Business FinancesQuestion 661 of 690
A Responsible Managing Employee (RME) differs from a Responsible Managing Officer (RMO) in that an RME must:
a.Be a 10% or greater owner of the licensed entity
b.Be related to the qualifying entity's owners by blood or marriage
c.Hold a Class A general engineering license personally
d.Be a bona fide EMPLOYEE of the licensee who is permanently employed and actively engaged in the operation of the contractor's business not less than 32 hours or 80% of the total hours per week the business is in operation, whichever is less
Explanation
Under Bus. & Prof. Code §7068 and §7068.1, an RMO is an officer of a corporate licensee, while an RME is a bona fide employee permanently employed by the licensee. CCR Title 16 §823 requires an RME (or any non-owner qualifier) to exercise direct supervision and control at least 32 hours/week or 80% of operating hours, whichever is less. Ownership of 10% or more is what qualifies an RMO/qualifier to escape the hours rule (a bona fide owner is presumed to supervise). Family ties and engineering credentials are not §7068.1 requirements. Misclassifying a 'paper RME' is treated as license renting and is grounds for revocation.
Law Reference: Bus. & Prof. Code §7068.1Practice all 690 questions free — no signup required.
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