A state-issued license required to legally perform construction, contracting, or specialty trade work above a specified dollar threshold.
A contractor license is a government-issued credential required to legally perform construction or specialty trade work in most states. Requirements vary by state and trade: some states require licensing for any contractor doing work above a low dollar threshold ($500 in California); others are less restrictive. California requires state licensing through the Contractors State License Board for most construction work over $500.
Contractor licensing typically requires proof of experience, passing a written exam (covering trade knowledge and business law), proof of insurance and bonding, and payment of licensing fees. License renewal and continuing education requirements vary by state and trade.
The consequences of unlicensed contracting are significant: in California, for example, an unlicensed contractor cannot legally collect payment for work done, can be required to return any money already paid, faces civil and potentially criminal penalties, and has no right to file a mechanics lien for unpaid work. Working with a licensed contractor as a client also matters: if an unlicensed contractor causes damage, your insurance coverage may be affected.