Introduction
In California, contractors must maintain an active and compliant contractor’s license to operate legally. A key part of licensure is the “qualifying individual,” which is the person who possesses the experience and expertise required to hold the license. California Business and Professions Code sections 7121 and 7121.5 govern when a person may be a qualifying individual, and when they are prohibited from doing so.
A Qualifying Individual
Contractor licenses designate a qualifying individual responsible for supervision and control over the operations of the work. Due to the high level of responsibility that a qualifying individual has, the Contractors State License Board (CSLB) imposes strict standards on who may serve in this capacity, and when that authority is revoked.
California Business and Professions Code 7121
Under California Business and Professions Code section 7121, a person may be disqualified from acting as a qualifying individual if certain conditions are met. Specifically, the law applies to those who:
- Have been denied a license for any reason other than failure to provide sufficient documentation of satisfactory experience for a supplemental classification for an existing license;
- Have had their license revoked;
- Have a license under suspension;
- Have failed to renew their license while it was under suspension;
- Have been a partner, officer, director, manager, or associate of any business whose license application was denied, or whose license was revoked, suspended, or failed to be renewed while under suspension.
In such cases, these individuals are prohibited from serving as:
- Qualifying individuals;
- Officers, directors, associates, partners, managers, or any other controlling roles for any licensee.
California Business and Professions Code 7121.5
Section 7121.5 creates a mandatory disqualification for some individuals. This applies to a person who was the qualifying individual for a license that was:
- Revoked,
- Suspended, or
- Not renewed while suspended.
These individuals are prohibited from serving as:
- A qualifying individual, or
- An officer, director, partner, manager, associate, or any similar role for any licensee in the future.
Section 7121.5 applies even if the individual had no knowledge of, or did not directly participate in, the acts that led to the revocation or suspension.
CSLB may also discipline any licensee who knowingly associates with a person disqualified under section 7121.5 in any prohibited capacity, which includes hiring the individual in a managerial or controlling role.
California Business and Professions Code sections 7121 and 7121.5 Together:
Both sections work together to create a two-tiered system for qualifier accountability. Section 7121 allows CSLB to disqualify a qualified individual for misconduct, lack of supervision, or disciplinary issues. Section 7121.5 creates an automatic ban for a qualified individual if they were associated with a revoked or suspended license.
Both sections impose obligations and restrictions on qualifying individuals for contractor licenses. Contractors should review these statutes carefully and ensure their leadership meets CSLB requirements to maintain compliance and avoid disciplinary consequences.
Conclusion: Compliance Isn’t Optional—It’s Essential
At Simas & Associates, we’ve represented countless contractors navigating CSLB inquiries, license defense, and regulatory compliance issues. The recent changes to California law should not be ignored. They represent a turning point in how the state views contractor responsibility, labor practices, and consumer protection.
If you’re unsure whether your current setup complies with the new laws—or if you’ve been contacted by CSLB—get in touch. We’re here to help you protect what you’ve built.