Hiring contractors and professionals in the US
The first check for almost any contractor in the US is the licence, spelled license in American English. Unlike the UK, many US states license general contractors and specialist trades, and you can usually look up a licence on a state or local website in a few minutes. The catch is that the rules are set state by state, and sometimes city by city, so the answer always starts with "it depends where you live".
State and local licensing
Licensing in the US happens at several levels:
- State licences. Many states license general contractors, and many license electricians and plumbers at state level. Some states only license work above a certain size, or only certain trades.
- Local licences. In some states, licensing is left to cities or counties instead, so a contractor licensed in one city may not be licensed in the next.
- Handyman rules. Many places let handymen do small jobs without a contractor licence, within limits. The limits vary, and they rarely cover electrical, plumbing or gas work.
- Business registration. A business licence or registration only means the company is registered to trade. It is not the same as a trade licence.
To check a contractor, search your state's contractor licensing board or the relevant city or county office. Confirm that the licence is active, that it covers the type of work you need, that the name matches the company on your contract, and whether there are any complaints or disciplinary actions. If you cannot find the right agency, your state's consumer protection office can usually point you to it.
Bonding
A contractor's bond is a form of financial guarantee, usually provided by a surety company. In some states a licence bond is required to get a licence. If the contractor breaks certain rules or fails to complete work, you may be able to make a claim against the bond.
Two cautions. First, the amount of a licence bond may be small compared with the cost of your project. Second, bonds and insurance are different things. "Licensed, bonded and insured" is a common phrase in adverts, so ask to see evidence of each rather than accepting the phrase.
Insurance
Ask for certificates of insurance, and check they are current and in the company's name:
- General liability insurance covers damage to your property or injury to others caused by the contractor's work.
- Workers' compensation insurance covers the contractor's employees if they are injured on your property. Requirements depend on the state and the size of the business. Without it, there is a risk an injured worker could look to you or your homeowner's insurance.
You can ask the contractor's insurer to send the certificate to you directly, which makes forgery harder. Some homeowners also ask to be named as an additional insured for large projects.
Permits and inspections
Most structural, electrical, plumbing and mechanical work needs a building permit from your city or county building department, followed by inspections at set stages. Permits protect you: inspectors check the work meets local codes, and unpermitted work can cause problems with insurance claims and when you sell.
Agree in writing who pulls the permit. Usually the licensed contractor does. Be wary of a contractor who asks you to pull the permit as an owner-builder, because that can shift responsibility for the work onto you. See our guide to contractor red flags for more warning signs.
Liens and lien waivers
In the US, contractors, subcontractors and suppliers who are not paid can often place a mechanic's lien on your property. This can happen even if you paid your main contractor in full, if the contractor did not pay the people below them.
The usual protection is a lien waiver: a signed document in which the contractor, subcontractor or supplier confirms they have been paid for a stage of work and gives up lien rights for that amount. On larger jobs, ask for lien waivers with each payment, from the main contractor and from major subcontractors and suppliers. Rules and forms differ by state, so check your state's requirements or ask an attorney for a large project.
Consumer protection and complaints
Each state has an attorney general's office, and many have a separate consumer protection agency. These offices take complaints, publish warnings about scams and can explain your rights, including any cancellation rights for contracts signed at home. Some states also run recovery funds that can compensate homeowners harmed by licensed contractors. The state licensing board handles complaints about licence holders.
Before hiring, it is worth searching the contractor's name with your licensing board and local court records for disputes.
Attorneys, CPAs and other professionals
Attorneys are admitted to practise by individual states, and each state has a bar that keeps a public directory. Check that an attorney is licensed in your state and in good standing, and whether they have any disciplinary history. Our guide to lawyer fees explains hourly, flat fee, retainer and contingency arrangements.
CPAs (certified public accountants) are licensed by state boards of accountancy, which also offer lookups. For tax returns, enrolled agents are licensed by the IRS to represent taxpayers. Many other paid tax preparers hold neither credential. See our guide to tax return help.
Reviews and lead sites
Online directories and lead-generation platforms are a common way to find contractors in the US. They are useful for finding names, but they do not replace your own checks. Some sell your details to several contractors at once, and the level of vetting varies a lot. Always verify the licence and insurance yourself.
How hiring differs between the UK and the US
If you have hired in one country and are now hiring in the other, these are the differences that cause the most confusion.
| UK | US | |
|---|---|---|
| Licensing model | No general builder licence. Specific schemes for risky work, such as Gas Safe for gas and competent person schemes for electrics | Contractor and trade licences issued by states or local governments, with rules that vary widely |
| Price documents | A quote is usually a fixed price; an estimate is a guide | Estimate and bid are both common, and neither word reliably tells you whether the price is fixed; check the wording |
| Lawyers | Solicitors (and barristers for court advocacy) | Attorneys, licensed by state bars |
| Trades | Tradesman or tradesperson, builder | Contractor, general contractor, subcontractor |
| Approvals | Building Control (how it is built) and planning permission (what is built) | Building permits and inspections from the local building department, plus zoning rules |
| Unpaid subcontractors | Usually a matter between the builder and subcontractor | Can lead to a lien on your property; ask for lien waivers |
Terminology is worth pinning down in writing either way. Whatever the document is called, ask whether the price is fixed, what it includes, and what would cause it to change. Our guide to getting quotes explains how to compare them line by line, and the UK hiring guide covers the UK side in more detail.
A quick US checklist
- Licence active, correct type, and in the same name as the contract
- Certificates of general liability and workers' compensation insurance
- Bond details, if your state requires one
- Permit pulled by the contractor, with inspections listed in the contract
- A written contract with scope, price, payment schedule and timeline
- Lien waivers collected with each payment on larger jobs
- Attorneys checked with the state bar, CPAs with the state board