By California law all businesses or individuals intending to construct, alter, build, or excavate: highways, roads, parking facilities, railroads, or any other structure in California must be licensed by the Contractors State License Board (CSLB) if the total cost (labor & materials) of their contract(s) on the project exceed $500.
Contracting without a valid license has always put you at risk; fines, possible prison sentences and non-payment for perfectly good work.
Now, new California State Law mandates that all businesses, or individuals caught contracting without a valid contractors license are subject to the return ALL MONIES RECEIVED, INCLUDING MONIES SPENT ON MATERIALS that went into the job.