California does not have a single statute called the “Little Miller Act.” The payment bond and the claim process live in the Civil Code, while performance bonds and bid security come from the Public Contract Code and depend on who is awarding the contract. This guide pulls the pieces together for contractors bidding California public work and for the subcontractors and suppliers who rely on the bond to get paid.
This article is general education, not legal advice. Statutes change, and many awarding bodies add their own requirements in the bid documents. Confirm the rules for your project with the awarding agency or a California construction attorney.
The Payment Bond: Civil Code 9550 and 9554
The core of California’s Little Miller Act is Civil Code section 9550. A direct contractor awarded a public works contract involving an expenditure in excess of $25,000 must give a payment bond to the public entity before commencement of work. The public entity has to say in its call for bids that a payment bond is required for contracts over $25,000. Design professionals are not treated as direct contractors and do not have to give the bond.
Civil Code section 9554 sets the terms of the bond:
- Amount: not less than 100 percent of the total amount payable under the contract.
- Form: it must be an actual bond, not a deposit in lieu of a bond.
- Surety: it must be executed by an admitted surety insurer.
- Coverage: if the direct contractor or a subcontractor fails to pay, the surety pays the persons entitled to claim under Civil Code 9100, certain amounts due under the Unemployment Insurance Code, and a reasonable attorney’s fee fixed by the court in an action to enforce the bond.
Section 9550 does not apply to contracts with a “state entity.” Those contracts fall under Public Contract Code section 7103, which uses the same $25,000 trigger and requires a payment bond of not less than 100 percent of the contract amount. Either way, on California public work over $25,000, plan on a full-value payment bond. This matches our payment bond requirements by state table.
Who can claim on the bond
Under Civil Code section 9100, these persons may make a claim against the payment bond (or give a stop payment notice) if they are not paid in full:
- A person who provides work authorized by a direct contractor, subcontractor, architect, project manager, or other person in charge of the project, which typically includes subcontractors and material suppliers.
- A laborer.
- A person described in Public Contract Code section 4107.7.
The direct contractor itself cannot make a payment bond claim under these provisions. Its remedies against the public entity come from the contract and other law.
Performance Bonds: Set by the Awarding Body
Unlike the payment bond, the performance bond in California is not governed by one statute with one threshold. The requirement comes from the Public Contract Code provisions that apply to the particular awarding body, and from the bid documents. Two examples:
- State contracts. For work under the State Contract Act, Public Contract Code section 10221 requires separate performance and payment bonds executed by an admitted surety insurer, not deposits in lieu of bonds. Section 10222 provides that each bond must equal at least one-half of the contract price, subject to listed exceptions, including the payment bond rule in Civil Code 9554.
- County contracts. Under Public Contract Code section 20129, the contractor awarded a county contract under those provisions must execute a bond approved by the board for the faithful performance of the contract. That section does not set a percentage, so the amount comes from the county’s bid documents.
Cities, districts, and charter cities each operate under their own code sections, charters, or local rules. Many California public owners ask for a performance bond equal to 100 percent of the contract price, but that is common practice rather than a statewide rule, so read the bid documents before you price the job. Our performance bond requirements by state table notes the same point: in California the performance bond is set by the awarding entity, separately from the $25,000 payment bond trigger.
Bid Security
Bid security rules also vary by awarding body. For cities, Public Contract Code section 20170 requires each bid to be accompanied by one of four forms of bidder’s security:
- Cash
- A cashier’s check made payable to the city
- A certified check made payable to the city
- A bidder’s bond executed by an admitted surety insurer, made payable to the city
Section 20171 sets the amount at at least 10 percent of the amount bid, and a bid without the security is not considered. Under section 20172, if the successful bidder fails to execute the contract, the bidder’s security is forfeited to the city, except as the sections that follow provide.
The county provision (PCC 20129) and the community college district provision (PCC 20651) list the same four forms of security but do not set a percentage in those sections, so the amount is stated in the bid documents. Ten percent is common. A bid bond is usually the most efficient choice because it does not tie up cash, and once your bonding line is established, our bid bonds are always free.
The 20-Day Preliminary Notice
For subcontractors and suppliers, the preliminary notice is the step that most often decides whether a bond claim is valid. Under Civil Code section 9300, before giving a stop payment notice or asserting a claim against the payment bond, a claimant must give preliminary notice to:
- The public entity, and
- The direct contractor to which the claimant provides work.
Laborers, and claimants that have a direct contract with the direct contractor, do not have to give preliminary notice. For everyone else, compliance is a prerequisite to a valid stop payment notice, and compliance with section 9300 (or section 9562) is a prerequisite to a valid payment bond claim.
Timing. Civil Code section 8204 requires the preliminary notice to be given no later than 20 days after the claimant first furnishes work on the project. A late notice is still allowed, but it only protects work provided within 20 days before the notice was given and anytime afterward. Anything earlier is unprotected. The simple rule: send the notice at the start of every California public job, not when payment slows down.
Civil Code section 9560 provides a fallback for a claimant that did not give preliminary notice: it may enforce the bond claim by giving written notice to the surety and the bond principal within 15 days after a notice of completion is recorded, or within 75 days after completion if no notice of completion is recorded. Treat it as a last resort, not a plan.
Deadlines to Sue on the Payment Bond
Under Civil Code section 9558, a claimant may sue the surety on the payment bond any time after it stops providing work, but no later than six months after the period in which a stop payment notice may be given under section 9356. That period, under Civil Code section 9356, ends:
- 30 days after a notice of completion, acceptance, or cessation is recorded, or
- 90 days after cessation or completion, if no such notice is recorded.
The public entity, not the claimant, records the notice of completion, and it may do so within 15 days after completion (Civil Code 9204). Because the clock depends on what the owner records and when, claimants should watch closeout closely. For the broader claim process, see our guide to payment bond claims.
Stop Payment Notices in Brief
California gives unpaid claimants a second remedy on public work: the stop payment notice, given to the public entity, which reaches the construction funds the entity still holds. It runs on the same 30-day/90-day window in section 9356 and requires the same preliminary notice. Under Civil Code section 9502, a suit to enforce a stop payment notice may be filed any time after 10 days from the date the notice is given, but no later than 90 days after the stop payment notice period expires. If no suit is filed in time, the notice lapses and the withheld funds are released.
The Surety Must Be Admitted in California
Both Civil Code 9554 and Public Contract Code 10221 require bonds executed by an admitted surety insurer, and the city bidder’s bond under PCC 20170 must be as well. Code of Civil Procedure section 995.120 defines an admitted surety insurer as a corporate insurer, or a reciprocal or interinsurance exchange, that holds a certificate of authority from the California Insurance Commissioner to transact surety insurance in the state. If the surety is challenged or the bond must be approved, CCP section 995.660 lets the surety establish its sufficiency with documents such as its power of attorney, certificate of authority, and recent financial statements. Before you submit a bond on California public work, confirm the surety is admitted in California.
Related California Requirements
CSLB contractor license bond
Separate from any project bond, a California contractor needs a $25,000 contractor’s bond on file with the Contractors State License Board under Business and Professions Code section 7071.6, the amount that took effect January 1, 2023 under Senate Bill 607. It protects consumers and unpaid employees, not the public owner on a specific job. Our guide to license and permit bonds for contractors covers it in more detail.
DIR public works registration
According to the California Department of Industrial Relations, anyone who bids on or performs public work that requires prevailing wages, including subcontractors, must register with the DIR as a public works contractor. Registration costs $400 per fiscal year (July 1 to June 30), with two- and three-year options. The DIR’s registration FAQ describes a small project exemption for public works contracts that do not exceed $25,000 for new construction, alteration, installation, demolition, or repair, or $15,000 for maintenance.
The Bottom Line
On California public work over $25,000, expect a 100 percent payment bond from an admitted surety, a performance bond on terms set by the awarding body, and bid security that is often 10 percent. Subcontractors and suppliers should send the 20-day preliminary notice on every job and calendar the claim deadlines from the day a notice of completion, acceptance, or cessation is recorded (or from actual completion or cessation if none is recorded). Federal projects in California follow the federal Miller Act instead; see our Miller Act guide.
We work with 80+ top-rated sureties and bond contractors in all 50 states, including California. Standard contract bond premiums typically run 1–3% for qualified contractors, and approvals can come in as little as 24 hours. If you are bidding California public work and need bid, performance, or payment bonds, contact us today or call 877-914-0909.