Can an unlicensed contractor collect payment in California?

No — and the customer can claw back everything already paid. Business and Professions Code section 7031(a) bars any person who was required to hold a contractor's license from suing to collect compensation for the work, no matter how well it was performed and even if the customer knew of the unlicensed status. Section 7031(b) goes further: the hiring party may sue to disgorge all compensation paid to the unlicensed contractor — a remedy California courts enforce strictly, with a one-year limitations period from completion of the work. Licensure is required for jobs of $1,000 or more in combined labor and materials (raised from $500 by AB 2622, effective 2025, for work not requiring permits); the contractor must be duly licensed at all times during performance. There are narrow escape hatches, chiefly substantial compliance for lapses cured promptly (section 7031(e)). Consumers can verify any license instantly through the Contractors State License Board. Homeowners who hire unlicensed workers also risk being treated as employers for injury purposes.

Authority: Cal. Bus. & Prof. Code § 7031