Expand Your Electrical or Construction Business Using Reciprocity

The foremost strategy for construction or electrical contractors who want to expand their business is to seek out and take on projects in multiple states. Working in a new state can lead to more opportunities, whether you take on a one-time project or open a new office site. Depending on where your company operates, there may be numerous options to streamline the process because certain U.S. states allow reciprocity for construction and electrical contractor licenses.

What Is License Reciprocity?

Reciprocity in licensing refers to the situation when states accept a license obtained in another state without necessitating the construction or electrical contractor to repeat the exam process. Think about how each state handles your driver’s license: states recognize other states’ driver’s licenses, so you don’t have to prove you can drive in each state.

However, it is not always easy to obtain a license. To carry out construction or electrical work in your state, you most likely need to obtain a license, depending on the state and the kind of business you own. A license can be costly and time-consuming to get since some states filter out unfit applicants with requirements that include years of experience, testing, and other requirements.

Although obtaining a license is extremely worthwhile, you do not need to do so each time you undertake work in a different state because many states provide reciprocity for construction and electrical contractor licenses. A licensed contractor’s license from another state is recognized by the new state, saving them from having to take the exam in that state. Contractors may start working and grow their firms much more quickly because they are saving time and money.

How Does License Reciprocity Work?

Although it may not be quite an open-border policy, licensing reciprocity can sound that way on paper. Even in states where reciprocity is available, construction or electrical contractors licensed in one state are not automatically permitted to accept any kind of project in another state.

For the most part, if you are moving to a new state, you will still need to get a license for the kind of work you plan to do. Reciprocity of construction or electrical contractor licenses just expedites that procedure, specifically eliminating the exam and processing time. The reciprocal state permits your license to satisfy the state’s requirements without requiring the production of documents such as college transcripts, proof of apprenticeship programs, employment verification, or other documentation. But the biggest benefit of reciprocity is that you don’t have to pay for and take a separate trade exam. However, you will still be responsible for paying the relevant license fees and fulfilling any state-mandated bond requirements. This also applies to the many licenses related to construction and electrical, ranging from Air Conditioning (HVAC) and Burglar Alarm to Roofing and Environmental.

How to Obtain Reciprocity in a Different State

You need to meet certain requirements of the state that grants reciprocity. It is important to understand that certain states do demand business examinations in addition to trade tests in order to grant reciprocal licenses.

Additionally, before you are eligible for reciprocity, several states need you to hold your license for a specific period of time (for example, for construction, Florida requires 10 years). Additionally, they’ll need your license to be current with the licensing board.

You may be required to send the reciprocity form to your original issuing board for review in some circumstances (such as in California). It is important to keep in mind that there can be a prerequisite for obtaining a reciprocal license.

Finally, the different rules and regulations of reciprocity agreements can change on a yearly basis. It’s imperative to know what the current guidelines are for the license you want in a different state.

Know Your State’s Reciprocity Agreement

Each state has different licensing requirements which also can differ widely for construction vs. electrical licenses. In addition, not all states even have reciprocal agreements.

For example, Florida allows all construction and electrical contractors that have been in business for at least 10 years in any state to apply for a reciprocal license. They must be applying for the same or similar license in Florida that they hold in their home state. In addition, Florida offers military veterans the same reciprocity opportunities no matter how long you’ve held a license.

Another example of the variation in a state’s reciprocity rules is Arkansas. Arkansas holds reciprocal agreements for General Contractors licensed only in Alabama, Tennessee, Mississippi, and Louisiana. But for electrical licenses, Arkansas has reciprocity agreements with Alaska, Oregon, New Mexico, Minnesota, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, South Dakota, Texas, Utah, and Colorado.

You also need to know the exact requirements for licensing and registration in the state you want to practice because they vary from state to state. For example, using Florida again, this state offers certificates as well as registries. Both require separate application processes but are handled by the same department. While one permits you to work locally, the other permits you to work throughout the entire state. Both, however, necessitate passing regional (or local) exams and state exams, depending on how you are applying.

Or look at Georgia. In this state, commercial general contractors can apply for reciprocity from Louisiana, Mississippi, North Carolina, and Tennessee. But they must hold a commercial contractor’s license with a classification of “building construction,” obtained by state examination.
Because the reciprocity agreements between states vary by both state and type of license, it can get extremely complex to navigate your business expansion path across the country. For the most current information and to see if you are eligible for reciprocity, contact API, the leading licensing services company in the country. API has 30 years’ experience in the licensing reciprocity business and has the knowledge that you need about out of state registration applications and requirements. The company also can help you with Bonding, Liability Insurance, and Workers Compensation Exemptions. They’ll also guide you through the entire process. Call API at 1(800) 947-6939.