By Grant Marcketta

At its September 19, 2024, meeting, CSLB discussed the implementation of AB 2622 (Carillo) (Chapter 240, Statutes of 2024), which amended sections 7027.2 and 7048 of the Business and Professions Code to raise the threshold of the Minor Work Exemption for unlicensed contracting from $500 to $1,000. Newsom signed the bill on September 14, 2024, and it goes into effect on January 1, 2025.

Introduced on February 14, 2024, by Assemblymember Juan Carrillo, the bill sought to raise the exemption cap from $500 to $5,000, considering that any unexempted, unlicensed contracting work is considered a misdemeanor by law.  At its April 17, 2024, meeting, CSLB denounced the bill in its entirety after receiving negative feedback from both Board members and members of the public. Vice Chair Michael Mark stated, “the $5,000 exemption [was] too high.” Other members were concerned that the bill would “encourage unlicensed activity and undermine the CSLB’s mission of licensure.” The Board voted to oppose the bill in its entirety, and Registrar Fogt stated he looked forward to continued dialogue with the author to produce a proposal that the Board could favorably receive.

At its June 13, 2024, meeting, the Board reviewed the amendments to AB 2622, which lowered the project value from $5,000 to $1,000 and included consumer protection limitations for which no work may be performed without a license under $1,000. The Board voted to support the bill and was willing to offer amendments to the author. The Senate amended the bill on June 27, 2024, requiring that a construction project valued below the $1,000 threshold does not require a building permit and stated that the $1,000 threshold does not apply to a person who employs another person to perform or assist in the work or advertises or puts out a sign or card or other device that might indicate to the public that the person is a contractor or that the person is qualified to engage in the business of a contractor.  Prior to the June 27, 2024, amendments, the CSLB issued a letter of support stating, “Despite increasing the exemption amount, the bill preserves public protection by restricting the exemption to specified minor work and activities. The exemption would not apply to work that requires a building permit, or behind-the-wall mechanical, electrical, and plumbing, nor would it apply to structural work and other specified public safety-related trades. Finally, the exemption would not apply if a worker is hired.”

Given that the legislative session had ended, and the Governor had already signed the bill at the time of the meeting, the staff made no position recommendations, and the Board took no official position on the final bill. CSLB staff plans to monitor consumer complaints between $500 and $1,000 to determine if any consumer harm is occurring as a result of increasing the exemption amount.