Are There Any Penalties for Contractors Hiring Unlicensed Subcontractors?

It is illegal for a licensed construction contractor in California to knowingly hire an unlicensed independent subcontractor to perform a service for which a license is required as an independent contractor if the person hired does not hold a valid state contractor’s license or isn’t really an independent contractor under California law.  Under Labor Code section 2750.5, the contractor can be assessed a civil penalty of $200 for each person contracted for each day of the contract!

In cases where contractors don't make reasonable efforts to check if their subcontractors are licensed, courts may assume that they knew the subcontractors weren't licensed. This means contractors need to be careful and make sure everyone they hire for licensed work has the right credentials. It's important for contractors to follow the rules to avoid penalties and ensure quality work on construction projects.

(See Link(s): Labor Code section 1021.5)