Contractors’ Qualifiers Are Not All Created Equal

Corporations seeking or holding a license with the California
Contractors State License Board (CSLB) must identify a qualifier—an
officer or employee who is qualified for the same license classification
as the classification being applied for.  Bus. & Prof. Code
§ 7068(b)(3).  The qualifying officer or employee is the representative
of the corporation that will obtain or has obtained the license after
completing the necessary application and passing the required exams. 
Corporations must make the decision to use a Responsible Managing
Employee (RME) or a Responsible Managing Officer (RMO).  But RMEs and RMOs are not the same!

Qualifiers

All qualifiers are responsible for “exercising that direct supervision and control
of his or her employer’s or principal’s construction operations as is
necessary to secure full compliance” with the rules and laws relating to
the qualifier’s company’s construction operations.  Id.
§ 7068.1(a) (emphasis added).  Direct supervision and control, in turn,
“includes any one or any combination of the following activities:
supervising construction, managing construction activities by making
technical and administrative decisions, checking jobs for proper
workmanship, or direct supervision on construction job sites.”  Cal.
Code Regs. tit. 16, § 823(b).  Actual, physical presence on a job site
is not requiredSee Buzgheia v. Leasco Sierra Grove,
60 Cal. App. 4th 374, 381 (1997).  An applicant using a qualifier must
submit detailed information on the individual’s duties and
responsibilities for supervision and control of construction
operations.  Cal. Bus. & Prof. Code § 7068.1.  A qualifier who fails
to exercise the necessary level of direct supervision and control may
be guilty of a misdemeanor and subject to a fine, imprisonment, or
both.  Id. § 7068.1(e).

RMOs and RMEs

An RME is defined as a “bona fide employee” of the applicant who is
“actively engaged” in the type of work for which that person is the
qualifier.  Cal. Bus. & Prof. Code  § 7068(c).  A bona fide employee
is “an employee who is permanently employed by the applicant and is
actively engaged in the operation of the applicant’s contracting
business for at least 32 hours or 80% of the total hours per week such
business is in operation, whichever is less.”  Cal. Code Regs. tit. 16, §
823(a).

Unlike for an RME, section 7068 does not expressly define an RMO. 
Further, the regulation defining bona fide employee and setting the 32
hour/80% weekly hour requirement limits itself to “employee” and makes
no mention of “officer,” indicating that an RME is qualitatively
different from an RMO, and does not have the same time requirements.  See Cal. Code Regs. tit. 16, § 823(a).  Consistent with this view, the CSLB’s Blueprint for Becoming a Licensed Contractor discusses the time requirement only with regard to RMEs, and appears to exclude RMOs from the requirement.

A CSLB corporate licensee should choose carefully when selecting a
qualifier.  Choosing an RMO over an RME may help avoid harsh penalties
when supervisory time drops below the 32 hour/80% requirement, but an
RMO must still exercise the necessary level of direct supervision and
control.

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