Did you know that according to the Oregon state government, there is a cutoff range for the work you can do without having a contractor’s license in Oregon? That cutoff is $1,000. Not only does this rule keep your payment opportunities under $1,000, but it also dictates the level of complexity in projects that you can take on.
In Oregon, without a license, you can only do minor projects or basically, most things that aren't structurally-based. To those that want to pursue becoming licensed in the state, this could be enough motivation so that you won't have a cap on the types of work that you can take. Let alone, the money that they can make from it.
There are about 1,638 general contractors throughout the state of Oregon and exactly 41,000 construction firms in the state. This leaves a lot of room in the industry for new contractors. To get started with either route, you'll have to become a licensed contractor in Oregon.
In this guide, we're going to break down everything you need to know about licensure in Oregon and explain how you can start the process, so keep reading.
What You Need to Know About Getting a Contractor’s License in Oregon
The steps to getting contractor's licenses aren't too complex. In short, you need to complete a pre-license course and then pass the exam based on the course of education you took. Afterward, you'll be at the point where you can decide to become an independent contractor, or if you want, to become an employee with a construction company.
You will need to be at least 18 years of age to take the pre-license training. You will also need to complete 16 hours of education and training based on business practices in the state and the law associated with them. In order to pass, you will need a score of at least 70%.
The better thing is, the exam itself is an open book test taking some of the stress of test-taking away from the process. How long it takes to complete the process depends on the individual. The faster you complete each step, the faster you will become operational as an Oregon contractor.
The Requirements to Become a Licensed Contractor in Oregon
To become a licensed contractor in Oregon, you'll need to do a few things. You'll need to complete 16 hours of approved pre-licensure training to start. After you take your exam, you will need to ensure you have all necessary insurance, a surety bond, and that you have done everything required by the state of Oregon to work in your chosen specialty.
Step 1: 16 Hours of Pre-licensure Training and Education
The first step to getting a contractor license is to complete the required hours of pre-licensure training. As with most things, an Oregon contractor's license does require this prerequisite. The state will require you to provide proof of your completion of the pre-licensure education.
You will need to find approved contractors for this training and after completing this part, you'll be able to take your exam with the education provider that you decided to work with.
Step 2: Determine Which Endorsement Type You'll Pursue
The next step is to determine which class of membership licenses/endorsement type you'll pursue. The reason that's needed is for the requirement to carry the endorsement appropriate for the different structures and projects you'll be working on. This goes into what you plan to do as a contractor, such as if you'll be working on commercial projects or if they'll be residential.
Contractor's licenses get based on the type of work you plan to do as there is a different application for each. What you also need to know is that you can still take on commercial projects even if you specialize in residential properties. All you would need to do is, modify your endorsement to reflect that you are now working on both.
Step 3: You’ll Find the Appropriate License and Find the Application
Once you figure out which license you want, you'll need to enter the state's contractor licensure online system and select the appropriate application type. The system will tell you what documents to collect and any additional information you might need to know to successfully complete your application. As you proceed to find the appropriate application and decide on the type of license you're applying for, the process is about done.
Make sure that you apply for the appropriate license because if you apply for the wrong license type, you'll have to reapply to take the appropriate test. This will mean additional time and money. This is easily avoided when you take the correct training with the corresponding test.
Step 4: Ensure You Get the Required Insurance and an Oregon CBB Surety Bond
For this next step, you'll ensure that you get any of the needed insurance options required by the state for what you plan to do. This means that you need to be aware of what's needed if you plan to start a business and hire employees or if you decide to become an independent contractor yourself.
You will also need to get an Oregon contractor's bond. The surety bond and your insurance policy are not the same things, but both are necessary for you to operate as a contractor in Oregon.
Oregon Surety Bond
The permit for the surety bond is a form of license that you need before you become a licensed contractor in Oregon. The point of this bond is to ensure that the CCB is being properly reimbursed. This refers to any orders left unpaid that are issued by the board.
Workers' Compensation Insurances
The state will require you to provide proof of your workers' compensation insurance before they issue you a contractor license as well. Workers' compensation insurance is needed if you'll be hiring employees and the policy will protect both yourself and those working for you. The point of this is to protect your workers in case they are hurt while on a job site.
This type of policy will cover things like any wages lost by the employee due to injury, medical expenses, and even disability. The state of Oregon, however, does not require coverage for any independent contractors. This accounts for the difference between what you would need for your employees and what you don't need for bringing on independent contractors during a project.
General Liability Insurance
When obtaining your general liability insurance, you want to ensure that the "Construction Contractors Board" is listed as the holder of the certificate. The purpose of this is like any insurance policy. It's a contract between the insurance company that you work with and yourself, which will state that they will reimburse any third parties when there are defects in construction or poor craftsmanship present.
Having an insurance policy also provides a level of protection in the case that any damage becomes the result of any work done. Knowing how much liability insurance you need as licensed contractors is also an important step. This will depend on the type of contractor you are such as if you're a type of residential or commercial contractor.
For example, if you're a residential developer, according to the state's government, you'll need a policy that covers $500,000 for each occurrence. If you're a general commercial contractor, your policy will be based on technician levels. So, for a commercial contractor, you'll want to look at policies that cover $1,000,000 for a level 2 aggregate or so specific to other levels.
Step 5: Submit Your Application and Pay the Fee
Once you've got all the documents in order and you're ready to apply for a contractor license in Oregon, the state will provide you with a contractor application form. Make sure that the application form is completed accurately and that you include all the required documents.
Once you've completed the form, all that's left for you to do is submit your entire application. This will need to include your surety bond and your certificate of insurance coverage. Your application will also require a $325 fee.
This fee covers your license for two years and you can pay the fee using any major credit card. Checks are also acceptable forms of payment.
Step 6: Ongoing Obligations for Becoming a Licensed Contractor in Oregon
Once you've become a licensed contractor in Oregon, you'll have to meet a few obligations. You must maintain workers' compensation insurance and general liability insurance. You will also have to keep up with the reapplication process as it's required by the CBB to renew your license every two years.
Keep in mind that this step is focused on sustainability. This means that you should be aware of your license renewal date, among other things. Depending on whether you're an employee or an independent contractor, you'll need to take responsibility for a few things such as;
- Health and safety regulations
- Policy updates for contractors
- Regulatory responsibility
- Monitoring and management of projects
Also, you should be aware of penalties given by the state for noncompliance with certain rules and regulations. For example, if you advertise a bid to do a project without a license, you could be fined. For second, third, or more offenses, the penalty charges also increase from $700 to even $5,000.
In some cases, if the Oregon contractor's license is obtained during a certain time, the penalty price may be reduced, but this is dependent on the situation. If you're staying up to date with your license requirements and state policy updates, these issues can be avoided.
Why You Need a License in Oregon
If you're a contractor in Oregon, you need to have a license. The general rule is that if you're working for any type of compensation that involves construction processes or structural improvement, you need a license. This doesn't only refer to general contractors.
This also refers to any work involving;
- Roofing services
- Electrical or plumbing work
- Appliance Repair
- Development of land and home inspections
There are, however, some things that won't require a license, such as clean-up of construction sites, gutter cleaning, etc. Anything that isn't structurally-based often won't require having a state license. Being licensed helps to deter risks associated with finances as well.
It could also keep people from running into legal issues due to hiring an unlicensed contractor. Hiring unlicensed contractors to work on any real property can result in fines and potentially much worse depending on the type of project and the chance of unsound construction work being done.
In Oregon, the person hiring the unlicensed contractor could be just as responsible in the same manner as the contractor themselves. In some states, this could result in not only fines but jail time as well. These are some of the main reasons to stay on top of policy updates for contractors as well as license requirements.
The process to become licensed doesn't have to take a long time; the process is very straightforward and with the proper help and resources from your state, you can get your contractor’s license in Oregon without having to worry about potential legal issues.
Preparing for the Exam
As mentioned, you'll need at least a 70% score on the exam to pass. It's vital not to overlook the importance of preparing for the exam ahead of time. This is the most important part of the process given that some of the questions in the exam will be tricky.
Also, while the test is open-book you have to be able to locate the answers. This will involve navigating a variety of reference materials and proper test prep along with one-on-one training can make this part of the process easier for you to do. It will also help for you to have some help ensuring your application is put together correctly after passing.
Finding Your Course
The more you build your credibility, the more money you can make and the bigger the projects you can take on. To start building your career as a contractor, you need to first get your contractor’s license in Oregon. With the Contractor Training Center, the process is simple.
Search for your state and we'll give you the resources you need to succeed. From practice tests, exam book bundles, and exam prep seminar access to a full intensive learning bootcamp, we work to provide the most useful tools. Ready to advance your career? Book a call with a licensing specialist to get started today.