Construction Law Attorneys

RMO and RME What's the Difference?

RMO stands for Responsible Managing Officer and RME stands for Responsible Managing Employee. In order for a corporation or LLC to be licensed they must have either an RMO or RME. The RMO or RME are the qualifier of the license and they are responsible for exercising direct supervision and control of the employer’s (or principal’s) construction operations. If the qualifier is an RME, they must be a bona fide employee of the firm and may not be the qualifier on any other active CSLB license. The RME must be permanently employed by the firm and actively engaged in the operation of the contracting business at least 32 hours per week or 80 percent of the total business operating hours per week, whichever is less.

An RMO can merely be an officer of the entity with no ownership but may have to post an additional bond for his/her license. If the RMO has at least ten percent interest in the entity, a license bond is not needed. However, if the RMO owns less than twenty percent (20%) ownership, the RMO is restricted to being the RMO to one corporation.

The same person may serve as the qualifier for more than one active license at a time provided that one of the following conditions exists:

  • • There is common ownership of at least 20 percent of the equity of each firm for which they act as the qualifier; or
  • • The additional firm is a subsidiary of, or a joint venture with, the first firm (the parent company must have a CSLB license); or
  • • In the case of partnerships, corporations, or LLCs the majority of partners, officers, or members/managers are the same for each firm.

Even if one of the above conditions exists, a person may act as the qualifier for no more than three firms in any one-year period.