Starting your own contracting business in Nebraska is a big and exciting step. When you start your own company, you’ll be able to call the shots and take the business as far as you’d like. By deciding who you work with and the type of projects you want to take, you’re in the driver’s seat. But, there is one area in which you won’t be able to call the shots: Nebraska contractor licensing requirements.
But getting a business off the ground is a big undertaking, and it requires a lot of time and effort. This guide will take you through the Nebraska contractor licensing requirements so you’ll have less to think about when starting your business.
Contracting outside Nebraska? Check out The Ultimate Guide to Contractors License Requirements in Every State.
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Who needs a contractors license in Nebraska?
Nebraska contractor licensing requirements are a bit different than most other states. Instead of requiring each contractor to hold a state-issued license, it requires most to pursue licensing with individual counties. The only requirement that most contractors must meet at the state level is registration, which we’ll cover in another section.
There are some exceptions to the licensing and registration requirements, as well. Electrical contractors must pursue state-level licensing, while contractors, subs, and handyman businesses earning less than $5,000 each year aren’t required to register. Also, contractors working in counties with populations of less than 100,000 aren’t required to pursue licensing.
Do you need a contractors license to file a mechanics lien in Nebraska?
With the relatively fluid licensing and registration requirements, there might seem to be some questions as to whether contractors have to carry a license to file a mechanics lien. The good news is that Nebraska’s mechanics lien laws do not explicitly require contractors to carry a license or register to file a mechanics lien.
But consider this: You’re working on a project while unlicensed, and the project owner decides not to pay you. Of course, you’re able to file a lien, but the project owner still refuses to pay. Should you have to foreclose upon the lien in court, the court might not look at your unlicensed status so fondly. For that reason alone, it can be critical to carry a license.
How to get a contractors license in Nebraska
As mentioned, almost all contractors in Nebraska need to register with the state. Some contractors or subs might have to register and carry state-issued licenses.
State registration requirements
Nebraska requires almost all contractors to register their businesses with the Nebraska Department of Labor. Contractors must head to the Department’s website and create a log-in to register.
The Department of Labor offers this User Guide to streamline the registration process and remove the guesswork. Equipped with a log-in, contractors and subs can continue through the registration portal with these steps:
- Supply identifying information for person completing the application
- Provide business information, including:
- Entity type
- Federal ID number
- Social security number
- DBA or corporation information
- Detail the services the business performs
- Provide Employee information
- List names and addresses of officers, members, and subcontractors
- Supply nsurance information, including general liability and workers compensation
- Make the required payment, which is $40
Contractors with more than one business will have the opportunity to register all of them with the Department of Labor, as well. The portal also allows contractors to upload any required documentation directly into the database.
Electrical contractor licensing
Beyond registration, electrical contractors also need to carry state-issued licenses. Licensing falls under the control of the Nebraska State Electrical Division.
The Nebraska State Electrical Division requires contractors to fill out this application. Qualifications for licensing are:
- Graduate from a four-year electrical course in an accredited college or university, and at least one year of experience, acceptable to the board, as a licensed journeyman electrician, or
- Have at least five years of experience, acceptable to the board, in planning, laying out, supervising, and installing wiring apparatus or equipment for electrical light, heat, and power
Since journeyman electricians have to take an exam for their licenses, Nebraska doesn’t require electrical contractors to take and pass an additional exam. The application fee for odd-numbered years is $250, and the fee for even-numbered years is $125.
Getting a Nebraska contractor license by county
Some contractors need to pursue licensing with the individual counties in which they work. And, since each county has its own requirements, contractors and subs working in several counties might need to carry several licenses — one for each county.
Contractors working in Douglas County, which go through the City of Omaha Planning Department, need to carry county-issued licenses. There are several types of building contractor licenses, each with its own requirements and permissions.
- Class A contractors can work on all structures up to and including high-rise buildings
- Class B contractors can work on all structures up to four stories in height
- Class C contractors can build homes and duplexes
- Class D contractors can remodel residential structures
- Class E contractors can install roofs, siding, windows, and decks
Class A and B contractors need to carry up to $1,000,000 general liability policies. Class C contractors must carry $500,000 general liability policies. Class D and E must carry $300,000 general liability policies. All contractors must secure bonds valued at $10,000.
Beyond building contractors, there are requirements for electrical, plumbing, and mechanical contractors:
- Electrical contractors must simply register with the county, as licensing is handled by the state
- Journeyman and master plumbers must take and pass an exam with the county, as well as carry a $1,000,000 general liability policy, as well as a bond valued at $10,000
- There are several types of mechanical contractors, including master and journeyman steamfitter, oil burner installers, oil tank installers, and LP gas tank installers. Many mechanical contractors must carry $300,000 general liability policies and secure $5,000 or $10,000 bonds.
Contractors working in Lancaster County will have to pursue licensing through the City of Lincoln Department of Building and Safety.
The city requires several contractors to register, including:
- Master electrical contractors
- Master plumbing contractors
- HVAC contractors
Insurance requirements vary from $500,000 to $2,000,000 and bonds vary from $5,000 to $25,000, both depending on the contractor type.
Contractors and subs working in Sarpy County will pursue registration through the City of Lavista Building Department.
Building contractors and subs can use this Occupation License Application for Construction and Tradesman. Requirements include a $75 fee and proof of $1,000,000 in general liability and $500,00 bodily injury insurance.
Mechanical and plumbing contractors will fill out this Professional License Application. Requirements include a $15 fee, proof of $1,000,00 general liability and $500,00 bodily injury insurance, and a surety bond of $5,000.
Penalties for unlicensed contracting in Nebraska
Nebraska’s contractor licensing requirements are a bit unique, but the state takes it seriously. Contractors and subs who fail to register but perform contracting work within the state are subject to $500 penalties. If the contractor contests the citation, they’ll be given 60 days to register, at which point the state will waive the fee.
Individual municipalities and counties also set their own fines and penalties for unlicensed contracting. Unlicensed contractors and subs can expect to pay additional fines and fees for not meeting those local requirements, as well.
Protecting your payments in Nebraska
Whether you’re a contractor or a sub, Nebraska contractor licensing requirements are important. But no less important is protecting your payments. Construction is a cash-hungry industry, and a few months of slow payment can start a downward spiral from which some construction companies never recover.
The best way to protect your payments and avoid those issues is to preserve your lien rights by meeting certain requirements and deadlines issued by the state.
Unlike many states, Nebraska doesn’t have an explicit rule requiring contractors to send preliminary notices to preserve their lien rights. But that doesn’t mean contractors shouldn’t send them. This document creates a professional first impression between the contractor or sub and the folks cutting the checks. And those are the people you want to know your company name.
If a payment issue arises, Nebraska contractors, subs, and suppliers will have to keep their eye on the deadline to file a mechanics lien. Regardless of the contract tier, these parties have up to 120 days from last furnishing to file a mechanics lien, which is less time than many other states.
Once the contractor, sub, or supplier files a mechanics lien, they need to keep track of the deadline to initiate foreclosure. In Nebraska, construction contractors and suppliers have up to 2 years from filing the lien to take enforcement action. While this is a significant window, the project owner can shorten it substantially by demanding the contractor to initiate the suit, which provides just 30 days to enforce the lien.
Between the critical licensing requirements, the penalties, and the requirements to protect your payments, there is a lot to know for Nebraska contractors. This guide should help, but be sure to understand the rules and regulations in your area so you can build your business from the ground up the right way.