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Prove a negative? The unlicensed/uncertified/unqualified worker

Our GC has denied requests for licenses of his subcontractors and claims the other workers are his employees, so he does not have to give us any such information. According to him, as the GC with a B license, he can hire anyone as framers, plumbers, electricians, etc. Is this true in California? After many failed inspections, and in multiple instances my wife and I having to explain the basic physics of plumbing (gravity) to the plumber or how to wire a 4-way switch to the electrician (we found it on Google in 30 seconds), we are very concerned about the quality and safety of the work. Given how many safety issues and code violations we had to point out to the workers, I anticipate costly repairs in the near future, and I expect the GC to claim nothing falls under his warranty. He already tried to blame several issues on our HVAC guy (independent sub), none of which were even remotely related to or in proximity to HVAC work. Plus I would not want his clearly unqualified people trying to repair their own substandard work. Apparently there is some CA law about suing licensed contractors for 100% of the contract value if unlicensed subs are used. Can someone help me understand this a little better? Given a $100,000 contract with the GC, what if 70% of the work (framing) was done by a licensed sub and the other 30% (plumbing and electrical) was done by the GC’s employees, and none of those employees has any type of plumbing or electrical certification? Would this law apply? If so, how could I prove the lack of certification or license? I’ve tried contacting the CSLB and various other entities with the employees’ names. Answers were either “no record of that person” or “if the GC has a B license it doesn’t matter.” In other cases we know only first names, and it’s unclear if the workers are subs or employees. Maybe these people are certified/licensed but I haven’t found the proof yet; I cannot just assume the negative because the GC won’t give up this info. What next?

5 replies

Oct 20, 2022

Business and Professions Code section 7031 allows for disgorgement of funds paid to an unlicensed contractor. However, unlicensed subs are usually considered employees of a licensed GC. You should consult with a construction law attorney.

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Oct 20, 2022

"unlicensed subs are usually considered employees of a licensed GC."

Even if the contract explicitly states "only licensed subcontractors shall be hired"?

In the example, if the electrician and plumber are both unlicensed subs, would section 7031 allow disgorgement of $30k or $100k?

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Oct 20, 2022

7031 is typically put in a lawsuit as a supplement cause of action, not the primary cause of action. You should consult privately with a construction law attorney, so that your documents can be reviewed, and proper analysis performed.

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Oct 20, 2022

It’s called disgorgement, Business and Professions Code 7031.
He is obligated to use only licensed subs. He and they must either have w comp ins. for all their workers, or the licensee him/herself alone has to do the work.
A licensed contractor using workers that are not covered by w comp or are themselves licensed becomes “unlicensed” by operation of law, and likewise exposed to disgorgement for the $% of work done in violation.
Go www.cslb.ca.gov and the “consumer”/“license check” drop down. You can search by license number or if you don’t have it, by business or the person’s name. It is not 100%accurate but it’s a start. A red flag is if the licensee claims to be wcomp exempt, bc in that case that person is the only one that is allowed to do the work, and that is rare.
There is also a complaint form you can use.
If the work is not in compliance with industry stds, there is a departure from plans , or a breach of the contract ( completion date etc.) there are grounds for complaint. It is a violation of Business and Professions code 7159 not to have a written, fixed price contract with at least a start and completion date, and a misdemeanor to charge for more than the work done, or a deposit over $1k.
Have any subs given you a 20 day pre lien notice? If not, you are not exposed to their mechanic’s lien, but you remain exposed for w comp claims if anyone is hurt on your job and their employer doesn’t have that coverage, so knowing who is on your property and they are licensed and insured is your right.
KWCL handles these regularly.

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Nov 22, 2022

Disgorgement has been determined by the courts to be a penalty against the contractor for having licensure discrepancies. While it is a harsh penalty, it is NOT absolute. A contractor may have some wiggle room if he can qualify under section 7031 (e) but has to show that 1) he was licensed before the start of the project and 2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure. That, of course, is where the fight is going to be.

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