8.3 Advertising Rules, Home Improvement Salespersons, and Subcontracting

Advertising Rules, Home Improvement Salespersons, and Subcontracting

Quick Answer: Show the license number on contracts, bids, estimates, business cards, letterhead, print ads, websites, and — at 72-point font or three-quarters of an inch under B&P § 7029.6 — on every commercially registered vehicle. An unlicensed person may advertise only for work where the aggregate contract price is less than $500 and must state in the ad that they are not licensed by the Contractors State License Board. Anyone soliciting or negotiating a home improvement contract away from the contractor's fixed place of business must be a registered Home Improvement Salesperson (HIS). And when you subcontract, the worker's license status decides the relationship: under Labor Code § 2750.5, an unlicensed person doing work that requires a license is conclusively presumed to be your employee.

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1. Where the License Number Must Appear

CSLB's advertising rules exist so a consumer can verify a contractor before money changes hands. The license number is required on:

• Contracts, written bids, and price estimates — including free estimates
• Business cards, letterhead, invoices, and proposals
• Print advertising of every kind: newspaper, flyers, door hangers, mailers, yard signs, magnetic signs
• Internet advertising: the company website, search advertising, directory listings, social media business profiles
• Commercially registered vehicles, per the specific rule below

There is no "small ad" exception for a licensee. If the advertisement solicits construction work, the number goes in it.

Vehicle Signage (B&P § 7029.6)

Every motor vehicle used in the construction business for which a commercial vehicle registration fee has been paid must display, in a clearly visible location, the business name and contractor license number in print type of at least 72-point font or three-quarters of an inch in height and width.

Note the two limits people miss. First, the trigger is commercial vehicle registration — a personal pickup that is not commercially registered is outside § 7029.6. Second, § 7029.5 is a different, larger 1-1/2-inch signage rule that applies to C-36 plumbing, C-45 sign, and C-57 well-drilling contractors. A C-39 roofer complies with § 7029.6.

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2. What an Unlicensed Person May Advertise

Advertising for construction work that requires a license, without holding one, is a misdemeanor. The only opening is the minor-work exemption:

• The aggregate contract price for labor, materials, and all other items must be less than $500; and
• The advertisement must state that the person is not licensed by the Contractors State License Board.

A person cannot split a $2,000 job into five $400 advertisements. CSLB's Statewide Investigative Fraud Team runs undercover sting operations built precisely on unlicensed advertising, and the Board may direct disconnection of telephone service used in unlicensed advertising.

Related Advertising Restrictions

• Do not advertise a classification you do not hold. A C-39 advertising "general remodeling" is inviting a § 7117.6 action for acting in a classification other than the one held.
• Do not advertise as bonded or insured in a way that implies protection the consumer does not have. The $25,000 license bond protects consumers in limited circumstances; it is not a warranty of workmanship.
• A fictitious business name must be registered with CSLB and appear on the license before it is advertised.

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3. Home Improvement Salespersons

A Home Improvement Salesperson (HIS) is a person employed by a licensed contractor who solicits, sells, negotiates, or executes home improvement contracts at a place other than the contractor's fixed business establishment. Roofing sales is the textbook case: a canvasser knocking doors after a hailstorm is an HIS.

• Registration is required with CSLB before soliciting. It is not a license and confers no authority to contract in the salesperson's own name.
• An HIS may be registered to more than one licensed contractor, but each employing contractor must be on the registration.
• The contract must identify the salesperson by name and HIS registration number.
• An HIS may not collect payment in their own name; funds belong to the licensed contractor.
• The employing contractor is responsible for the salesperson's conduct — misrepresentations by a canvasser are the licensee's disciplinary exposure.

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4. Subcontracting

The Specialty Contractor's Boundary

A C-39 roofing contractor may take a prime contract, but all work outside the roofing specialty must be performed by an appropriately licensed subcontractor (B&P § 7059). If a reroof requires structural framing repair, HVAC curb modification, solar panel removal and reset, or electrical work at a fan, those scopes go to licensed subs — or the contractor obtains the additional classification.

Doing the work yourself outside the classification is a separate cause for discipline under B&P § 7117.6.

Hiring an Unlicensed "Sub" — Two Independent Consequences

1. B&P § 7118 — discipline. Contracting with an unlicensed contractor for work requiring a license is a cause for disciplinary action against the licensee.
2. Labor Code § 2750.5 — the crew becomes your employees. Any person performing services for which a license is required, who does not hold a valid license, is conclusively presumed to be an employee rather than an independent contractor. There is no rebuttal. The practical consequences land hard on a roofing contractor:
   • You owe payroll taxes and withholding on every dollar paid to that crew
   • You owe wages and overtime under California law
   • The crew is on your workers' compensation policy — and if you carried none for them, an injury becomes an uninsured claim, a Labor Code § 3700.5 misdemeanor exposure, and a stop order
   • Your license is exposed to suspension for failure to secure workers' compensation

Documenting a Legitimate Subcontract

Before a sub sets foot on the roof, collect and file: a current CSLB license check with classification and status, a certificate of workers' compensation insurance naming the sub as insured, a certificate of general liability with your firm as additional insured, the written subcontract with scope and price, and — where your firm is the one being paid — the sub's preliminary notice posture so you are not surprised by a lien from someone you never hired.

Independent Contractor Classification Beyond Licensing

For workers who are not performing licensed contractor work — a bookkeeper, a marketing consultant — California applies the ABC test codified at Labor Code § 2775. The hiring entity must prove all three: (A) the worker is free from control and direction in fact and under the contract; (B) the work is outside the usual course of the hiring entity's business; and (C) the worker is customarily engaged in an independently established trade of the same nature. For a roofing company, prong B alone defeats any attempt to call a roof installer an independent contractor.