Work Exempt from Contractors License Requirement Increased from $500 to $1,000
Work Exempt from Contractors License Requirement Increased from $500 to $1,000
Since January 1, 2025, an unlicensed person in California has been able to take on jobs worth up to $1,000 rather than the $500 limit that had stood for decades. The change came in under Assembly Bill 2622 (Carrillo, Chapter 240, Statutes of 2024).
On the face of it that looks like good news for anyone doing small jobs without a license. In practice the exemption is narrower than it used to be, and the penalties for getting it wrong went up again in July 2026.
What AB 2622 actually changed
AB 2622 rewrote Business and Professions Code section 7048, the part of the law that covers minor or inconsequential work. The threshold for work that can be performed without a CSLB license moved from $500 to $1,000, counting labor and materials combined.
Two conditions are attached, and both have to be met:
The work cannot require a building permit of any kind
The unlicensed person cannot employ or hire anyone to assist with or perform the work
The CSLB set out both conditions in its AB 2622 implementation bulletin.
If either condition fails, a contractors license is required no matter how small the job is. A $600 job that needs a permit needs a licensed contractor. So does a $400 job where someone brings a helper along for the afternoon.
Both conditions are new. Under the old $500 rule there was no restriction on using help. So while the dollar figure doubled, the exemption itself got tighter for anyone operating with more than one pair of hands.
The threshold is an aggregate figure
A larger project cannot be broken into a series of smaller jobs to stay under $1,000. The CSLB looks at the total value of the work being performed, not the value of an individual invoice. Splitting a $4,000 remodel into five separate agreements does not create five exempt jobs.
Advertising has to disclose the lack of a license
Anyone advertising for work under the exemption has to state in that advertising that they are not licensed. That applies to business cards, vehicle signage, online listings and social media posts. Omitting it is a separate violation in its own right.
Penalties went up on July 1, 2026
This is the part most contractors have not caught up with. Senate Bill 779 raised the minimum civil penalties the CSLB can issue, effective July 1, 2026. The minimum fine for unlicensed activity moved from $200 to $1,500, with a ceiling of $15,000. Other specified violations now carry minimums of $500 or $1,500 depending on the offense, and the CSLB will adjust these figures for inflation every five years.
That sits on top of the criminal exposure. Contracting without a license is a misdemeanor under Business and Professions Code section 7028, and a first conviction carries a fine of up to $5,000, up to six months in county jail, or both. Penalties escalate on subsequent convictions.
There is also the commercial risk that catches people out. An unlicensed person has no legal standing to enforce payment for work that required a license. You can complete the job, invoice correctly and have no way to recover the money.
What this means in practice
If you are working close to the $1,000 line regularly, the exemption is not a business model. It is designed for genuinely minor work, and CSLB enforcement through its SWIFT teams is active, including jobsite sweeps and undercover operations.
If you have the experience behind you, getting licensed removes the ceiling entirely and lets you take on permitted work, hire help and enforce your contracts.
Not sure whether your work needs a license?
We have been helping California contractors through the licensing process for more than 19 years.
If you are unsure whether the exemption covers what you do, or you are ready to apply, contact us today or call us on (800) 580-8129 and we will point you in the right direction.