An unpaid wage judgment sitting in a drawer can now become a suspended or revoked California contractor’s license. The case where you defend that license may not be a CSLB administrative case at all. It may be the Attorney General’s civil lawsuit, with no separate licensing hearing afterward.
AB 1002 created a new court route to your license
AB 1002 added Business and Professions Code section 7036. It did not amend an existing section. The law took effect January 1, 2026, as Chapter 567, Statutes of 2025.
Assemblymember Gabriel authored the bill. Ahrens, Bryan, Harabedian, Kalra, Ortega, and Zbur coauthored it. The Assembly concurred in the Senate amendments by 73 ayes to 2 noes.
The official topic is “Contractors: failure to pay wages: discipline.” That discipline now can begin in civil court. The Attorney General may sue to have a court direct the CSLB registrar to suspend or revoke a license, deny a license application, or deny continued maintenance of a license.
That court order counts as disciplinary action for bond purposes under section 7071.8 and legal action disclosed on the license record under section 7124.6. It is not merely a private judgment. It lands on the public license record and reaches your bond, which is a different order of problem from the rising CSLB civil penalties arriving on their own schedule.
Any one of three wage grounds can trigger the lawsuit
Section 7036, subdivision (a), gives the Attorney General three separate grounds:
- You failed to pay workers the full wages they were entitled to under state law.
- You did not fulfill a wage judgment.
- You violated an injunction or court order concerning payment of wages.
Any one is enough. An unsatisfied wage judgment is its own ground. The Attorney General does not need to allege a fresh failure to pay wages after that judgment.
That matters for a shop cleaning up old payroll issues, the same file that holds the coming workers compensation requirement deadline for contractors. A judgment does not become harmless because the employee left or the disputed job ended.
The Attorney General’s lawsuit can be the licensing case
Subdivision (e) contains the line most summaries miss:
“Nothing in this section shall preclude or require the board to investigate a license for violations of this chapter pursuant to Sections 7011.7 and 7090 or require the board to afford notice or a hearing under the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.”
That Chapter 5 process is the Administrative Procedure Act track. It is the accusation and hearing before an administrative law judge that CSLB discipline normally runs through.
Section 7036 does not forbid the board from providing that process. It says the board is not required to provide it.
Now read that with subdivision (c). The board has 60 days after the initial complaint is filed to intervene as a matter of right. After that, it needs the court’s permission and must show good cause. If the board does not intervene, its decision is deemed consent to comply with the court’s order and to be subject to the court’s jurisdiction to enforce it.
Silence is consent. The room where you defend the license is the Attorney General’s civil case. Do not assume you will get another accusation, another discovery period, and another hearing before CSLB carries out the result.
The registrar gets advance notice, but you get no defense from a missed notice
The Attorney General must notify the registrar at least 30 days before filing the civil complaint. That gives the board time to consider whether it will participate.
Subdivision (b) then removes the argument you might have built on it: “The Attorney General’s failure to provide this notice shall not constitute a defense to the action.”
The notice protects the board’s opportunity to act. It does not give you an escape from the lawsuit.
Nor does the Attorney General’s case necessarily close every licensing issue. Subdivision (c) allows the registrar to proceed independently or at the same time against your license for violations not alleged in the Attorney General’s complaint. A win or a settlement on the pleaded claims does not dispose of different violations the registrar may pursue administratively.
The good faith exception only protects the wage-rate call
Subdivision (f) says a good faith mistake about which wage rate applies to a particular category of work does not violate section 7036. That is a classification-of-work question.
It is not a defense to paying nothing. It is not a defense to paying late. It is not a defense to leaving a wage judgment unsatisfied.
The subdivision names prevailing wages as an example, which is worth reading closely when a prevailing wage filing has already been moved onto the contractor. The reference sits inside the safe harbor, not in the grounds. It does not limit section 7036 to public works. Subdivision (a) reaches wages workers are entitled to “under state law” generally, and ordinary private residential and commercial service work is included.
That also makes the line between your payroll and your subcontractors worth keeping clean on paper. You already have to name each sub and give their license number and classification on request, so the records that answer that request should also make clear who was a licensed subcontractor on a job and who was on your payroll.
Older wage remedies did not give a court this direct route
Business and Professions Code section 7110.5 already required the registrar to initiate discipline within 18 months of receiving a certified copy of a Labor Commissioner finding of a willful or deliberate Labor Code violation. That route ran through the board, and the board initiated the discipline. AB 1002 starts with the Attorney General in civil court and can end with the board executing the court’s order.
Labor Code section 238, added by SB 588 in 2015, also attaches consequences to a final wage judgment left unsatisfied for 30 days. The employer has to stop doing business or post a surety bond. The bond tiers are $50,000 for judgments up to $5,000, $100,000 for judgments from $5,001 through $10,000, and $150,000 above $10,000. Violations carry a $2,500 penalty plus $100 per day, capped at $100,000.
As of January 1, 2026, that same unfulfilled judgment is independently grounds for a civil action aimed at the license itself.
Treat every wage complaint as a potential license file
Confirm that no unsatisfied Labor Commissioner or court wage judgment remains against your business or a predecessor entity. Resolve any that exist. Do not wait for an Attorney General complaint to surface one.
Keep the certified payroll and time records that show the rate you paid and the category of work you paid it for. Subdivision (f) only helps when you can show the wage-rate decision was made in good faith. Treat any letter from the Attorney General about wages as a licensing emergency, not an ordinary billing dispute to settle later.
A wage complaint often arrives first as a call from a former helper or apprentice to the office line rather than to you directly. Apply the same discipline you use for the details worth capturing on every electrical call: who contacted you, when, what amount they say is owed, which job it involved, and how you responded. That dated record is part of what proves the wage-rate decision was made in good faith.
