Legal Question in Construction Law in California

It depends upon whether in "doing construction work" you are an employee of the prime contractor or an independent subcontractor. Based on your question, I'd say you are probably in business and not an employee. To be safe, I suggest sending full particulars of your proposed arrangement to the questions-and-answers department at the Contractors' State Licensing Board and have them tell you how the line is drawn.

Do not contact the CSLB about this. Do not discuss this issue with anyone at the CSLB. The CSLB is not a friend or advocate for any contractor, and even less so for unlicensed persons. Representatives of the CSLB should be viewed by all contractors the same as one would a police officer investigating a crime. Anything you say will be used against you.

Performing construction work that requires a license, without having the appropriate license, can result in civil and criminal prosecution. The licensed contractor that hires an unlicensed person is subject to discipline by the CSLB, and possible fine and penalty from various other state agencies, including the EDD, DIR and CalOSHA. There is actually a multi-agency task force going to job sites looking for just this type of activity.

You mention the $500 limit. That is a commonly misunderstood rule. If the entire job (not just your portion), including materials, is $500, no license is necessary. A lot of handymen go around giving multiple invoices for small portions of work to try and get around the $500 limit. It does not work that way.

For you to perform work as you describe, you either need to get a license, or have the licensed contractor hire you as an employee.

Beyond the potential criminal and civil penalties, because you are not licensed, the contractor could refuse to pay you and there is nothing you could do about it. Or, the owner could refuse to pay the contractor for the portion of work you performed.