If you’ve decided to pursue a career as a contractor, you may have been surprised to learn about the licensing requirements. Basically, if you are a contractor planning on bidding on jobs in excess of $500, many states will require you to apply for and carry a license to do so.
While laws governing Contractors licenses vary from state to state, some like California require a contractor to demonstrate at least 4 years of journey-level experience in their trade, in addition to holding an active contractor bond and passing a certification exam to be eligible.
Experience used to satisfy this requirement must be verified by a responsible party deemed qualified to do so. Some examples of qualified parties include:
The party certifying an applicant’s qualifying experience must have firsthand knowledge of their work, typically in the form of having worked with them in the past.
Unfortunately, many of those just getting started as a contractor do not have the required experience to get licensed off the bat. This often leads to the question:
In short, you can oftentimes get a contractor’s license with no experience. In the following sections, we will go over a few ways that you can get a contractor’s license with no experience and detail the different licensing requirements of each state.
For those contractors hoping to start a business in a state that requires previous experience, there are a number of alternative options available.
Using California as an example, the following paths can help a new contractor get licensed without having the State-mandated experience pre-requisite.
In some states, the licensing authority allows an established contractor to pass their license to a new contractor upon retirement. While this allowance was intended to help family businesses pass responsibility through generations of ownership seamlessly, this technique is also occasionally used to simplify the transition process of acquisitions and takeovers.
It’s important to note that just because you are allowed to inherit the license of an established contractor without the pre-requisite experience required to get your own license, you will still need to pass the licensing exam in the state you are planning on doing business in.
Another way for an experienced contractor to start working without enough qualifying experience for a license is with the help of a Responsible Managing Officer (RMO) or Responsible Managing Employee (RME). Essentially, the law in California and a few other states allows a new contractor to “borrow” the license of another licensed contractor to maintain compliance.
By hiring a licensed RMO as a project manager or employing a licensed RME, a new contractor can operate as if they had a license of their own.
While there are never guarantees on the availability of this option and typically no concrete guidelines in place to determine eligibility, some state licensing boards have been known to waive experience requirements for applicants.
Because this is determined on a case-by case basis, there is no reliable way to determine if you will qualify for a waiver outside of speaking to your local licensing authority. That said, many state licensing boards have been known to grant these waivers in the past, and for many, this may represent the best chance of getting a contractor’s license with no experience.
If all else fails, one final option for getting a contractors license with no experience is to work your way up to qualifying. While this may not be a viable solution for a contractor looking to bid on jobs that require a license right away, you can still make a living while building up the experience required to qualify.
From working under a licensed GC as a subcontractor to working in an apprenticeship, there are many ways to keep earning while you’re building up your experience.
Most unexperienced contractors who are looking to get qualifying experience for licensing under their belt will start by working as an apprentice. Working under a skilled general contractor in an apprenticeship can help someone new to the contracting business learn a skilled trade and the ins and outs of the business.
For those who are already skilled in their trade and able to work on a project with little to no supervision, the best way to get qualifying experience for licensing is often by working as a “journeyman”. Essentially an artisan contractor (link) who lacks the full experience necessary to lead a project, a journeyman can earn accrue the experience to qualify for getting a contractor’s license by working on projects led by another licensed contractor.
After a few years of working as a journeyman, some people working towards a contractor’s license transition into working as a foreman or supervisor. While working as a foreman is not typically required to qualify for getting a contractor’s license, the responsibilities of both roles are similar and the experience can be helpful in preparing for the transition to a licensed contractor down the line.
Fortunately for new contractors, that there are some states that don’t require contractors to be licensed to bid on projects under a certain total cost (including labor). Other states only require contractors to register, with no formal certification process in place to stop a new business from bidding on jobs right away.
The current contractor licensing requirements for each state can be found here.
If you are getting serious about getting a contractors license and still have questions not answered in this guide, the National Association of State Contractors Licensing Agencies is a valuable resource.
As always, the contractor insurance experts at Tomins are also standing by to help answer your questions. We will work with you to understand the unique needs of your contracting business and design a custom-tailored policy that’s perfect for your situation.