New Contracting Law for Qualifiers (RMO/RME/RMM) in Effect January 1, 2022
AB 830 (Flora) took effect on January 1, 2022 and tightened up what the CSLB expects from a qualifying individual. More than four years on, it is still the rule that catches out companies relying on a qualifier who is not genuinely involved in the business.
If you are applying for a license through an RMO, RME or Responsible Managing Member, this is what the Board is looking for.
What AB 830 changed
The bill amended Business and Professions Code sections 7068 and 7068.1 and did three things.
It defined supervision and control. The qualifier has to be exercising direct supervision or control of construction operations, or monitoring those operations and being available to assist anyone the supervision has been delegated to.
It defined what actively engaged means for an RME. The qualifier has to be a bona fide employee, permanently employed by the licensee, and involved in the operation of the business for at least 32 hours a week or 80 percent of the total hours the business operates, whichever is less.
It authorized the CSLB to require an employment duty statement. This is prepared by the employer or principal and sets out the qualifier's duties and responsibilities and how they exercise supervision and control.
Is there a CSLB form for the duty statement?
Not a standalone one. The Board updated its qualifier applications to reflect AB 830, but there is no published template with prescribed wording, so the statement is drafted by the employer if they’re requested to submit one.
In practice a duty statement should cover the qualifier's job title and where they sit in the business, their hours, which projects and operations they supervise, how that supervision is exercised day to day, and what authority they hold over bidding, contracts and hiring.
Vague statements get applications sent back. The more specific it is, the smoother the review.
Why the Board pushed this through
AB 830 was aimed squarely at absentee qualifiers, the long standing practice of paying someone to lend their license to a company they have no real involvement in. The CSLB has run task forces on RMO-for-hire arrangements for years, and AB 830 gave it a clearer legal test to apply.
The other limits still apply alongside it. An RME can qualify only one active license at a time. A qualifier can generally act for no more than three licensed firms in any one year period, and going beyond a single firm requires a common ownership interest of at least 20 percent.
The consequences of getting it wrong
Failing to meet the requirements of section 7068.1 is grounds for disciplinary action against the license, and it is punishable as a misdemeanor. That exposure sits with both the company and the qualifier.
There is also a timing trap worth knowing. If your qualifier disassociates, you have 90 days to get a replacement approved. Miss it and an active license is automatically suspended.
Questions about your qualifier arrangement?
Whether you are appointing an RMO or RME for the first time, replacing one, or you are not sure your current setup meets the active engagement test, we can look at it with you. We have been helping California contractors for more than 19 years.
Call us now on (800) 580-8129 or get in touch and we will talk it through.
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