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What Happens To Unlicensed Contractors?

Contractor Tips , Posted by Charlotte Smith on

What Happens To Unlicensed Contractors?

Contractors are construction professionals with specialized training to perform a wide range of duties for their clients. As a result, contractors are required to have a license issued by the state that validates their experience and allows them to take on projects of a specific size. 

If an unlicensed contractor works on a project, it could potentially harm the community and tarnish the construction industry's reputation. Avoid this mistake to protect your job and get paid a fair wage.

Please continue reading below to learn what happens to unlicensed contractors who work on construction projects.

Unlicensed Contractors Could Jeopardy Safety

Safety is the top priority in any construction environment. 

Experienced and licensed contractors understand the importance of safety and follow a strict protocol to get the job done with minimal risk. Unlicensed contractors don't have the same safety training and could potentially cause harm to themselves or others. 

Moreover, the lack of experience could potentially disrupt the integrity of the project. For example, an experienced and unlicensed plumber might put in a substandard pipe system that will break and flood the property a year down the line.

So many things can go wrong if an unlicensed contractor handles critical components of a construction project. As a result, construction companies will seldom hire someone without the proper licensing requirements.

Unlicensed Contractors Could Cause Legal Trouble

A contractor without a license essentially becomes an employee of the property owner. As a result, that could make the owner liable for any injuries on the job. Licensed contractors must have their liability, injury, and property damage insurance coverage, so all the risk is offloaded from the property owner. 

If a contractor is injured, the owner will likely need to cover the medical expenses using their homeowner's insurance policy. That said, most property owners won't take the risk of hiring someone who doesn't have a contractor's license.  

Unlicensed Contractors Could Face Charges

Contracting without a license could lead to misdemeanor charges if caught. Depending on the scope of the charges, contracting without a license would require the worker to appear before the Superior Court and could be fined or even serve jail time. 

The fines for contracting without a license range from $5,000 to $15,000, and they potentially receive a sentence of six months in jail. If the unlicensed contractor continues working without a license, the charges will be severe if caught again. 

Furthermore, you could be sued for your earned money if you were already paid before getting caught. These legal battles could be hard enough to bankrupt your contracting business ultimately.

When you consider the legal ramifications of working without a license, it's blatant that getting a contractor's license is worth it in the long run.

Unlicensed Contractors Can't Obtain High-Paying Jobs

While some states require you to have a license to do any work as a contractor, other states will allow you to accept jobs up to a certain dollar amount. In other words, you can't legally take jobs that pay a certain amount without risking getting fines or other legal ramifications. 

As a result, the most lucrative projects are usually out of the question without a license. If you want to make a successful career out of contracting, you'll need to obtain a permit. 

How Do I Get a Contractor’s License?

Now that it's pretty clear that getting licensed is the right way to go, how do you obtain a contractor's license? In short, getting your license is a long process, but it's not that difficult if you take all the necessary steps. 

To get a contractor's license, you will need to:

Gain Work Experience & Training

Most states require that you have a certain amount of hours of work experience before you apply for a license. You can obtain this experience by working as an apprentice under a licensed contractor in your field. The good news is you will still get paid for your work. 

Pass Your State Licensing Exam

Passing your contracting license exam is an essential step towards being a certified contractor. While every state has a slightly different exam, it typically contains a vast array of technical and business-related questions about your trade. 

Obtaining Proper Insurance Coverage

Above, we mention that licensed contractors have insurance that protects themselves, their employees, and clients from financial responsibility in the event of an accident. 

Moreover, you'll also need a construction bond. The bond amount varies from state to state, but it's there to showcase that you're financially prepared to complete a project. 

The Bottom Line

There are several standards to uphold to protect both workers and clients from risk in the construction industry. The contractor licensing process is one way to vet out the best workers, allowing the community to benefit from hiring independent contractors. 

If you're looking to start a career in construction but need help getting licensed, check out our contractor licensing services here at Contractor Training Center

We've helped countless people pass their licensing exam and become licensed contractors, and we'd love to help you next!