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Filing a Mechanics Lien – 5 Places It’s Hard to Have Success

Mechanics liens are powerful tools that help construction companies get paid the money they’re owed, but the rules and requirements that must be met in order to successfully file a lien can be challenging.
This challenge is multiplied by the fact that every state’s lien requirements are different. And sometimes, a single county recorder’s office within a state will have their own specific way of doing things.
Needless to say, keeping track of all these rules as they change from state to state and from county to county is quite a challenge (though here at Levelset, we do a pretty good job of staying on top of it). Keep reading for a list of 5 places in the country where the requirements that must be met in order to successfully file a lien are especially challenging.

Washington DC

On the Plus Side

Washington DC does have one thing going for it: mechanics liens can be electronically filed and recorded in the nation’s capital. It’s always a great thing when a jurisdiction allows for e-filing, as it can save a ton of time (and expense!) that would otherwise be needed if the lien claimant was relying on the USPS or some other delivery method.

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On the Negative Side

Washington DC has some very particular requirements when it comes to providing additional, required information. In addition to all of the other required information, lien claimants in Washington DC must also provide

1. a copy of their Basic Business License from the Dept. of Consumer and Regulatory Affairs, and
2. a Certificate of Good Standing, also from the Dept. of Consumer and Regulatory Affairs.

Copying the information or printing something off of the internet is not sufficient – a copy of the original is required for both of these in order to have a valid mechanics lien claim.

Massachusetts

On the Plus Side

In Massachusetts, electronic filing is available for certain (but not all!) types of land, i.e., “Recorded Land.” Though this benefit is very limited in Massachusetts, we’re happy whenever e-filing is an option!

On the Negative Side

Massachusetts has a very unusual – and confusing – requirement in that a mechanics lien must be broken down into two different documents:

1. a Notice of Written Contract, and,
2. a Statement of Account.

Not only must these documents be filed separately, but they must be filed in that order. If you attempt to file the Statement of Account before the Notice of Written Contract, well then, you’re going to have problems.
Another difficult requirement is that Massachusetts will not electronically record documents that are classified as Registered Land.” What’s the difference between “Recorded Land” and “Registered Land”? An easy way to determine whether or not your document is one or the other is to look at the deed. If there is a book and page number associated with your deed, it is most likely “Recorded Land” and is able to be submitted for filing/recording online. “Registered Land” must be sent directly to the county and is not eligible for e-recording.


Essential Reading

How to File a Massachusetts Mechanics Lien – A Practical Guide


Maricopa County – Arizona

On the Plus Side

Hooray for Maricopa County, as they’re another county that has electronic recording!

On the Negative Side

Maricopa County is (in our humble opinion) overly fastidious on the quality of documentation that’s required and accepted. There’s nothing unusual about claimants being required to  include a copy of the written contract or proof of preliminary notices to go with their lien claim. In the case of Maricopa County, what’s unusual is that these documents need to be scanned at a minimum of 300×300 DPI (dots per inch) and cannot have any marking or shading on the scanned items! Also, the document cannot contain any font smaller than 10 pt. type. And last but not least, they won’t accept any documents that contain any images.

Orange County – California

On the Positive Side

Good news for Levelset customers – we use a courier service in Orange County, and this allows us to know if the lien was successfully recorded almost instantly (as the courier reports back to us).

On the Negative Side

Is the property you’re working on owned by a trust? Well then, in Orange County you better include all of the individual trustee information, since including just the name of the trust by itself will result in a rejected mechanics lien.

Fairfax County – Virginia

On the Plus Side

Fairfax County has firmly entered the 21st Century, so to speak: they have their own website to create a cover sheet and calculate fees in order to file a mechanics lien.

On the Negative Side

Well for starters, in order to create a cover sheet on the Fairfax County website, you have to use the Safari web browser. This is not simply a case of a picky website that won’t load or work properly — the barcode generated on the cover sheet will not be able to scan if the cover sheet is not created in Safari. Since only about 1 in 5 people use Safari, there’s an 80% chance that you’ll have problems using the website. But good luck, because the cover sheet is required.

Mechanics Liens – Powerful Tools, Complicated to Use

If you’re a contractor on a job and you’re having trouble getting paid, a mechanics lien (or a bond claim) can be just the tool you need to help with your payment issue. But given the power that these tools can wield (especially a mechanics lien claim, which can encumber and ultimately force the sale of property in order to satisfy a debt), it’s not surprising that these requirements exist. However, even though managing the requirements can be a challenge, mechanics liens and bond claims really do work.


Essential Questions to Ask the County Recorder Before Filing a Lien

Here’s a number for you, 3,141. That’s the number of counties, boroughs, parishes, census areas, and independent cities across the US. That’s a lot of recorder’s office to deal with. And each has its own specific requirements and fees. To make matters worse, recorder’s can be tricky to deal with, and often nit-pick every aspect of your document. You should always contact the appropriate recorder’s office ahead of time to nail down the specifics. With this list of what to ask the county recorders, your path to a recorded lien will be as smooth as possible.

In over 10 years of business helping construction get paid in all 50 states, we’ve interacted with more than our fair share of county recorders and clerks. However, just like the underlying mechanics lien laws themselves, county recorders and clerks are continually updating and changing their regulations which can include anything from the mandating the margin size on the actual paper of your lien filing, to the filing fees required, and everything in between.

Thankfully, since Levelset is in nearly constant communication with the county recorder offices across the country, we do a pretty good job of staying up-to-the-minute on all of shifting lien filing requirements. But not only are we good at keeping our information up-to-date, what we’ve really become experts in is asking the right questions. Here’s a list of the essential questions to ask the county recorder before filing your mechanics lien claim. Continue reading “Essential Questions to Ask the County Recorder Before Filing a Lien”


3 Ways To Get Burned Filing Your Own Mechanics Lien

Let’s say you’re going into the hospital for something major, something like…brain surgery. Now at the very least, you’d want the doctor performing your operation to have graduated from medical school. Right?

While lien rights management isn’t necessarily a life and death issue, it’s still a legal process that requires a great deal of understanding about a complicated issue. And yet, people in the construction business try to manage their lien rights by themselves all the time, falling time and again into difficult-to-avoid traps that can easily ensnare someone who’s inexperienced with all that successful lien rights management requires. Continue reading “3 Ways To Get Burned Filing Your Own Mechanics Lien”


US Lien Laws: The Definitive Word Count Rankings

We all know lien law can be incredibly confusing. All 50 states have different rules and requirements for preliminary notices, notices of intent, mechanics liens, lien waivers, lien releases and more. These requirements are outlined by each state’s mechanics lien statute, but reading and understanding these statutes is no easy task, even for trained attorneys.
Slogging through that complex legal jargon is tedious, and it’s easy to misinterpret what’s there. To make it even more troublesome, many states’ lien statutes contain tens of thousands of words! No wonder lien law is so complicated.

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I looked at the lien statutes for private projects in all 50 states (and Washington, DC), and here is what I found. Please note that “pages” refers to single-spaced pages with size 12, Times New Roman font.

Total Page Count of All Lien Statutes: 1,171 pages 

That is a heck of a lot of pages to trudge through! Long lien statutes are a particular challenge to construction companies and individuals that work across state lines since every state has a separate, specific statute.

Average Lien Statute Page Count: 23 pages

Think about it – if 23 pages is the average, some of those statutes must be really long.

5 States with the Longest Lien Statutes:

  1. Florida: 65 pages
  2. Utah: 57 pages
  3. New York: 52 pages
  4. Ohio: 45 pages
  5. New Jersey: 44 pages

Even if you just read the statutes for these top 5 states, that would be 263 pages: the length of a substantial book! And when you factor in the complexity of the statutes’ legal writing style, you should probably factor in a few extra minutes for each page.

5 States with the Shortest Lien Statutes:

  1. Alabama: 3 pages
  2. Vermont: 3 pages
  3. New Hampshire: 6 pages
  4. New Mexico: 7 pages
  5. North Dakota: 9 pages

Some of these don’t sound so bad – 3 pages? That seems reasonable. But remember, this isn’t 3 pages of an exciting novel or news story; this is 3 pages of single-spaced, dense legal lingo. And only 2 of 50 states (51 including DC) have statutes that short! Remember – the average is 23 pages.

But Don’t Despair – There’s Good News!

Levelset’s expert construction attorneys have done all the hard work for you. They have read through every single page of every single lien statute (that’s right – all 1,171 pages) in order to make the content easy to digest and understand for everyone in the construction industry.
Levelset has mapped the entire Lien Genome™ and our intuitive web platform places it in the palm of your hand. Never again wonder about hyper-complex rules or costly mistakes – Levelset’s platform tracks all your deadlines automatically and you can send documents with just a few clicks of your mouse.
Try Levelset free today.
There you have it – the states with the most challenging lien law. Your state isn’t one of the top 5? Find the definitive word count rankings for all 50 states in the chart below.

StateLien Statute Word Count
Florida25,810
Utah22,391
New York20,676
Ohio19,292
New Jersey17,395
California17,352
Nevada17,181
Texas15,856
Michigan15,679
Illinois15,286
Washington11,774
Tennessee11,719
Missouri11,697
Arizona10,796
Wisconsin10,605
Massachusetts10,384
Colorado10,213
Louisiana10,029
Nebraska9,839
Connecticut9,517
Oregon9,378
Rhode Island9,040
North Carolina8,892
Virginia8,494
Wyoming8,368
West Virginia8,350
Georgia8,259
Arkansas7,007
South Carolina6,973
Indiana6,424
Alaska6,207
Mississippi6,136
Kentucky5,975
Oklahoma5,975
Delaware5,973
Minnesota5,925
Pennsylvania5,817
South Dakota5,649
Montana5,146
Idaho4,911
Iowa4,758
Maine3,967
Kansas3,902
Washington DC3,803
Hawaii3,528
Maryland3,349
New Dakota3,265
New Mexico2,683
New Hampshire2,323
Vermont1191
Alabama903

Mechanics Lien Deadlines for Prime Contractors in All 50 States

The mechanics lien (sometimes referred to as a contractor lien) is a contractor’s strongest tool for overcoming non-payment. Mechanics liens are specific to the construction industry, and the automatically law grants contractors the right to file a lien. And they are incredibly effective: Learn the 17 ways a mechanics lien gets a contractor paid.

Mechanics lien rules seem tricky and complicated to many contractors, but with the right information, this challenge becomes a lot easier.

We went through our comprehensive mechanics lien law resources and stripped down all of the discussion to the bare facts, and put that into a mechanics lien deadline chart. I love this chart. I think it’s a fantastic thing to keep on your desktop to quickly reference the mechanics lien and notice requirements in a particular state.


Download the Mechanics Lien Deadline Chart for Prime Contractors


This deadline chart will teach you four deadlines for each state (and Washington DC):

  1. Preliminary notice
  2. Notice of Intent to Lien
  3. Mechanics Lien
  4. Lien Enforcement

Every state has a mechanics lien deadline and a deadline to enforce the lien. Most states also have a preliminary notice or notice of intent to lien deadline.

Note: This chart is for parties that have contracted directly with the property owner. Not you? Download the Lien and Notice Deadline Chart for Subcontractors

How Prime Contractors can use the mechanics lien deadline chart

To protect your lien rights means to take all necessary steps such that if and when the time comes, you can file a valid mechanics lien. If you do not send the required notices at the correct times, and if you do not file your mechanics lien by the required date, you may find that your lien is void and worthless.

The deadlines progress in the order listed above.

Preliminary Notice

A preliminary notice is a letter usually sent near the time that a contractor begins work. It informs the property owner that you’re on the job, and describes the work that you are performing.

Notice of Intent (NOI)

A Notice of Intent is not required as often as preliminary notices are. NOIs are sent before, and near, the time that a contractor would file a mechanics lien. Many contractors will voluntarily send NOIs, even when they are not required, as a warning that they intend to file a mechanics lien if they are not paid.

Mechanics Lien

The mechanics lien is the foundation of a contractor’s effort to secure payment. The deadline to file a lien is anywhere from 2 months to 1 year after completing work.

Lien Enforcement

A mechanics lien is only good for a certain period of time. When the lien does not itself encourage payment, a contractor can file a suit to enforce or “foreclose upon” the lien, in order to recover payment from the sale of the property. A contractor must bring the lawsuit before the deadline to enforce the lien passes.

Two Principles to Mechanics Lien Claims Anywhere in the USA

There are two take-aways from this chart:

  1. The format in most states is preserveperfectenforce. Preliminary notice is sent at the beginning of work to preserve the right o file a lien. The lien is filed after work if unpaid to perfect the lien right. And if still unpaid, a lawsuit is filed to enforce the lien right.
  2. Time periods vary greatly depending on the state. Sometimes, they can be very short (8 days to send notice in Oregon, or only 90 days to enforce a lien in California). Other times, they can be quite long (60 days for notice in Washington and 6 years for enforcement in Ohio).

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Read the Fine Print

I’m a lawyer, so I’m compelled to tell people to read the fine print on this chart. I made this form as accurate and as simple as possible. However, because mechanics lien laws are hyper-complex, I had to make some compromises in exchange for brevity and simplicity. I discuss those compromises at the beginning of the download.

It’s also important to know that deadlines are only one component of lien and notice requirements. In addition to being sent or filed on time, every document must be sent to a specific group of people, by a particular method of mailing, and each document must be prepared in a certain way.

To learn the specifics, visit our main Resources page and select your state.


How to Get Paid on Oregon Public Projects

As a major focal point of the Biden administration’s Build Back Better plan, the federal government is allocating over a trillion dollars in funding for public infrastructure construction projects over the course of the next decade. A large amount of that construction funding is going to be headed directly to individual states, and there are plenty of opportunities for contractors across Oregon to benefit — especially as the state continues to work towards higher levels of sustainability in its new projects.

With this much work available, contractors across the state would benefit highly from being ready to take advantage of these new opportunities — and being completely prepared to protect their payment rights while doing so.

Though popular thinking is often that public projects run into fewer payment problems than private ones do, that’s a misconception: Even when public works projects are a major source of benefit, contractors are at just as much risk of slow payment or nonpayment as on any private project. Protecting your payment rights on public works projects is absolutely crucial.

Payment protection on Oregon public projects

Even though payment challenges can be remarkably similar, payment protection is very different between private and public work. When payment problems come up on a public project, contractors can’t just file a mechanics lien as a solution, as both the federal government and state governments prohibit private companies from gaining interest in public property.

Instead, general contractors on public construction projects have to secure a payment bond for the project prior to the beginning of work. In the event of a payment dispute, contractors file claims against the payment bond instead of against the property itself.

The Miller Act provides directly for this payment protection at the federal level, and most states have their own version of it with laws usually called “Little Miller Acts.” Oregon has its own Little Miller Act which protects contractors on public works projects — as long as they stay on top of their payment rights in the process.

Working nearby? Check out How to Get Paid on Washington State Public Projects and How to Get Paid on California Public Projects

Oregon bond claim laws

The main type of payment protection on Oregon public projects is the bond claim. Under Oregon’s Little Miller Act, almost all public works projects valued at $100,000 or more are required to have a payment bond equal to the contract price.

The only exception is that it’s a bit different for contracts on highways, bridges, or other transportation projects. In fact, the process becomes even more inclusive: In these cases, projects valued at $50,000 or more are required to have a payment bond.

The scope of who is able to file a claim is fairly wide, too. According to the state’s Little Miller Act, any person who has supplied labor or materials for the performance of the work provided for in a public contract, including any person having a direct contractual relationship with the subcontractor, is protected.

In Oregon, bond claims need to be sent to the required parties within 180 days after the claimant’s last date of furnishing labor and/or materials to the project, with this time period lengthened slightly to 200 days for contributions to an employee benefit plan. To be valid, the claims need to be provided to the contractor supplying the bond, the hiring subcontractor (if applicable to the situation), and to the project’s public entity.

Claims should include:

  • The project’s general contractor
  • The project’s public entity
  • A description of labor and/or materials furnished for the project
  • A description of the project itself
  • The amount claimed
  • The surety’s name
  • The hiring party’s name

Bond claims need to be served by registered or certified mail to the recipient. The wording of the state’s statute generally states that sending the claim within the time limit is sufficient for the claim’s validity, making it considered served only when it is mailed rather than when it is received. However, it may be most safe to attempt to ensure that all involved parties actually receive the claim prior to the expiration of the 180-day period.

In the event that a suit needs to be filed in order to enforce a bond claim on a project, the suit needs to be initiated within two years of the claimant’s last furnishing of labor and/or materials to the project.

It’s important for contractors to note that a preliminary notice is not required on Oregon public works projects to secure the right to make a claim against the payment bond or secure payment. With that said, it is still best practice for a contractor to promote visibility and communication on a project in order to get ahead of any payment problems that might arise.

Oregon retainage laws

Retainage (or retention) is an amount of money withheld from payment to a project’s contractor or subcontractor until the end of a given project (or until a time specified in the contract). Generally, retainage is used to ensure that a contractor finishes its work completely and correctly.

In Oregon, retainage isn’t allowed to exceed 5% of any progress payment unless the charter of the public entity provides for a higher rate. After the work of the contractor in question reaches 50% completion, the retainage rate can then be reduced or eliminated upon written request by the contractor (along with the written approval of the project’s surety). When the work is 97.5% complete, the public entity may reduce the withheld amount to the total for the value of the work not yet completed.

After a contractor’s work on a project has reached substantial completion, they should submit a written request to the public entity with approval of the surety. Once notice is given, they have 15 days to either accept the work or notify the contractor of work that has yet to be performed under contract.

The contractor then has 30 days after the contract is completed and work has been accepted by the public entity to receive the amount of retainage that has been withheld.

Retainage isn’t the exact same on every project, either. For example, if the contract price exceeds $500,000, then retained funds need to be held in an interest-bearing escrow account. In some cases, securities, bonds, or other similar instruments may be substituted for retainage.

Oregon prompt payment laws

Prompt payment laws regulate the acceptable amount of time in which payments must be made to contractors and subcontractors on public works projects, which ensures that everyone on a project is paid in a timely fashion.

Oregon’s public prompt payment laws apply to all Oregon public works contracts except for contracts for emergency work, minor alterations, or ordinary repair or maintenance. As per the state’s laws, payment becomes due when the party performs in accordance with the contract and after the submission of a proper invoice.

The public entity or contracting agency must pay contractors monthly progress payments (every 30 days) based on the estimates of work approved by the contracting agency. From this point, the project’s prime contractor must then pay its subcontractors within ten days after the prime contractor receives its payment from the public entity.

It isn’t always easy for contractors to receive payment, and there are still many situations where payments may be withheld on public works projects:

  • Unsatisfactory work
  • Disputed work, materials, or products (as long as the withheld amount doesn’t exceed 150 percent of the amount in dispute)
  • Failure to comply with other material provisions of the contract
  • A third party claim is being filed, or reasonable evidence that a third party claim will be filed
  • Failure of the subcontractor to make timely payments to subcontractors and material suppliers
  • Damage to an original contractor, subcontractor, or material supplier
  • Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum
  • Other items as allowed under the subcontract or purchase order terms and conditions (making it especially important to properly understand contract provisions)

Of course, withholding payment improperly leads to penalties on the part of the withholding party, too. In the event of improperly withheld payment, the project’s public entity has to pay penalty interest on any payment not made within the earlier of either 30 days after the invoice date or 15 days after the contracting agency approves the payment.

The interest rate according to Oregon law is very specific: Three times the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve district that includes Oregon on the date that is the earlier of either 30 days after the invoice date or 15 days after the contracting agency approves the payment (just as with the prior rate). The involved parties may agree to a higher interest rate as long as the agreed-upon interest rate doesn’t exceed 30 percent.

A prime contractor that fails to pay a subcontractor within 30 days of receiving payment from the contracting public agency must pay an interest penalty on the amount due at an interest rate of nine percent per year. Specifically, the prime contractor needs to pay interest from the day after the required payment date to when the amount due is paid.

If payment is being withheld for any reason, sending a Notice of Intent to Make a Bond Claim along with a Prompt Payment Demand Letter is generally a best practice for encouraging payment. Prompt payment demands should specifically mention the prompt payment statute in the project’s state while noting that payment is late and that the demand is a claim for the payment plus any penalties, interest, attorney fees, or other remedies available under the state’s prompt payment statute.

Oregon prevailing wage laws

Prevailing wage is the minimum hourly wage rate, including all fringe benefits, that needs to be paid for covered work duties performed on public works projects. In Oregon, the prevailing wage rates include an hourly Base Rate and an hourly Fringe Rate, with the combination of these two amounts being necessary to be paid to workers.

The prevailing wage rates for Oregon public works projects vary greatly and are dependent on the type of work performed, the county in which the work is performed, and the date when the public entity first advertised the project. Due to this, it’s possible that contractors could work on two prevailing wage projects at once but have two different prevailing wage rates for the same classification of work, making it imperative to be aware of the county and public entity’s prevailing wage requirements.

Importantly, not all public works projects in Oregon are subject to the state’s prevailing wage laws. Projects with total costs below $50,000 or which don’t use funds from a public agency may not be included. When it applies to a project, however, it’s a pivotal part of the process for contractors. State law requires employers to post the prevailing wage rates in a clearly visible place on the project and submit certified payroll for all work on covered projects to the contracting public agency — and failure to do so can lead to heavy penalties.

Protect your payment rights on every public project

Though there are a number of guidelines that need to be followed in order to secure payment rights on public projects in Oregon, going the extra mile to protect your payment rights can help to ensure that you’ll receive the right payment for your work in any situation.

Even though preliminary notices are not required on public projects in Oregon, it’s important to consider their importance to the payment process and consider sending them even when they’re not needed. Sending a preliminary notice maintains a line of communication throughout the chain on a construction project, giving all contractors involved the opportunity to make sure that payment disputes are taken care of earlier on in the process rather than later. 

When a company is dealing with documentation like what is needed for preliminary notices and bond claims, proper document retention and management is an absolute necessity when it comes to protecting your payment rights. Especially when sending notices and maintaining the proper documents needed for claims, it can be enormously beneficial for you to have an organized policy for document retention.


Contractor’s Guide to License Reciprocity: Working Across State Lines

When it comes to growing a construction company, there are two routes to take: take bigger projects or take more projects. For many contractors, their growth plan includes taking on jobs in different states. Whether it’s to take a one-off project or to establish a new location, working in a new state can open more doors. And, with some states offering contractor license reciprocity, the process might be more streamlined than you think.

Read the full guide to contractor licensing in every state

What is contractor license reciprocity?

Contractor license reciprocity is when states recognize a license acquired in another state, without requiring the contractor to go through all of the steps to get a new license. Consider the way states treat your driver’s license: You don’t need to prove that you can drive in each state. Each state recognizes the driver’s license of every other state: that’s reciprocity. Of course, contractor license reciprocity isn’t quite that simple.

Depending on the state and the type of business you run, you most likely need to get a license to perform construction work in your state. Getting a license can be expensive and time-consuming, as some states require classes, years of experience, tests, and other stipulations to weed out unqualified license applicants.

Getting that contractor license is worth it, but it’s not something you’d want to do every time you perform work in a new state. For that reason, many states offer contractor license reciprocity. Instead of requiring a licensed contractor to go through the licensing process again, the new state recognizes the contractor’s license issued in another state. This saves the contractor time and money and allows them to get to work and expand their business faster. 

How license reciprocity works

On paper, it sounds like an open border policy, but that’s not exactly the case. Contractors licensed in one state cannot just take projects in another state, even if it offers reciprocity. There’s a bit more to it than that.

In most cases, a contractor will still need to obtain a license for the type of work they’ll be performing in the new state. Contractor license reciprocity simply streamlines that process. Instead of producing proof of employment, proof of apprenticeship programs, college transcripts, and other paperwork, the reciprocal state allows the license to fulfill those requirements. However, the main advantage to reciprocity is not having to pay for, take, and wait for the results of another trade examination.

Contractors will still need to pay the appropriate license fees and meet any bond requirements that might exist within the state. 

Qualifying for Reciprocity 

The best way to look at a contractor license reciprocity is as a shortcut — it’s not an automatic entitlement. You still have to qualify for reciprocity from a state that offers it. You should also realize that while many states won’t require a trade exam, some do require business exams before you qualify for a reciprocal license. 

Also, some states will require you to hold your license for a certain amount of time — Florida requires 10 years — before you qualify for reciprocity. They’ll also require your license to be in good standing with the licensing board. 

In some cases (such as in California), contractors need to forward the reciprocity form to their original issuing board for review. This is worth noting as it could be another step to take before qualifying for a reciprocal license.

Reciprocal license in multiple states

Your company can carry as many licenses as you have the resources and desire to. For instance, if there are four states that recognize the license from your state, you can carry all four licenses as long as you pay the fees, fill out the required paperwork, and meet any bonding or exam requirements.

But just because a state doesn’t have a reciprocal agreement with your state doesn’t mean you can’t carry a license there. You’ll simply have to apply, meet the requirements, and take the full exam like any other contractor. Once you carry that license (through the typical route), you might qualify for licenses in states that have reciprocity agreements with that state. 

It’s worth noting that getting a reciprocal license in one state does not then open the doors to obtaining reciprocal licenses in other states. For example, licensed electrical contractors in Oregon can receive a reciprocal license in Utah. That does not entitle them to apply for a reciprocal license in California through the reciprocal agreement between California and Utah. They will have to go through the same licensing process in those other states as any other contractors. 

State-by-State Contractor License Reciprocity

Each state takes its own approach to contractor license reciprocity. Some states accept licenses from contractors in neighboring states, while some states will accept licenses from states across the country. On the other hand, some states don’t recognize licenses from other states at all, neighboring or otherwise.

Also, understand that certain states will offer reciprocal licenses for certain license types, but not all. A state might offer a reciprocal license to electricians from a particular state, but not plumbing contractors from that same state. It boils down to the agreements between licensing boards, and many states have a separate board for each trade.

States with no reciprocal agreements

These states do not offer reciprocity to contractors licensed in other states:

  • Connecticut
  • Hawaii
  • Illinois
  • Indiana
  • Kansas
  • Michigan
  • Missouri
  • New Jersey
  • New York
  • Rhode Island
  • Wisconsin
  • Pennsylvania

All other states below have specific agreements with, or recognize licenses from, specific states.

Alabama

Alabama has license reciprocity with a number of states for both General Contractors and electrical contractors. Plumbing contractors, however, will need to go through Alabama’s licensing process. The Plumbers and Gas Fitters Examining Board does not provide reciprocity for plumbing contractors with any states.

  • General contractors have reciprocity with Arkansas, Mississippi, Louisiana, and Tennessee. (Learn more.)
  • Alabama offers electrical contractors license reciprocity with Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. (Learn more.)

Read the guide to Alabama contractor licensing

Alaska

Alaska only offers license reciprocity for electrical contractors. Other trades need to go through Alaska’s full contractor licensing process.

  • Alaska has electrical contractor license reciprocity with Arkansas, Colorado, Iowa, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming. (View details on the application.)

Read the guide to Alaska contractor licensing

Arizona

Arizona offers contractor license reciprocity with three neighboring states: California, Nevada, and Utah.

Learn more about Arizona contractor licensing

Arkansas

In Arkansas, reciprocity is available to general contractors and electrical contractors.

The Contractors Licensing Board State of Arkansas provides contractor license reciprocity with Tennessee, Mississippi, Alabama, and Louisiana. (Read more info from the ACLB.)

Arkansas provides reciprocity for electrical contractors, but the availability depends on their classification. Master electricians only have reciprocity with Oregon. However, journeyman license reciprocity is available with Alaska, New Mexico, Minnesota, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, South Dakota, Texas, Utah, and Colorado.

Read the guide to contractor licensing in Arkansas

California

California has reciprocal contractor license agreements with just three states: Arizona, Louisiana, and Nevada. (Learn more about California’s requirements.)

Learn more about California’s contractor licensing rules

Colorado

Colorado only offers license reciprocity for certain electrical contractors. The state doesn’t issue general contractor licenses, and no reciprocal agreements are unavailable for plumbing contractors.

Colorado provides license reciprocity for journeyman electricians with Alaska, Arkansas, Idaho, Iowa, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, South Dakota, Utah, and Wyoming. (Learn more.)

Read the guide to Colorado contractor licensing

Delaware

Delaware has reciprocity for electrical and plumbing licenses from some states, reducing the examinations and paperwork required. Note: All contractors from Pennsylvania are ineligible to apply for any license by reciprocity, and must apply by examination.

Electricians can apply by reciprocity “if you hold a current license of the same type for which you are now applying that was issued by another state, U.S. territory or District of Columbia.”

Delaware provides reciprocity for plumbing licenses with Connecticut, Iowa, and Maryland. Because the licensure standards in these states are substantially similar, no proof of experience is required. However, all applicants must meet the state requirements.

Delaware also has reduced licensing requirements for plumbing contractors from Alabama, Arkansas, District of Columbia, Florida, Georgia, Michigan, New Hampshire, New Jersey, North Carolina, Ohio, Rhode Island, South Carolina, Virginia, and West Virginia. However, if you’re applying from one of these states you must “submit proof of your experience under the supervision of a master licensee for at least seven years after licensure.”

The state doesn’t issue general contractor licenses, so there’s no need for reciprocal agreements there.

Read the guide to contractor licensing in Delaware

Florida

In 2020, Florida passed new laws allowing all contractors that have been in business for at least 10 years — in any state — to apply for a reciprocal license, also known as “endorsement.” They must be applying for the same or similar license in Florida that they hold in their home state.

Contractors without 10 years’ experience may still qualify for endorsement in Florida, depending on the state they’re licensed in. Florida offers reciprocity for license from any state where the certification process is “substantially equivalent to the certification criteria that existed in [Florida] at the time the certificate was issued.”

Learn more about contractor licensing in Florida

Georgia

In Georgia, commercial general contractors can apply for reciprocity from Louisiana, Mississippi, and Tennessee. They must hold a commercial contractor’s license with a classification of “building construction,” obtained by state examination.

Residential contractors can apply from Mississippi, South Carolina, and Louisiana. Georgia requires a current active Residential Builders license obtained by state examination.

You can download an application for license reciprocity from the Georgia Secretary of State Forms page.

Learn more about Georgia contractor licensing

Idaho

Idaho offers a reciprocity to licensed journeyman electricians from Colorado, Maine, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, and Wyoming. Master electricians only have reciprocity from Wyoming.

Contractors must have tested for the current license and held it for one year. In addition, they must show proof of four years of schooling and on-the-job training. (Learn more.)

Idaho gives reciprocity to journeyman plumbers from Montana, Oregon, and Washington.

Read the Idaho guide to contractor licensing

Iowa

Iowa has electrical license reciprocity with Alaska, Arkansas, Colorado, Minnesota, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin.

License reciprocity is available in Iowa to plumbing contractors from South Dakota who earned their license by passing a written examination. Download an application from the IDPH.

Read the guide to contractor licensing in Iowa

Kentucky

Kentucky has electrical license reciprocity with Louisiana, Ohio, Virginia, West Virginia. There’s no explicit license reciprocity for plumbers.

Learn more about contractor licensing in Kentucky

Louisiana

Louisiana offers license reciprocity contractors in California, Utah, Texas, Oklahoma, Arkansas, Mississippi, Tennessee, Kentucky, Ohio, South Carolina, Georgia, Alabama, and Florida. View map.

Contractors with a license from states with reciprocal agreements are recognized without needing to take the Louisiana trade exam. They must be free of license violations in their home state within the past 3 years.

Read the guide to contractor licensing in Louisiana

Maine

Electrical contractors from these states have license reciprocity in Maine: New Hampshire, Vermont, Idaho, North Dakota, Oregon, Wyoming (depending on classification for all states). View application.

Maine doesn’t have explicit plumbing license reciprocity, but a licensed contractor can apply for review.

Maryland

Maryland has license reciprocity for electrical contractors from DC, Delaware, Virginia, and West Virginia. There’s no license reciprocity for home improvement contractors or out-of-state plumbers.

View Maryland’s contractor license rules

Massachusetts

Massachusetts recognizes electrical licenses from New Hampshire. The state doesn’t have reciprocity for general contractor licenses, but licensed contractors can apply for review. 

Read the guide to Massachusetts contractor licensing

Minnesota

Minnesota has reciprocity for Class A journeyman electrical licenses from Alaska, Arkansas, Colorado, Iowa, Montana, Nebraska, North Dakota, South Dakota, and Wyoming. Class A master electricians have license reciprocity from Iowa, North Dakota, South Dakota, and Nebraska. Learn more from the Minnesota Department of Labor and Industry, or download an application.

Plumbing contractors have reciprocity in Minnesota if they’re from North Dakota or South Dakota. Learn more or download an application.

Read the Minnesota guide to contractor licensing

Mississippi

Mississippi has a variety of reciprocity agreements for contractors of all types from Alabama, Arkansas, Georgia, Louisiana, North Carolina, South Carolina, and Tennessee. Learn more from the Mississippi State Board of Contractors.

Read the full guide to contractor licensing in Mississippi

Montana

The Montana State Electrical Board offers reciprocity for residential electrician licenses from Alaska, Arkansas, Colorado, Minnesota, North Dakota, Nebraska, New Hampshire, New Mexico, Oklahoma, South Dakota, Texas, and Wyoming. The Board will verify the license directly with the state.

Montana also recognizes electrical licenses from Alabama, Connecticut, DC, Hawaii, Idaho, Iowa, Massachusetts, Maine, Michigan, Oregon, Rhode Island, Virginia, Utah, Vermont, West Virginia, and Washington. Contractors must obtain license verification from their state for submission to the Montana Board.

Journeyman plumbers have license reciprocity in Montana if they’re licensed in Oregon, Idaho, North Dakota, or South Dakota.

Read the guide to contractor licensing in Montana

Nebraska

Nebraska has reciprocity for electrical contractors from Alaska, Arkansas, Colorado, Iowa, Idaho, Minnesota, Montana, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming. The state also recognizes municipal licenses from Fremont, Nebraska and Hastings, Nebraska.

Read the guide to Nebraska contractor licensing

Nevada

Nevada recognizes general contractor, electrical, and plumbing licenses from Arizona, California, and Utah.

Learn more about Nevada contractor licensing

New Hampshire

New Hampshire Electricians’ Board offers reciprocal licensing for electrical contractors from Alaska, Arkansas, Colorado, Indiana, Massachusetts, North Dakota, Utah, or Wyoming.

Read the guide to contractor licensing in New Hampshire

New Mexico

New Mexico offers electrical license reciprocity with Alaska, Arkansas, Colorado, Idaho, Montana, Nebraska, Oklahoma, South Dakota, Texas, Utah, and Wyoming. The state has no plumbing license reciprocity agreements.

Read the contractor licensing guide in New Mexico

North Carolina

North Carolina doesn’t have full reciprocity for GCs, but exam waivers are available to contractors from South Carolina, Tennessee, Louisiana, Georgia, and Mississippi.

NC recognizes electrical licenses from Alabama, Florida, Georgia, Louisiana, Mississippi, Ohio, South Carolina, Texas, Virginia, and West Virginia. Learn more.

Read the North Carolina guide to contractor licensing

North Dakota

North Dakota has electrical license reciprocity with Minnesota, South Dakota, Alaska, Colorado, Idaho, Iowa, Maine, Montana, Nebraska, New Hampshire, Utah, and Wyoming. Learn more.

Plumbing license reciprocity is available for contractors licensed in South Dakota, Minnesota, or Montana. Learn more.

Read the North Dakota guide to contractor licensing

Ohio

Ohio has reciprocity for electrical licenses from West Virginia, Kentucky, North Carolina, South Carolina, Louisiana, and Tennessee. Reciprocity is only offered to those who have taken the state recognized test. If you grandfathered in, you are not eligible to reciprocate.

The state offers reciprocity for plumbing licenses from West Virginia and Tennessee.

Oklahoma

Oklahoma offers electrical license reciprocity to licensed contractors from Alaska, Arkansas, Colorado, Idaho, Iowa, Montana, Nebraska, South Dakota, Texas, or Wyoming. Read the guidelines.

Oregon

Oregon has reciprocity agreements for electrical licenses from Arkansas and Utah. Learn more.

Plumbing license reciprocity is available for contractors licensed in Idaho, Montana, Arkansas, Maine, Utah, Washington, or Wyoming. Learn more.

South Carolina

South Carolina has contractor license reciprocity: Alabama, Georgia, Louisiana, Mississippi, North Carolina, Ohio, Tennessee, Texas, Utah — and the City of Reading, Pennsylvania (but not the rest of the state).

Contractors must have taken an approved technical exam. Licensees that were grandfathered or obtained through a waived exam from another state do not qualify for reciprocity.

Read South Carolina’s contractor licensing guide

South Dakota

South Dakota offers reciprocity for electrical contractors licensed in Alaska, Arkansas, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah, or Wyoming. Contractors must have earned the license by examination, and must have held it for at least one year. Learn more.

Read the South Dakota contractor licensing guide

Tennessee

Tennessee has contractor license reciprocity agreements with:

  • Alabama (General, Electrical, Residential, and HVAC)
  • Arkansas (Commercial/Residential Building only)
  • Georgia (Commercial Building and Electrical)
  • Louisiana (Residential, Commercial, Electrical and Mechanical)
  • Mississippi (Residential, Commercial, Electrical, Mechanical)
  • North Carolina (Residential/Commercial Building, Electrical)
  • Ohio (Electrical, Plumbing, HVAC)
  • South Carolina (Commercial Contractors Licensing Board)
  • West Virginia (Residential, Commercial, Industrial Building, Electrical, Mechanical, Masonry)
  • NASCLA (National Commercial Exam)

Read the guide to contractor licensing in Tennessee

Texas

Texas has reciprocity for electrical licenses from different states, depending on the license type.

  • Master Electrician: Louisiana (state contractor’s license) and North Carolina (master electrician or unlimited electrical contractor)
  • Journeyman Electrician: Alaska, Arkansas, Idaho, Iowa, Montana, Nebraska, New Mexico, Oklahoma, South Dakota and Wyoming

Read the Texas guide to contractor licensing

Utah

While Utah doesn’t have specific reciprocity agreements, they do recognize licenses from certain states.

Utah allows out-of-state contractors with one year of licensed experience to opt out of the licensing exam.

Electrical contractors from any US state who have held a license for at least a year and are in good standing may qualify for licensure by endorsement in Utah. Contractors from states where Utah deems the licensing process equivalent have fewer requirements. Learn more:

Read the Utah guide to contractor licensing

Vermont

Vermont has electrical license reciprocity for master electricians and journeyman electricians from Maine and New Hampshire.

Read the Vermont guide to contractor licensing

Virginia

Virginia has reciprocity for electrical contractor licenses from Alabama, District of Columbia, Kentucky, Maryland, West Virginia, or North Carolina. Anyone applying by reciprocity or by examination exemption must submit a complete application along with verification of licensure from the out-of-state board. Learn more.

While Virginia doesn’t have plumbing license reciprocity agreements with other states, they do have an agreement with the Washington Suburban Sanitary Commission.

Read the Virginia guide to contractor licensing

Washington

Washington only has plumbing license reciprocity for journeyman plumbers from Idaho. Other out-of-state plumbers can present a license or showequivalent military experience for consideration. Learn more.

Read the Washington guide to contractor licensing

West Virginia

West Virginia has several license reciprocity agreements with Ohio, Alabama, Tennessee, and North Carolina, varying by trade. Learn more.

Read West Virginia’s guide to contractor licensing

Wyoming

The State of Wyoming offers reciprocal licenses to journeyman electricians from Alaska, Arkansas, Colorado, Idaho, Maine, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas and Iowa.

A reciprocal Master Electrician license is only available to contractors from Idaho, South Dakota and Iowa. Learn more.

Read the Wyoming guide to contractor licensing


Best of 2022: Top Construction Lawyers in Miami

Miami is consistently one of the country’s fastest-growing cities, keeping construction companies busy year-round. But despite booming business, contractors in The Magic City carry a lot of legal risk. The building industry is complex, and disputes over payment, delays, or defects are increasingly common. Construction projects in Miami are frequently subject to claims and lawsuits. While not every construction dispute or payment problem requires an attorney, having professional legal guidance is crucial. The best construction lawyers in Miami are on top for a reason: They understand the industry and can help contractors navigate Florida’s unique local laws and regulations. 

View all financial & legal resources for construction businesses in Florida

When do contractors need a construction lawyer?

For GC’s, subcontractors, and suppliers alike, construction lawyers offer both preemptive advice and reactionary guidance. 

Attorneys help review construction contracts before anything gets signed, spotting points of potential contention and fixing any liability issues. Unfortunately, disputes are bound to still arise and a good construction lawyer will help ensure everyone gets paid. While anyone can file a mechanics lien, enforcing a lien and filing a lawsuit should be done with professional advice.

Top 8 construction attorneys in Miami

As is the case with other cities and states, Florida and the Miami metro area have particular construction laws and regulations of their own. These premier lawyers in the area are all members of the construction law section of the Florida State Bar Association, actively work construction cases in southern Florida, and create content to help answer contractor questions.

David Adelstein

David Adelstein is a construction attorney practicing throughout Florida who truly has involved himself with every aspect of the industry. Partner at Kirwin Norris P.A., David represents industry professionals and owners through a myriad of potential legal work issues. This includes:

  • Construction and design defect claims
  • Schedule-based claims
  • Bid protests
  • Payment and contract disputes
  • Insurance coverage disputes
  • Lien and payment bond claims
  • Licensing issues
  • Worker compensations
  • Contract construction and negotiation

David is the author of Florida Construction Legal Updates, a law blog where he explains complex legal concepts and how to use the law to navigate construction disputes. He has also published three ebooks on construction law: Miller Act Payment Bond Fundamentals, Delay!, and Innovative Attorney’s Fee Arrangements.

Contact David: 

Kirwin Norris
1 West Las Olas Blvd, Suite 500
Fort Lauderdale, FL 33301
(​​954) 295-6117


Jason Lambert

Jason Lambert
Jason Lambert
12 years experience
471 answers

Jason Lambert, an attorney at Dinsmore & Shohl LLP, has focused his practice on representing and advising contractors, subcontractors and material suppliers. He has over a decade’s worth of experience and knowledge under his belt, gained from hands-on work in the construction industry. He has spent time as a project manager and operations director for the same types of companies that he now represents. Jason’s representation includes work with: 

  • Drafting contracts and other corporate documents
  • Resolving payment and lien disputes
  • Addressing construction defect claims
  • Implementing new procedures to prevent recurring problems

Beyond the scope of his clients, Jason is committed to improving the construction industry as a whole. He is the current President of the Tampa Bay Area Chapter for the National Association of the Remodeling Industry and is also on the Board of Directors for Habitat for Humanity of Hillsborough County.

Jason also publishes an excellent construction law blog, Hammer and Gavel, on which he provides an insightful look into Florida laws and court decisions that construction businesses need to know. 

Mr. Lambert graduated with a J.D. from Stetson University College of Law in 2012, and was recently named on the Florida Super Lawyers Rising Stars list for 2021. Jason is one of the most active, helpful lawyers in the Levelset Community, having answered more than 470 questions from contractors and suppliers in Florida. 

Contact Jason: 

Dinsmore & Shohl
201 N. Franklin Street, Suite 3050
Tampa, FL 33602
(813) 543-9848


Jennifer Felipe

Jennifer Felipe has been representing general contractors, subcontractors, and design professionals in Miami-Dade County and Broward County since 2015. Jennifer founded Felipe Law P.A. in 2019. 

Bilingual in English and Spanish, Jennifer handles a variety of construction concerns, including:

  • Insurance coverage for construction defect claims
  • Arbitration, mediation and litigation of complex construction claims
  • Drafting, interpreting, and enforcing construction contracts
  • Misrepresentation and fraud claims
  • Breach of warranty claims
  • Construction liens
  • Strict liability construction claims

For the University of Miami School of Law graduate (J.D.), professionalism is key.

Contact Jennifer: 

Felipe Law
848 Brickell Avenue, PH5 
Miami, Florida 33131
(305) 307-8525


Paul Washington

An associate at Taylor Espino Vega & Touron, Paul Washington has more than 12 years of experience as a construction attorney. Based out of Coral Gables, Paul has put a focus on helping contractors navigate the sometimes convoluted process of filing and enforcing a mechanics lien. He provides advice and ensures that his clients receive the money they have worked hard for. 

Graduating from Florida State University in 2008 with a J.D., Paul has remained in the state to provide premier legal service in construction and commercial litigation matters. He has received upstanding feedback from his clients as he continues to build his resume with cases in the state courts. 

Contact Paul: 

Taylor Espino Vega & Touron
201 Alhambra Circle, Suite 801
Coral Gables, FL 33134
(305) 443-2043



Cristopher Rapp

Senior Associate Cristopher Rapp operates out of Rosenbaum PLLC in West Palm Beach, and has 17 years of experience settling construction discourse. He has focused his practice on the resolution of business disputes, construction litigation, and landlord/tenant matters. This includes experience with:

  • Construction lien and defect matters
  • Contract disputes of all kind
  • Non-competition provision enforcement
  • Real estate litigation (state and federal)

Cristopher attended Princeton University and went on to graduate from University of Virginia School of Law in 2004 with a J.D. 

Former editor-in-chief of The Journal of Law and Politics, he now handles legal matters throughout the whole of Florida, predominantly in Palm Beach, Broward, Miami-Dade, Martin, and St. Lucie counties. 

Contact Christopher: 

Rosenbaum Attorneys at Law
250 South Australian Avenue, 5th Floor
West Palm Beach, FL 33401
(561) 653-2900


Andy Wyman

Andy Wyman
Andy Wyman
29 years experience
9 answers

Andy Wyman is an attorney at and founder of Wyman Legal Solutions. The business has been operating out of Miami for 20 years, and he has a quarter of a century’s worth of legal construction experience to his name. Andy’s practice thrives where construction, business, insurance, and real estate intersect. 

While the firm’s practice areas primarily include litigation/arbitration and common interest developments, Andy has a wide area of expertise, including:

  • Business partnership disputes
  • Breach of fiduciary duty
  • Deceptive and unfair trade practices
  • Employee dishonesty
  • Contract disputes

With so much experience settling disputes, Andy is remarkably proficient at analyzing business structure and practices, predicting precisely where a business is most likely to suffer a liability. 

Since graduating from Fordham University School of law in 1996, Andy has grown as an expert in understanding and caring about the concerns or goals of a company, providing proficient legal advice. 

Contact Andy: 

Wyman Legal Solutions
2263 NW Boca Raton Blvd, Suite 204
Boca Raton, FL 33431
(561) 361-8700


Nicholas Fernandez

Nicholas Fernandez
Nicholas Fernandez
7 years experience
57 answers

A Miami native and bilingual in English and Spanish, Nicholas Fernandez has spent the last several years building an impressive resume in construction law. After several clerkships, Nicholas earned a spot as an associate attorney with The Barthet Firm, a Miami-based legal team entirely dedicated to the practice of construction law. 

Nicholas has already resolved a number of higher-profile construction disputes via mediation, trial, and arbitration. He has managed to build a strong clientele, representing both owners and contractors in a variety of contract, lien, and bond claims. 

An Articles and Comments Editor for the University of Miami Business Law Review, Nick was selected to participate in the Willem C. Vis Moot Court in International Commercial Arbitration in Vienna, Austria. 

Outside of his regular caseload, Nicholas takes time to help contractors and suppliers — he has answered 57 legal questions and counting in the Levelset Community.

Contact Nicholas: 

The Barthet Firm
200 S. Biscayne Blvd, Suite 1650
Miami, Florida 33131
(305) 347-5295


Oscar Soto

Furnished to tackle the challenges and expectations of contractors, subs, developers, and sureties alike, stand Oscar Soto and his problem-solving firm. The Soto Law Group is an experienced team of attorneys focusing on construction law/litigation, employment law, and insurance defense. 

Mr. Soto himself is the managing partner of the firm, serving as legal counsel to a number of owners, developers, design professionals, contractors, insurance companies, sureties, and suppliers.

Oscar’s service is based on how the client’s business operates within the industry, and uses his wealth of experience to their benefit:

  • Affiliated with one of Broward County’s oldest and most respected firms — Fleming, O’Bryan, & Fleming — as an associate and later as a partner/shareholder
  • Member of the Florida Bar’s Client Security Fund Committee 
  • Member of the Broward County Bar Association’s Construction Industry Law Committee
  • Served as a Code Enforcement and Blasting Hearing Officer for Broward County
  • Extensive practice with trials, arbitration and mediation

The managing partner attended The American University and went on to obtain his J.D. from Boston University School of Law in 1988. An active member of the Levelset Community, Oscar has answered 11 legal questions from contractors and suppliers in Florida. 

Contact Oscar: 

The Soto Law Group
Coastal Tower 
2400 East Commercial Boulevard, Suite 400 
Fort Lauderdale Florida 33308
(954) 567-1776


There will always be more attorneys out there ready to help, and Levelset is here to help find them. Find a construction lawyer or get answers to any construction legal questions in the Levelset Payment Center & Community. Talk with industry professionals and learn more about any other pressing legal issues.


Workers’ Compensation Insurance for Contractors

Workers’ compensation insurance is required for contractors with employees in most states. It covers injuries and illnesses that occur while workers are on the job, and protects companies from lawsuits regarding injuries and illnesses. General contractors and subcontractors both need workers comp insurance, unless they’re a sole proprietorship.

We’re going to take a closer look at what workers comp covers, how it works, and how much it costs.

What is workers’ compensation insurance?

Workers’ compensation insurance covers medical costs and lost wages for work-related injuries and illnesses. This type of insurance is required in almost every state for businesses that employ workers. Some states require that all contractors have compensation insurance, such as Pennsylvania, while others, like Georgia, only require it when a business has three or more employees.

Four states have a required fund that provides workers comp insurance to all businesses operating in the state: North Dakota, Ohio, Washington, and Wyoming. Businesses must purchase workers comp insurance from the state fund, or show they have adequate coverage from an outside insurance company.

Most workers’ comp insurance policies exclude management and ownership, however, coverage for these positions can be purchased if desired.

Why do you need workers’ compensation insurance?

Construction is a high-risk industry. Injuries or illnesses caused by the work environment can cost companies a lot of money, not just in medical expenses but also worker downtime. Workers comp insurance helps to mitigate the potential high costs of injuries and illnesses.

Workers comp covers the medical expenses and partial lost wages for sick or injured employees. The injured worker deals directly with the insurance company and their medical provider. This helps the company to continue to focus on their business.

Workers comp often includes employers’ liability insurance, which covers a company if an employee sues the owner over an injury or illness. Employers’ liability covers attorney’s fees, court costs, and settlements.

Learn more about insurance for contractors: 16 Types of Insurance for Construction Businesses

What workers’ comp insurance covers

Workers compensation insurance covers the following costs related to a work-related injury or illness:

  • Medical costs, such as an emergency room visit or treatment
  • Ongoing costs, such as rehabilitation or physical therapy
  • Partial lost wages while the employee is unable to work
  • Attorney’s fees, court costs, and settlements if sued by an employee

Related coverage: Top 8 Construction Health and Safety Hazards

How much it costs

According to Progressive Insurance, the average monthly cost for workers’ compensation insurance in 2020 was $86. However, the rate a particular company pays is based on three factors: worker classification, experience modification rate, and the amount of payroll paid.

Worker classifications are based on the type of work each worker is performing. Examples include carpenter, laborer, and office work. The more risk involved in the work, the higher the insurance rate.

The experience modification rate, or EMR, is dependent on the claims history of the company. A standard EMR is 1.0. The lower your EMR, the fewer claims you’ve made, and the higher the EMR, the more claims you’ve made. The EMR is usually adjusted every year.

Workers comp insurance is also based on the amount of payroll that a company pays. To calculate the workers’ comp premium, the following formula is used:

Classification rate x EMR x (Payroll $ / 100) = Premium

To ensure that the correct premium has been paid, most insurance companies audit a company’s payroll records once a year. They use this time to confirm the amount of payroll paid, confirm the classifications used, and ensure that the correct premium was paid.

FAQs about workers compensation

What doesn’t workers compensation insurance cover?

Any injuries or illnesses that occur outside of work, intentional injuries, injuries that occur while commuting to and from work, and injuries due to intoxication or substance abuse.

Who is covered by workers compensation insurance?

This varies based on where the business operates from. For example, certain types of employees, like seasonal workers, may not be covered by workers comp in some states. Contact an insurance company in your area to determine who is covered in your state.

Does a sole proprietor need workers compensation insurance?

Most states don’t require sole proprietors to carry workers compensation insurance, but laws vary. You can always choose to purchase this insurance if you desire.

Are subcontractors covered under workers compensation insurance?

In some states contractors can be entitled to workers compensation coverage if they’re injured or become ill on the job. Contact a local agency to determine the laws in your area.


Little Miller Acts: Bond Requirements on State Construction Projects

All 50 US states have adopted ‘Little’ Miller Acts. These laws protect first-tier subcontractors and suppliers on state-funded projects, ensuring that they get paid. Since public projects are not subject to mechanics liens, these Little Miller Acts are vital to protecting payments on public projects.

What is the Little Miller Act?

Let’s start with the Miller Act. The Miller Act was passed in 1935 and applies to federally funded public works projects. It protects suppliers, first-tier subcontractors, and the federal government by requiring general contractors to purchase performance and payment bonds on each project.

These bonds protect the government from unfinished work and protect first-tier suppliers and subs from nonpayment. If a sub or supplier is not getting paid, they can file a claim against the payment bond on the project. The surety investigates the claim and pays them if the claim is legitimate.

The Little Miller Act is the name given to the collection of state laws that are based on the federal Miller Act. Like the Miller Act, the Little Miller Acts require general contractors on state-funded public works projects to purchase performance and payment bonds.

However, the terms of each state’s laws are different.

General terms of Little Miller Acts

Although each state has its own set of laws regarding performance and payment bonds on state-funded projects, there are some similarities.

Each state says that the general contractor must purchase performance and payment bonds on state-funded public works projects. Usually, there is a baseline contract amount that has to be exceeded before bonds need to be purchased. For example: In Texas, bonds are required on projects over $25,000; in Nevada, it’s $100,000.

The value of the bonds also varies, as some states, like Alabama, only require a bond for 50% of the contract value. Requirements like these can make collecting difficult if you delay filing a claim. That’s why it’s always good to file as soon as possible.

Some states require subcontractors and suppliers to submit a preliminary notice before beginning work on a project. This notice may need to be sent to the owner, the general contractor, and possibly recorded with the county clerk. Failing to submit a preliminary notice when required may invalidate your right to file a bond claim, so make sure you find out if one is required before you start work.

If a first-tier supplier or subcontractor hasn’t been paid, they have a certain number of days after the project is completed to file a payment bond claim. The amount of time they have to file varies by state and can be anywhere from 75 days to a year. If you miss the deadline for filing a bond claim, your claim will be denied.

Little Miller Acts – State-By-State

Since each state has different requirements, we’ve created guides for each one. Simply click on the state name to be taken to the page with everything you need to know about that state’s Little Miller Act.