The $1,000 rule for unlicensed work in California (AB 2622)

AB 2622 took effect on January 1, 2025. Under it, work without a contractor license is allowed in California only when every one of these holds:

1. The total is under $1,000. Labor and materials added together.
2. No permit is required for the job.
3. No hired help. You do the work yourself.

The old ceiling was $500. Doubling it gave handymen more room on small repairs, but the permit and helper conditions stayed exactly where they were. A $700 job that needs a permit still needs a license. So does a $300 job where you pay a helper.

Treat this as a general summary of the rule rather than legal advice. CSLB can speak to your own facts.

The number that matters is the whole job: what you charge for labor plus what the materials cost. It is not your labor alone, and it is not just the invoice you send today.

If you are bumping against $1,000 often, or turning down jobs to stay under it, that is usually a sign the business has outgrown the exception.

Step outside the exception and California expects a license from the Contractors State License Board (CSLB) to build, repair, remodel or improve property. That covers jobs of $1,000 or more, any job that needs a permit, and any job where you bring on hired help. It applies whether you call yourself a handyman, a specialty trade or a general contractor.

Licensing is also how you get access to the work GCs and commercial owners hand out. They look up the license number before they sign anyone, and they check that the license class matches the job.

If you plan to license as an LLC, read the CSLB LLC insurance requirement before you file, because an LLC carries extra insurance and bond rules from day one.

• A $25,000 license bond. Every licensee carries it. It was $15,000 until January 1, 2023. A bond is not insurance: when it pays a valid claim, the surety collects from you. See license bond vs insurance.
• A workers' comp filing. Every licensee files a workers' comp certificate or an exemption with CSLB. Five classes need an active policy even with zero employees: C-8 concrete, C-20 HVAC, C-22 asbestos abatement, C-39 roofing and D-49 tree service. SB 216 would have required it for all licensees from 1/1/2026; SB 1455 (2024) moved that to 1/1/2028. More in workers' comp and 2028.
• Your license classes. The classes on your license say which trades you can contract for.
• Liability insurance. Required for LLC licenses. For everyone else, CSLB strongly recommends it, and GCs, commercial owners and many homeowners require it in the contract.

With a license you can bid above $1,000, pull permits and hire a crew. Those are the same jobs where people start asking you for proof of insurance.

GCs, and many homeowners, run the same quick check before signing:

• Is the license active, and does its class match the work?
• Are the bond and workers' comp status on the CSLB record current?
• Is there general liability behind the work, and can they get a certificate?

GCs commonly ask for $1M per occurrence and $2M aggregate, a certificate of insurance before you start, and often to be named additional insured. See the certificate of insurance guide. Homeowners on home improvement jobs also see an insurance notice in your contract; see the contract insurance notice.

Contractor GL is written around a licensed business and the trades it is licensed for. Your license classes tell the insurer what kind of work you do, and that shapes both the price and what the policy includes and excludes.

That is why the CalRisk Insurance Center online quote begins with your CSLB license number. We find your business in the CSLB public record, you confirm you are the owner, and you answer about a minute of questions. Quotes from A-rated programs then arrive on your board. GL and workers' comp are both quoted this way.

Still working toward your license? Call or text a licensed agent at (877) 940-4313 with your questions. Once your number is issued, start on the home page or look up your trade in insurance by trade.