The Basics of Reciprocity in the Construction Industry

Working in the construction industry carries many significant advantages. You can gain experience and work your way up the ladder with minimal formal education, gain skills that you can use in your personal life, and, best of all, have the opportunity to create your own business. General contractors, for example, can expand their businesses far and wide if they work hard to network and produce great results. However, a company with widespread success must do what it can to avoid being limited to one region or area. 

General contractors, much like lawyers and foreign medical professionals, have to meet specific requirements to work in different states. In other words, there is no unanimity between states when it comes to licensing requirements; therefore, each sets its own. In situations where a contractor's business is located near a border with another state or can expand, being unable to work in both areas can be damaging to your business. For this reason, it is essential to learn about reciprocal agreements and reciprocal licensing requirements for contractors between states. 

Reciprocity refers to recognizing and accepting a license from another state by the state where you are trying to conduct your business. Understanding the reciprocal agreements between the states where you would like to work can save you ample time and money, allowing you to skip over preliminary apprenticeship, documentation, and testing requirements. However, it's not as simple as it might seem. A reciprocal license does not mean your current license will suffice as is. While there might be recognition of your current license in a state, you will likely still be required to go through additional licensing fees and potentially even further testing depending on the state and your current license. Additionally, keep in mind that many states do not offer reciprocity licensing at all, in which case you will have to go through the licensing process in its entirety. 

The best way to look at a reciprocal licensing agreement is as a helpful shortcut. Doing your research on getting a reciprocal license can keep you from spending unnecessary time and money going through the steps of getting a new license in every state you would like to do work. Advance your company and get ahead of the game by going on the state's government website and looking up the reciprocal licensing requirements for your area of expertise.


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