Hiring tradespeople in the US: licences, rights & checks

Hiring contractors in the United States: what's different

Our main hiring guide covers the universal steps. In the US, contractor licensing, permits and consumer protections are mostly set by states and cities, so what you check depends on where you live.

Check the state license

Most states license electricians and plumbers, and many license general contractors or home improvement contractors above a certain job value. Requirements vary widely. Search for your state's contractor licensing board and check the license number, the license class, and any complaints or disciplinary actions. Some cities and counties have their own licenses too.

Insurance and bonding

Ask for a certificate of liability insurance, issued by the insurer, with you named as certificate holder. If the contractor has employees, ask about workers' compensation coverage; if an uninsured worker is injured on your property, you could face a claim. Some states require contractors to be bonded, which provides a source of compensation if they don't complete the work or meet their obligations.

Permits

Building, electrical and plumbing permits are issued by your city or county building department. Unpermitted work can cause problems with insurance, resale and safety. A good contractor will pull the permits and arrange inspections; be wary of anyone who suggests skipping them to save money.

Mechanic's liens

In many states, if your contractor doesn't pay subcontractors or suppliers, they may be able to place a lien on your property, even if you've paid the contractor in full. Protect yourself by asking for lien waivers from the contractor and major subcontractors and suppliers as you make payments, especially on larger jobs.

The FTC Cooling-Off Rule

The Federal Trade Commission's Cooling-Off Rule gives you three business days to cancel many sales of $25 or more made at your home, and $130 or more at temporary locations. Some states have additional cancellation rights for home improvement contracts. Check your state attorney general's consumer protection website.

Payments

Some states limit how much a home improvement contractor can take as a down payment. Pay by check or card, against a written contract, in stages linked to progress. Never pay the full amount upfront.

Getting help

• Your state attorney general or consumer protection office handles complaints.
• Your state licensing board can investigate licensed contractors.
• Small claims court handles modest disputes.
• Report fraud to the FTC at ReportFraud.ftc.gov.

Finding local help

Start with the US services page, then your city page, for example New York or Chicago. Check every contractor's license and insurance before you hire.