You’ve more than likely come across plenty of advice about becoming a contractor in Virginia, but much of this often focuses on the obvious things. This may be something along the lines of getting enough experience, choosing the right business name, applying for a licence, looking for clients, and so on.
The reality of becoming a contractor in Virginia is that there will be certain details that will catch you off guard. So, before investing in equipment or advertising your first major project, here’s how Virginia’s system works.
1. Your Contractor’s Licence Belongs to the Business
One of the first and most important things you must understand about Virginia’s contractor licensing system is that it focuses more on the business entity, rather than the owner. The Virginia Board for Contractors issues licences to businesses as opposed to giving individual general contractor credentials.
As you take your Virginia contractors license preparation courses, you will learn that this licence has two vital parts. The first one is the class, which is meant to control the monetary limits of the work you can handle, and the classification or speciality, which controls the type of work your business may perform.
On top of this, you must also have qualified individuals whom the state will tie your licence to. These employees are the ones who take the necessary exams for licensing and must be replaced when they leave the company.
2. Your Required Licence Class May Change As Your Business Grows
There are three main contractor classes in Virginia, but there’s an element many contractors often miss. Each class has limits that are determined by both the individual projects you’re working on each time and the total value of work within a year.
A Class C licence allows you to take on work valued at more than $1,000 but less than $30,000 for each project, with a maximum yearly total below $250,000. Class B contractor licences allow you to handle individual projects from $30,000 up to $149,000, or a yearly total ranging from $250,000 but less than $1 million. The Class A licence allows you to handle individual projects with no value limit and exceed the $1 million limit for a yearly total.
The 12-month rule becomes especially important as your business is growing. Say, for instance, you are consistently working on smaller jobs valued at a maximum of $20,000 each. While you can use a Class C licence for these, you will need a Class A licence to work on, say, 7 such projects during that year.
3. You Won’t Always Need Technical Expertise
Among the most interesting facts about becoming a contractor in Virginia is that you don’t have to possess every bit of technical expertise represented on your contractor licence. That’s because Virginia allows a business to designate a Qualified Individual (QI) for each speciality. For this, however, there is an experience requirement. The QI must have roughly one year of experience for a Class C licence, three years for Class B, and five years for Class A.
Some specialities may ask for additional licensing and certification requirements, however. The bottom line, however, is that this arrangement creates the perfect opportunity for entrepreneurs with strong business, sales, or management abilities but who lack the technical background for certain work.
4. Subcontractors Often Create Responsibilities for Companies
Hiring a subcontractor doesn’t always mean you’ll be handing responsibilities to someone else. The law in Virginia states that a contractor is responsible for monetary penalties or other sanctions if it directly employs or contracts with someone else lacking a required credential.
Workers’ compensation brings another issue, as you must carry compensation coverage as long as you have more than two employees. As if that’s not enough, you must count employees of certain subcontractors when determining whether this threshold has been met. This makes subcontractor verification one of the most important processes you can have in your company. Some of the documentation you want to focus on includes licences, certifications, and insurance documentation.
Get the Education Boost You Need to Succeed
Now you know that becoming a contractor in Virginia is more than just being an expert in building, remodelling, or managing a job site. The information included in this post educates you on what you need to know before getting into this career.
But there is a lot more you should know, which is where RocketCert’s pre-licensing education comes in. Visit rocketcert.com today to learn more and get started.