How to Get a Contractor’s License & Become Licensed to Work Legally
We’re often asked – how do you get a contractor’s license and become able to perform the work a contractor does?
The answer is, it depends. It depends on the type of work you are wanting to do and the state that you desire to work in. If you are a contractor with a license in one state, that may not automatically make you eligible to do the same type of work in another state.
To view the requirements for the different types of work, we have made articles that address the requirements on a state-by-state basis – you can also simply find the state you live in in the menu on the navigation bar to the right.
This article will explain the more overall steps, and you will then need to dig in deeper to find out the more specific requirements. Some states have a lot of licenses licensed at the state level, like California for example, while others have more lenient licensing requirements determined at a local level.
For instance, California has 44 different contractor classifications that they use, and you will initially only be able to apply to one of the prior to passing the necessary exams.
If you want to do work in another state than the one you’re currently licensed in, you will need to see if the two states have reciprocity programs and how you go about getting the right license there too. Doing work without the necessary licenses will normally result in a fine for first time offenders, but if you get caught again, the punishment becomes a lot more severe. Even if a homeowner owes you money, you may not be able to sue to get it if you did the work while being unlicensed, which is just another reason why it is so important to get the right licenses and certificates.
In addition to some states being more strict in which contractors they license, the individual requirements to obtain the different certifications will also vary, which is why reciprocity programs are often not available.
There is generally both an exam on law & business, which covers different areas, as well as the skill you’re applying for a license in. So if you are hoping to become a licensed electrician, you not only have to prove that you know the electrical trade, but that you know the legal aspects too. Some states will have the applicant prove the financial ability to sustain the business, as well as post a bond.
Since a lot of trade licenses require that you can prove a significant amount of experience, the contractor boards approving your application for taking a trade exam will usually require proof of experience from former or current employers.
There are some requirements that are nearly identical between states, while others will vary. The ones that generally are the same are included below:
- Prequalification for state projects: If you want to bid on a state project, prequalification is generally required and will be obtained through the Department of Transportation for the respective states.
- Out-of-state corporations: If you’re an out-of-state corporation wanting to do business in a state, you will need to register with the Secretary of State and obtain the necessary licenses.
- Proof of no disqualifying criminal history: You may have to explain previous violations and citations, and certain criminal offenses will disqualify you from obtaining the desired license. The background checks may vary depending on the state.
- Passport-sized photos: You need to provide the photos to be printed on your license.
- Be able to show your occupational licenses: You need to be able to show any licenses you have.
- Be legally allowed to work in the country: The different contractor boards will require you to present proof that you have legal residency in terms of U.S. citizenship or work permits.
- Age: You will need to be 18 to obtain the licenses and have either a high school diploma or something of equivalent status.
Other requirements to obtain the necessary licenses often include:
- State license bonds: You will need liability and workers’ compensation where you do business, but there are often bond requirements too. A contractor bond can be used by a homeowner when they have been financially affected by the work done by a contractor. It’s also a sign that you will do your absolute best at not making unethical decisions in the work provided.
- Business licenses: A lot of cities require that you register as a business intending to take on work in a specific geographical location.
- Tax authorities: Each state has different requirements and amounts they will ask you pay. Be sure to meet the requirements they present to you.
Prior to taking the necessary exams, you will need to submit an application to be approved to take the exam. Once it has been approved, you may proceed to take the required exams.