CSLB fines went up on July 1. The cheapest citation now starts at $500.

Short answer: SB 779 rewrote the civil penalty ranges in the Contractors State License Law, and the new numbers became operative July 1, 2026. Unlicensed activity now carries a minimum of $1,500 instead of $200. A routine citation against a licensed contractor now starts at $500. Three violations that catch otherwise legitimate shops, hiring an unlicensed sub among them, carry a $1,500 minimum and a $30,000 maximum. The board can also raise all of these for inflation every five years without new legislation.

This is not about people working out of a truck with no license. It is about the paperwork violations a licensed C-10 can pick up on a normal week, which just got more expensive.

What SB 779 actually changed

Two sections of the Business and Professions Code got new numbers, and both were written to become operative on July 1, 2026 rather than on the usual January 1 date. That delay is why this one slipped past a lot of people. The CSLB announced it in a December 2025 bulletin alongside the January 1 changes, and then it sat quiet for six months.

Section 7028.7, unlicensed activity. This is the civil penalty for acting in the capacity of a contractor or salesperson without a license. The old text read “not less than two hundred dollars ($200).” It now reads “not less than fifteen hundred dollars ($1,500).” The $15,000 maximum did not change. The same section also reaches responsible officers and employees of public entities that award contracts to unlicensed contractors.

Section 7099.2, citations against licensed contractors. This is the one that matters to you. The current text sets:

• A general range of not less than $500 and not more than $8,000 for a citation.
• An enhanced range of not less than $1,500 and not more than $30,000 for violations of Sections 7110, 7114, or 7118.

Before this, the general citation had no statutory floor at all. An inspector could write a small number for a small problem. That option is gone.

The three enhanced sections, in plain English

The $1,500 floor does not attach to random violations. It attaches to three specific ones, and it is worth knowing exactly what they say, because two of them are easier to trip than most electricians assume.

Section 7118 is one sentence: “Entering into a contract with a contractor while such contractor is not licensed as provided in this chapter constitutes a cause for disciplinary action.”

Read that again. It does not require intent. It does not require that anything go wrong on the job. Signing a contract with an unlicensed contractor is the violation. If you sub out low voltage, trenching, concrete for a pad, or drywall patch after a rough-in, and that sub’s license lapsed last month, you are inside 7118. The minimum just became $1,500.

Section 7114 covers aiding or abetting an unlicensed person to evade the license law, conspiring with one, or allowing your license to be used by an unlicensed person. Subdivision (b) adds that a licensee found in violation can be ordered to pay an injured party, “including, but not limited to, payment for any injury resulting from the acts of the unlicensed person.” So the citation is not the whole exposure.

Section 7110 is willful or deliberate disregard and violation of the building laws. It runs through a list, and two entries on that list should get your attention. Subdivision (h) covers “any state or local law relating to the issuance of building permits.” Subdivision (c) covers “the safety laws or labor laws or compensation insurance laws.” The permit one is the practical risk. Starting a service change on a Friday and pulling the permit Monday is a habit in this trade, and it is the habit that lines up with 7110.

Check the license, not the invoice

The fix for 7118 is unglamorous and it is genuinely the highest-value thing in this article: verify the license before you sign, and verify it again if the job runs long.

CSLB license status is free to look up and takes about thirty seconds. What you are checking is not just that a number exists. You want the status to be active, the classification to actually cover the scope you are handing over, and the workers’ compensation coverage to be on file rather than exempt if that sub is bringing a crew.

A lapsed license is the common failure, not a fake one. Licenses go inactive for a missed renewal or a workers’ comp certificate that did not get filed. The sub often does not know. You are the one holding the 7118 exposure, so the check is yours to run.

If you are on a home improvement job, there is now a second reason to have this information at hand. SB 517, effective January 1, 2026, requires contractors using subcontractors on home improvement projects to disclose the sub’s name, contact information, license number, and classification on request. The prime contractor stays responsible for the project, and subcontractors and home improvement salespersons can still face discipline of their own. If a homeowner asks and you cannot answer, you have a problem that starts as a customer service failure and does not necessarily stay one.

Workers’ comp is a separate and much larger number

Do not fold workers’ compensation into the SB 779 discussion, because the figures there are an order of magnitude different and they came from a different bill.

SB 291 amended Section 7125.4 effective January 1, 2026. Employing workers subject to workers’ compensation coverage without maintaining that coverage now carries a minimum civil penalty of $10,000 per violation for a sole owner licensee and $20,000 per violation for a partnership, corporation, limited liability company, or tribal business licensee. Subsequent violations can add penalties up to $30,000 per occurrence. The section also carries misdemeanor liability for a license qualifier who commits or fails to prevent the violation.

SB 291 also directs the board to establish a process to verify eligibility for the workers’ compensation exemption and to report that process to the Legislature by January 1, 2027. If you carry the exemption because you genuinely have no employees, expect the documentation standard to tighten. We wrote separately about the workers’ compensation deadline reshaping exempt status, and this verification requirement is the enforcement side of the same trend.

The escalator is the part nobody is talking about

SB 779 did not just raise the numbers once. Both sections now let the board adjust the minimum penalties every five years based on changes in the California Consumer Price Index, rounded in multiples of $100, or $1,000 for penalties above $1,000.

That means these floors move on their own from here. There is no next bill to watch for and no legislative debate to follow. Whatever you learn today about the minimums is accurate until the board runs the adjustment, and then it is quietly wrong. Build the habit of checking the current figure rather than memorizing it.

Two more January changes that create citation exposure

While you are updating your paperwork, two other 2026 laws affect the documents you hand a residential customer.

AB 1327 requires contractors working in home improvement to include their email address in home improvement contracts and to allow buyers to cancel by email. Contracts must also include a telephone number to help the buyer locate and complete the Notice of Cancellation. If that notice is missing, the consumer can file a complaint with CSLB.

AB 1002 jointly authorizes the Attorney General and CSLB to bring civil actions to suspend, revoke, or deny a license for failing to pay workers or to comply with a wage judgment or court order. The AG has to notify CSLB before starting such an action, and CSLB can intervene or collaborate.

Neither of these is a penalty increase. Both of them create new ways for a file to get opened on you, and an open file is what leads to a citation carrying the new floor.

What to do this week

• Pull the license status on every sub you currently use. Active status, correct classification for the scope, workers’ comp on file. Save a dated screenshot with the job file.
• Add a license check to your subcontract process, not to your memory. If it is not a step someone performs, it will not happen on the busy week when it matters.
• Update your home improvement contract template for the AB 1327 email and telephone requirements and the SB 517 disclosure notice. This is a template change you make once.
• Fix the permit-later habit. Section 7110 subdivision (h) is specifically about laws relating to the issuance of building permits, and it sits in the $1,500 to $30,000 tier.
• Confirm your workers’ comp status is documented, not just true. The verification process is being built now and it will ask for evidence.

Where the phone comes into this

Most of these violations start the same way, with a job that got scoped in a hurry. A customer calls, the work sounds simple, you commit to a start date on the phone, and the license check and the permit both become things that happen after the truck is already rolling.

An intake process that captures the scope properly before you commit is what buys back the day you need to do the paperwork correctly. Ask whether a permit is likely, whether another trade is already on site, and whether the work extends past your own classification. Those three answers tell you whether this job needs a sub and a permit, which is exactly the job where 7118 and 7110 live. Knowing it on the call instead of on the site visit is the whole difference.

None of this is dramatic. It is a license check and a contract template. It is just that as of July 1, skipping either one costs at least $1,500.