§ 7068.1 — California Business & Professions Code

Qualifications & Responsibilities of Licensed Contractors

Section 7068.1 outlines the supervision, control, and qualification requirements for contractors and the individuals who qualify a contractor’s license.

(a) Responsibilities of the Qualifying Individual

The qualifying individual must exercise supervision and control over their employer’s or principal’s construction operations to ensure compliance with:

• The California Business and Professions Code

• All rules and regulations of the Contractors State License Board (CSLB)

A qualifying individual may not act as the qualifier for more than one individual or firm unless one of the following conditions exists:

1. Common Ownership
   At least 20% equity ownership is shared between each individual or firm the person qualifies.

2. Subsidiary or Joint Venture Relationship
   The additional firm is a subsidiary of, or in a joint venture with, the first firm.
   A “subsidiary” is any firm with at least 20% equity owned by another firm.

3. Common Management
   For firms under Section 7068(b)(2), (3), or (4), a majority of partners, officers, or managers must be the same across all firms.

(b) Limitation on Number of Firms

A qualifying individual may act as the qualifier for no more than three firms within any one-year period, regardless of the exceptions listed above.

(c) Definitions

For the purposes of this section:

1. “Firm”
   Includes partnerships, limited partnerships, corporations, LLCs, or any organization described in Section 7068.

2. “Person”
   Refers only to natural persons, despite the broader definition in Section 7025.

3. “Supervision or Control”
   Means direct supervision or control, or monitoring and being available to support those with delegated authority.

4. “Direct Supervision or Control”
   Includes any of the following:

   • (A) Supervising construction

   • (B) Managing construction activities through technical or administrative decisions

   • (C) Checking jobs for proper workmanship

   • (D) On-site construction supervision

(d) Documentation Requirements

The CSLB may require applicants or licensees to provide detailed information describing the qualifying individual’s duties related to supervision and control.
This may include:

• An employment duty statement

• Additional documentation prepared by the qualifier’s employer or principal

Failure to provide this information constitutes a violation.

(e) Penalties for Violation

Violation of Section 7068.1 may result in:

• Disciplinary action

• Misdemeanor penalties, including:

  • Up to 6 months in county jail

  • A fine between $3,000 and $5,000

  • Or both jail and fines