Yes. Unless an exemption applies, acting as a contractor in California without a license, or under a license suspended for certain unpaid penalties or unresolved liabilities, is a misdemeanor, separate from any dispute over money or workmanship. The penalties climb with each prior conviction, and using a license number that is not your own currently valid one, with intent to defraud, is a separate crime.

The basic offense

Business and Professions Code section 7028(a) makes it a misdemeanor to engage in the business of, or act in the capacity of, a contractor in California while either unlicensed or performing licensed acts under a license suspended for failing to pay a civil penalty or comply with an order of correction, or for failing to resolve all outstanding final liabilities. The section contains no intent-to-defraud element. The question is whether you acted as a contractor without the required license and whether an exemption covered the work.

Penalties climb with each prior conviction

The penalty depends on how many times you have been convicted under this same section:

  • First conviction: a fine of up to $5,000, up to six months in county jail, or both (7028(b)).
  • Second conviction: the court must impose a fine of 20 percent of the contract price, 20 percent of the total paid to or at the direction of the unlicensed person, or $5,000, whichever is greater. The person must also serve at least 90 days in county jail, “except in an unusual case where the interests of justice would be served by imposition of a lesser sentence or a fine.” A court that imposes only a fine or less than 90 days must state its reasons on the record (7028(c)).
  • Third or later conviction: a fine of at least $5,000 and no more than the greater of $10,000 or 20 percent of the contract price or total payments, plus 90 days to one year in county jail. This penalty is cumulative to penalties under other California laws (7028(d)).

Subdivision (e) applies the same third-conviction penalties to a person who was named on a previously revoked license and was held responsible, in fact or under law, for an act or omission that led to the revocation.

For an unlicensed person, the indictment, information, or complaint must be filed within four years of the contract proposal, the contract, completion of the work, or abandonment of the work, whichever occurs last (7028(g)). After any conviction under this section, a person who used the unlicensed person’s services is treated as a crime victim eligible for restitution of economic losses, whether or not they knew the person was unlicensed (7028(h)).

A separate crime: misusing a license number

Business and Professions Code section 7027.3 applies to any person, “licensed or unlicensed,” who “willfully and intentionally uses, with intent to defraud,” a contractor’s license number that does not correspond to a currently valid license held by that person, such as another contractor’s number. It is punishable by a fine of up to $10,000, or state prison, or up to one year in county jail, or both, and this penalty is cumulative to penalties under other California laws. Because the statute permits either state prison or county jail, a conviction can be a felony, or a misdemeanor in the situations described in Penal Code section 17(b). Unlike section 7028, this offense requires proof that the use was willful, intentional, and meant to defraud.

Is there an exemption for small jobs?

The licensing chapter has several exemptions. For small jobs, the key one is the minor-work exemption in Section 7048, which, as amended effective January 1, 2026, exempts work on one undertaking or project, under one or more contracts, when the aggregate contract price for labor, materials, and all other items is less than $1,000 and the work does not require a building permit. The statute treats that work as casual, minor, or inconsequential. The exemption does not apply when:

  • the work is only part of a larger or major operation, by the same or a different contractor;
  • the operation is divided into contracts under $1,000, whether to evade the licensing law “or otherwise”;
  • the person advertises or puts out a sign, card, or other device that might indicate to the public that the person is a contractor or is qualified to engage in the business of a contractor; or
  • the person employs someone else to perform, or assist in performing, the work.

What actually decides these cases

Because the charge and the penalty tier depend on specific facts, what usually matters is:

  • Whether a valid license existed, and its status on each date the work was offered or done.
  • The number and dates of any prior convictions under section 7028, and whether you were named on a license that was later revoked and held responsible for the revocation.
  • The contract price and payments, since the second and third-conviction fines are tied to them. For hourly work, “contract price” means the total cost of the materials and labor furnished plus the cost of completing the work (7028(f)).
  • Whether the job meets every condition of the minor-work exemption, including permits, advertising, and whether anyone else helped.
  • Whether a license number on a bid, contract, or advertisement belongs to the person who used it, and how it got there.

Facing an unlicensed-contracting accusation, or a dispute over a license number? Law Offices of David S. Chesley can go through the contract, license history, and payment records with you and explain where you stand. Call (800) 755-5174 to set up a case review.