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Question:
I heard that there is a new law in Wisconsin requiring Contractors to obtain a license to perform home improvements. Is this true? If it is, what are the requirements?
Answer:
Yes it
is true. It is called the Uniform Dwelling Code (UDC) Contractors Financial Responsibility Certification Program. It is implemented through the Wisconsin Department of Industry, Labor and Human Relations (DILHR) safety &
buildings division. It took effect as of April 1, 1995, but was not strictly enforced until July 1, 1995 to give Contractors extra time to acquire the license.
For most professional Contractors, all the new license
means is a $40 per year fee since the requirements are standard practice for professional Contractors. The requirements are:
1.) The Contractor must have a Workers Compensation Insurance policy in place to cover on the job injuries.
2.) The Contractor must be making contributions to the State Unemployment Compensation fund for their employees.
3.) The Contractor must have a Liability Insurance policy of $250,000 minimum, or purchase a $25,000 minimum bond.
DILHR requires proof of all the above to be submitted with the license application.
The purpose
of the program is to weed out those less responsible Contractors who have been putting their employees and customers at risk by not meeting the above requirements. It may have been due to ignorance, to keep their prices low, to
make more money, or all of the above. The way it is enforced is through the local municipalities. In order for anyone (except the owner) to pull a building permit for construction, they must show their license at the time a
permit application is requested. If the owner pulls the permit, he is given a cautionary statement (and may be asked to sign and date it) that explains that he alone is now at risk for damage to his property, or a work related
bodily injury or death on his property.
Sound a little scary? It should. Workers Compensation Insurance is very expensive because of the risks involved at the average worksite. Legitimate Contractors protect themselves,
their employees and their customers by purchasing insurance policies in case of accident. The down side is that the required policies are a significant percentage of a Contractors overhead expense. It is these type of business
expenses that inevitably will make his price higher than a less responsible Contractor.
In my opinion, the law is a good one. At least the property owner knows he is either going to deal with a responsible Contractor
and pay a little more, or he will take on the risk himself. If you would like more information on the Contractor financial responsibility program call the DILHR in Madison at 608-266-3162.
Answered by: Patrick Benkowski, CR
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