Qualifying for a company you don’t own January 13, 2025

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com
****************
Qualifying for a company you don’t own
January 13, 2025
*
Qualifying for a company you don’t own
*
Ken,
License Qualifier Questions.
I am considering accepting a role as license qualifier for an out-of-state corporation which seeks to obtain a California C-10 (fire alarm) Contractors License.
While the out-of-state corporation probably won't continuously have active installation jobs in CA, they will be advertising their availability to perform work in CA and their sales reps will be always hustling for new work in CA, and these (advertising and sales) activities require an active license.
My role for the out-of-state licensee would be in addition to my present role as license qualifier for my own small licensed corporation.
The KK license qualifier agreement has been purchased by the out-of-state company and will be used.
In reviewing the California Contractors State License Board (CSLB) application to become the out-of-state licensee's license qualifier(form 13A-2a rev 5-2024), I note that the license qualifier, me in this case, must self-certify that they are (Q-14) a "bona fide employee" "permanently employed" by the licensee performing "direct supervision and control over construction activities", and that they (me) will be (Q-13) working "at least 32 hours a week" for the licensee.
    Questions:
(1) Should I assume that "bona fide employee" means being paid as a W-2 employee rather than a 1099 contractor?
(2) Should I expect to be paid for 32 hours of work per week, at minimum wage or more? In CA, that would be in excess of $2,000/mo. Presumably these 32 hours would be on top of the hours I already perform for my own licensed company.
(3) Should I expect that some real work be done, including, one would assume, ensuring that the licensee does not hire non-licensed sub-contractors or otherwise violate the California licensing requirements? I've done some research and conclude that the company presently operates in CA without a license and hires other non-licensed subs to perform Installations.
(4) What financial, legal, or reputational harm could befall a license qualifier in situations like this?
          As I consider whether or not to accept this role, can you comment on this scenario, and help me resolve my 4 questions?
    Anon in California
*
Response
*
          Holding a license for another company should raise plenty of concerns and questions. Licensed jurisdictions each have their own requirements and enforcement policies.  The duties of the license holder differ state to state, as do the qualifications of the license holder and the criteria for holding the license as it relates to the relationship with the company.
          California is one of the states with strict enforcement and you can expect a rigorous interview process.  Be honest in the relationship. I didn’t review the rules for California, so I’ll accept your statements.
          If you need to be employed that usually means W2, though when applying for the license you can explain that you and the company want to pay you as a 1099 independent contractor.  I would suggest letting the agency know that if necessary you will be employed and paid W2.
          You will need to agree to work 32 hours per week, but you will have a managerial role so I don’t think you must be paid hourly.  Your manager compensation will be a salary and I believe can work out to less than minimum wage [though I am not in K&K’s Employment Department].
          The Qualifier Agreement provided by K&K provides for a monthly fee and if you have to actually do anything an hourly rate, which will exceed minimum wage.  Doing anything would include apply for the license and following up with that application; dealing with any issues raised by the licensing agency and doing any work that is required of you to properly perform your licensed activities.  If your separate company does subcontracting work for the company you license it will be an independent contractor; that company will be paid as a 1099 contractor.
          As the license holder you will be responsible for all licensed activities.  If you or the company you license fail to adhere to license requirements you risk, suspension or revocation of your license, and not just the license for the company but the license for your own company; you won’t lose one and not the other.  You risk civil penalties and fines from the licensing agency and potential criminal prosecution.  Bottom line is that the license holder needs to take the responsibility seriously.
The company needs to be careful as well, because in addition to the above consequences the company could find itself ineligible to continue licensed activities in the state, and that could potential carry over to other states.  Follow the rules, the specific provisions in the K&K Qualifier Agreement, and you and the company should be fine.
  The Alarm Exchange has a category for license holders looking to qualify for a company and companies looking for qualifiers. You are all at liberty to list on The Alarm Exchange.  For those preferring a bit of anonymity and discretion K&K's License Coordinator Eileen Wagda maintains a current list of qualifiers and companies; you can get on Eileen's private list by contacting her at 516 747 6700 x 312

STANDARD FORMS  Alarm / Security / Fire and related Agreements
click here: www.alarmcontracts.com
*
CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
*
ALARM ARTICLES:  You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles  updated daily
THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily
*
Wondering how much your alarm company is worth?
Click here:  https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth

Getting on our Email List / Email Articles archived:
  Many of you are forwarding these emails to friends or asking that others be added to the list.  Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com
**********
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com