Contractors looking to perform construction work in Washington need to be registered with the state. In addition, many Washington cities require business licenses for companies working within their limits. Knowing where to go to get the proper licenses is key to getting a business set up to work in a new location. Luckily, we’ve got the information you need about Washington contractor licensing.
If you need assistance getting licensed in other states, check out our guide to licensing in all 50 states.
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Who needs a contractor’s license in Washington?
Washington makes it easy: All contractors working in the state must register with the Department of Labor and Industry (L & I) and must be bonded and insured.
There are two types of registration categories for contractors: one for general contractors and one for specialty contractors.
Important note: if your company hires subcontractors, no matter what kind of work you do, you must register as a general contractor. Specialty contractors in Washington are not allowed to subcontract work.
As was mentioned above, general contractors can hire subcontractors, and they can perform work of any type. Specialty contractors are limited in the type of work they can perform, and they cannot hire subcontractors. There are no less than 63 specialties to choose from.
Do you need a license to file a lien in Washington?
Washington state law says that contractors have to be registered in order to file a mechanics lien. The only exception is for design companies and material suppliers.
It’s important to note that in Washington, construction managers and suppliers to suppliers have no lien rights. These companies will have to use other tools to protect their payments, like having a good collection policy or strict requirements for extending credit to potential customers.
General contractor licensing and registration requirements
General contractors, and other contractors who want to hire subcontractors, need to register with the Department of Labor and Industry. The process involves completing an application and submitting it, along with a surety bond, general liability insurance, and an application fee. Washington has state-provided workers comp insurance, so contractors with employees will need to register for that as well.
General contractors are required to submit a surety bond for $12,000, and general liability coverage of $200,000 public liability and $50,000 property damage, or $250,000 combined single limit coverage. The application fee for registration is $117.90.
Once a contractor’s application has been received and processed, the contractor can then begin advertising and start work.
Washington trade and subcontractor licensing
There are certain trades that require an individual to be licensed before a company can register as a contractor. Those trades are plumbing, electrical, elevator mechanic, boiler and pressure vessel inspectors, manufactured home installer, asbestos removal, and construction cranes.
Individuals must apply for these licenses by completing an application and passing an exam, if required. Once the individual license has been issued, then the company can register with L & I.
Electrical contractors have a special process for applying to be licensed. There are 15 specialties that an electrical contractor can apply for. Once the application is complete, it is submitted with a $4,000 surety bond and an application fee of $319.20. Note that if an electrical contractor wants to provide services that aren’t covered under the electrical specialty, they may also have to register as a general or specialty contractor.
Other specialties and trades register as specialty contractors through L & I. The process and application fees are the same as for general contractors, as are the insurance requirements. Specialty contractors are required to submit a $6,000 bond.
City and municipal licenses
In Seattle, only gas pipe installers and refrigeration technicians are required to get a contractor’s license. There is no business license requirement in Seattle.
Nearby Vancouver requires all businesses in the city or conducting business in the city to get a business license. This includes contractors working on projects within the city limits. The application can be completed online or mailed in. The cost for the license is based on the number of employees working in the Vancouver city limits. The base fee is $200, and each employee is an additional $90.
In Olympia, the state capital, all businesses in the city or conducting business in the city need to apply for a business license. This includes contractors working on projects within the city limits. Olympia partners with the Washington State Department of Revenue’s Business Licensing Service (BLS) to register companies to do business in the city.
Spokane also uses the Washington BLS to process city business license applications for businesses conducting business in the city.
Kennewick uses the Washington BLS to process city business license applications. Contractors need to be registered with a business license for the city. The fee for a Kennewick business license is $55, plus $5 for each employee working in the city.
No matter where you live, it’s always a good idea to check in advance to see if the municipality you’re working in has any specific license requirements.
Working in a city in Oregon? Make sure you check out Oregon Contractor Licensing: Applications, Rules, and Requirements.
Penalties for not being registered
According to Washington law, working as an unregistered contractor is a misdemeanor offense. Unregistered contractors don’t necessarily have the insurance and bonds to protect their customers if something goes wrong on a project. They often are able to undercut the prices of properly registered contractors because they don’t carry these additional costs. If you see unregistered contractors on a job site, you can report them at the state’s contractor fraud site.
The law also requires contractors to provide customers with certification of their license status on projects over $1,000. The disclosure form must be given to each customer at the start of the project, and the customer must sign it to acknowledge receipt.
Protecting construction payments in Washington
Registered contractors working in Washington can protect their payments by filing a preliminary notice before starting work on a project. This notice is required for subcontractors and direct suppliers to protect their mechanics lien rights. Continue to protect your rights by sending a letter of intent to file a lien if you haven’t received payment within your terms. Liens must be filed within 90 days of completing work.
Note that construction management firms and suppliers to suppliers do not have mechanics lien rights in Washington. These companies need to establish additional policies to help them collect their payments.