So, now we have discussed some of the details of a contractor's license and why it's a good idea to get one, let's discuss the practicalities. Listed below is a step-by-step guide of everything you need to obtain your contractor's license for the state of Washington.
Step 1: Make Sure You Need A License
There is no use in going through the licensing exams and procedures if you don't need one. You will only need a contractor's license if you intend to do any of the following within the state of Washington:
- Construct new property or structures
- Demolish property or structures
- Remodel properties
- Perform repairs on properties and structures
- Developing property or ‘flipping’ old homes
If you don’t intend to do any of the above, your business may not require a Washington contractor's license. Of course, if you have any questions at all, make sure to check with the Washington Department of Labor and Industries. The last thing you want to do is start work you assumed was okay, only to get shut down and fined later.
Step 2: Obtain Your Unified Business Identifier
Your Unified Business Identifier, otherwise known as your UBI number, is the first thing you will need to submit when filling out your contractor's license registration form. If you don't already have a UBI number, you will need to acquire one.
To register, you will need to submit the correct form for your business type. The Articles of Incorporation and Certificate of Formation (LLCs) are available on the Washington Secretary of State website. You can submit online or register in person at the following address:
Washington Secretary of State
Dolliver Building
801 Capitol Way South
Olympia, WA 98501
Once the registration process is complete, you will receive your UBI number unique to your business.
Step 3: Apply For A Business License
Businesses that earn more than $12,000 in a year or businesses with employees will need to apply for a business license. If that applies to you, you will need to register your business with the Department of Revenue, the Employment Security Department, and the Department of Labor and Industries.
Alongside the Master Business License Application, you also will need to pay the associated fee. The Washington Master Business License is necessary so that the state can collect taxes. Despite the associated costs, this is an integral step towards becoming a licensed contractor in Washington.
Step 4: Apply For An Employer Identification Number
In addition to a UBI number, the Washington contractor license registration form will ask you for your Employer Identification Number, or EIN. This number identifies your business so that the IRS can process your tax payments. You can apply online for an EIN through the IRS website.
Step 5: Get Bonded Through The WA Department Of Labor And Industries
Alongside registering for a contractor's license in Washington, you need to obtain a surety bond. This bond varies depending on the work you intend to do. It is $12,000 for a general contractor and $6,000 for a specialty contractor. You can obtain a surety bond through any insurance agent.
When you apply for your contractor's license through the Washington Department of Labor & Industries, they will request your original bond document. To ensure you don't lose the original, make copies for your records before sending them.
Additionally, you need to ensure the company name listed on your bond is the same as your proof of insurance. Any difference whatsoever could invalidate your application.
Step 6: Obtain Evidence Of Insurance
To obtain your contractor's license in Washington, you must demonstrate that you have proper insurance. Evidence of this will be necessary for the registration process. The insurance provided must cover:
- $50,000 in property damage
- $200,000 in public liability coverage
The Washington Department of Labor & Industries must be the certificate holder. Additionally, as is the case with your surety bond, you will need to send the original insurance certificate with your application. It is advisable to make copies for your records.
Step 7: Decide What Type Of License Your Business Needs
Not all contractor licenses cover the same specialties. Before applying, you should know which is most suitable for your business. Applying for the wrong contractor's license can be a costly business, as the testing fees for your first time vary from $100-$300.
To help ensure you make the right decision, we have compiled brief explanations of each of the three types of contractor's licenses available in Washington.
General Building Contractor
The General Building Contractor license is arguably the most diverse license available as it covers a little bit of everything. If your business plans to demolish, build, repair, or remodel, this is the license for you. General contractors can subcontract work as and when it is necessary.
General Engineering Contractor
This license is for specialized engineers. It includes work relating to piping, utilities, or chemicals. It also has applications for work done near schools, on sewage pipelines, or chemical plants.
Some of the specialist knowledge required includes concrete work, masonry, electrical, heating, and ventilation.
Specialty Contractor
This license is less prevalent than the previous two, but it is necessary for highly specialized work. This work is often on the more dangerous side, such as high-rise glazing or asbestos removal.
Numerous licenses are available, so make sure you research the specific specialty before applying. The WA Department of Labor & Industries lists 63 specialties for specialty contractors.
Which Exam Should You Take?
Just as not all contractor's licenses are the same, not all exams are the same either. Once you know which specific license you need to apply for, you need to sit the exam relating to that specific license.
If your exam doesn't line up with the license you are applying for, your application will be invalid. The contractor exam requirements vary. For example, the general contractor license does not require applicants to sit for an exam, but the specialty contractor licenses do. See the Washington State Department’s page for specific exam information and contractor registration requirements.
Take The Exam
The two exams to obtain your general contractor's license in Washington are the Business Management/Law exam and the Trade exam. They cover different materials, so you need to prepare sufficiently for both.
As noted, general contractors may not need to sit an exam to earn their license. However, specialty trade contractors will. In particular, electrical contractors will need specific electrical licensing. For further information on whether you need to sit the exam, visit the Washington State Department of Licensing and Registration for further information.
Exam Times And Dates
The Washington State Department of Labor & Industries will arrange your exam following your initial application.
