Business & LicensingQuestion 424 of 1632

An RME for a contractor company stops actually working for that company but allows the company to keep using his name to maintain the license. This arrangement is:

a.Unlawful, because an RME must be a bona fide employee who supervises
b.Lawful, provided the RME is paid a small monthly fee for the name
c.Lawful, because the company is otherwise properly insured and bonded
d.Lawful, provided the RME visits one of the job sites once a year

Explanation

§7068(c)(1) defines a responsible managing employee as an individual who is a bona fide employee of the applicant and is actively engaged in the classification of work for which that person is the qualifying individual, and §7068(c)(2) puts numbers on both halves: a bona fide employee is one permanently employed by the applicant, and actively engaged means working 32 hours per week, or 80 percent of the total hours per week the business is in operation, whichever is less. On top of that §7068.1(a) makes the qualifier responsible for exercising supervision and control of the construction operations. A name on the record with no hours behind it satisfies neither test, so the fee in (b) buys nothing, the insurance in (c) answers an entirely different requirement, and the annual site visit in (d) is nowhere near the 32-hour floor. §7068(f) makes the current qualifying individual file a statement verifying that capacity at every renewal, and §7068.1(e) makes the violation a misdemeanour with a fine of $3,000 to $5,000 for the qualifier personally.

Law Reference: Bus. & Prof. Code §7068(c)(1)-(2), (f); §7068.1(a), (e)

This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →

Practice all 1632 questions free — no signup required.

Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →

Related questions on this topic

Last reviewed: · editorial process

PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
Report