From my friends at Davis-Stirling.com

I get the Davis-Stirling.com weekly newsletter; you should too...here's fair warning to any HOA's that want to use unlicensed contractors...it might seem cheaper at first, but in the end, it only costs. Central Coast Waterproofing is fully licensed and insured; we can name you as additional insureds, covering your HOA. Call Bill Leys for a free quote on your next decking job. 805-801-2380

Reprinted from
Davis-Stirling.com by Adams Kessler PLC

MORE LIABILITY FOR HIRING
UNLICENSED CONTRACTORS

A recent decision by the California Court of Appeal reinforces the importance of avoiding unlicensed contractors. If associations hire unlicensed contractors, they could be liable for wage and hour claims filed by employees of the contractor. Although the case involved a general contractor and its subcontractors, associations who hire unlicensed contractors can be deemed a "general contractor" and the unlicensed contractors as "subcontractors." This means that any unpaid workers will be considered employees of the association and the association will be liable for paying those workers, even it the association already paid the contractor. Sanders Construction v. Cerda (2009) 175 Cal.App.4th 430.

RECOMMENDATIONS. Homeowner association boards should verify each contractor's license with the Contractors State License Board. In addition it should get proof of insurance. Boards should also add a provision to their contracts requiring contractors to indemnify the association for any wage and hour claims by its employees.