within two to three weeks and then contacts the contractor to try to resolve the complaint. A CSLB investigation is not a path to getting your money back; it can lead to a fine, suspension, or license revocation, but homeowners pursuing reimbursement typically still need small claims court or a civil case.

Four More 2026 California Contractor Laws

SB 779 is one of several California contractor laws that took effect in 2026, all aimed at tightening oversight of the industry.

SB 291 significantly increases penalties for workers' compensation insurance violations. It also requires CSLB to build a new process for verifying workers' comp exemption eligibility and to report findings to the Legislature by 2027, plus annual reporting of workers' comp enforcement data. Effective January 1, 2026.

AB 1327 requires home improvement contracts to include a valid email address and phone number, and requires contractors to let buyers cancel a contract by email. A missing cancellation notice is grounds for a CSLB complaint. Effective January 1, 2026.

SB 517 requires contractors who use subcontractors on home improvement projects to disclose the subcontractor's name, contact information, license number, and classification upon request. The prime contractor stays responsible for the project, but the subcontractor can also face discipline. Effective January 1, 2026.

AB 1002 jointly authorizes the Attorney General and CSLB to bring civil actions to suspend, revoke, or deny a contractor's license for failing to pay workers or comply with a wage judgment or court order. The Attorney General must notify CSLB before filing, and CSLB may intervene. Effective January 1, 2026.

The pattern across all five laws is the same: higher fines, more disclosure requirements, stronger workers' comp oversight, and more tools for prosecutors to go after unlicensed and noncompliant contractors.

Why This Matters Beyond California

California is the largest contractor licensing jurisdiction in the country, and other state boards tend to watch what it does. A contractor working across state lines, or a company that qualifies in more than one state, should expect the direction, not necessarily the exact dollar figures, to show up elsewhere as other legislatures revisit their own unlicensed-activity penalties. For a state-by-state look at what changed in 2026, see our roundup of contractor license law changes in 2026 by state.

Getting Licensed the Right Way

If a company wants to bid and contract legally in California, it needs a qualifying agent on the license, either the Responsible Managing Officer (RMO) or Responsible Managing Employee (RME), who holds the qualifying exam and supervises the work. A qualifying agent does not simply put a name on paperwork; the role qualifies the company as an owner or full time W-2 employee who is actually responsible for supervising construction operations. CSLB also requires a $25,000 bond on file for the license itself, and a separate $25,000 bond for a responsible managing employee, on top of passing the trade and law exams.

For more on what that role does and does not involve, see what a qualifying agent is and how to hire a qualifying agent. Companies that need help finding and screening a qualified candidate can also look at contractor qualifier services.

The Bottom Line

If a contracting business has been putting off getting licensed, or if a license has lapsed, the cost of waiting just went up. A $1,500 minimum civil penalty is the floor, not the ceiling, and it can land on top of a misdemeanor conviction, lost contracts, and a record that follows the business into future bids.

Getting licensed is also what lets a contractor pull permits, carry the insurance a client expects, and bid work that requires proof of licensure. For help getting licensed correctly in California or any other state, call 615-219-2110 or visit Hire a Qualifying Agent.

FAQ

What is the penalty for hiring an unlicensed contractor in California? The unlicensed worker faces the civil and criminal penalties described above, and the person who hired them is treated by law as a crime victim eligible for restitution. The practical cost falls on the hiring side too: there is no CSLB license bond to claim against, since that bond only exists for an active license.

Is unlicensed electrical work a crime in California? Yes. Electrical contracting work requires a C-10 license, and doing it without one is a misdemeanor under the same Section 7028 that covers every other unlicensed trade, with penalties that escalate on a second or third conviction.

What is the dollar threshold that requires a contractor license in California? A project is exempt from the license requirement only if the combined cost of labor and materials is under $1,000, the work is casual and minor, and no building permit is required, under Section 7048.

How do I file a complaint against a contractor in California? File online or by mail with CSLB's Construction Complaint form, after first notifying the contractor in writing. CSLB can act on complaints against licensed or unlicensed contractors for up to four years after the work.

How do I become a licensed contractor in California? A company needs a qualifying individual who passes the required exams and actively supervises the work, plus the required $25,000 bond and insurance. See the California contractor license requirements for the full classification, exam, and bond details.

Can I file a bond claim against an unlicensed contractor? No. The $25,000 bond CSLB requires is tied to an active license, so there is no bond to claim against when the person was never licensed. A homeowner's options against an unlicensed contractor are a CSLB complaint, which can trigger the citation penalties above, and a court action.

Can I get my money back if I paid an unlicensed contractor? Under Section 7031(b), a person who used an unlicensed contractor's services can sue to recover all compensation paid to that contractor for the work, separate from any CSLB citation or criminal case against the contractor.

Do the higher SB 779 penalties apply to citations issued before July 1, 2026? No. The higher minimums in Sections 7028.7 and 7099.2 are operative starting July 1, 2026, and apply to citations issued on or after that date. Citations issued before then were assessed under the prior, lower minimums.

Sources

• CSLB Industry Bulletin #25-04, "New Laws Affecting Contractors Starting in 2026", retrieved October 12, 2026
• CSLB, Filing a Construction Complaint, retrieved October 12, 2026
• CSLB Fast Facts, A Guide to Contractor License Bonds, Rev. 8/2025, retrieved October 12, 2026
• Business and Professions Code Section 7028.7, retrieved October 12, 2026 (leginfo.legislature.ca.gov and law.justia.com both returned 403 Forbidden; this source was cross-checked against the CSLB bulletin above)
• Business and Professions Code Section 7099.2, retrieved October 12, 2026 (same access note as above)
• Business and Professions Code Section 7028, retrieved October 12, 2026 (same access note as above)
• Business and Professions Code Section 7028.16, retrieved October 12, 2026 (same access note as above)
• Business and Professions Code Section 7048, retrieved October 12, 2026 (same access note as above)
• Business and Professions Code Section 7027.1, retrieved October 12, 2026 (same access note as above)
• Business and Professions Code Section 7031, retrieved October 12, 2026 (same access note as above)