Subcontractors might no longer need special license to work on Louisiana homes

Louisiana lawmakers are considering a proposal that would repeal certain licensing requirements for residential construction subcontractors.

Senate Concurrent Resolution 4, sponsored by Sen. Stewart Cathey, R-Monroe, advanced unopposed from the House Commerce Committee on Monday and will head to the House floor for consideration. A concurrent resolution does not require the governor’s signature if it passes both chambers.

The proposal would repeal regulations adopted by the Louisiana State Licensing Board for Contractors that require residential building subcontractors to hold a specialty classification license to work directly for a homeowner rather than for a general contractor on projects that exceed $7,500. The licenses include pile driving, foundation work, framing, roofing and masonry/stucco. 

In Louisiana, there are 4,398 licensed residential contractors but only 131 specialty subcontractors allowed to work directly for homeowners, Cathey said. Of those, none have a pile driving or masonry/stucco licenses, 23 have a foundations license, 17 have a framing license and 91 have a roofing license, he said. 

The proposal would also repeal the labor-only subcontracting license, which is required for subcontractors who provide only manpower while working under the supervision of a general contractor. 

To obtain any of the specialty licenses, applicants must be registered with the Secretary of State, pass a business and law exam, successfully complete the trade examination for the respective specialty classification and provide proof of liability insurance and workers’ compensation insurance coverage.

Michael McDuff, executive director of the Licensing Board for Contractors, said the specialty licenses were adopted years ago at the request of the Louisiana Home Builders Association. He said the association had complained that subcontractors were unfairly competing against general contractors for jobs by skirting taxes and licensing requirements.

McDuff said the specialty licensing requirements have provided oversight and enforcement to protect both the industry and homeowners. 

“We license them and we make sure that they’re insured and that they’re registered to do business in the state of Louisiana,” McDuff said. “That is the important component of these subclassifications.”

 Repealing the regulations would also lift the requirement that subcontractors show proof of liability and workers’ compensation insurance. Rep. Edmond Jordan, D-Baton Rouge, pointed out that uninsured subcontractors who work directly for homeowners could put their workers and the homeowners at financial risk.

“I’m just wondering if there’s some unintended consequences here that we haven’t necessarily fleshed out,” Jordan said. 

Cathey presented a notice he received from the licensing board in 2019 stating that the board no longer requires contractors to list the board as a certificate holder on the contractor’s insurance policy. 

“They have no way of knowing if a contractor is insured or not, so to me, the concerns from the Licensing Board about insurance and quality of work are ill-founded based on their previous actions,” Cathey said.   

The Louisiana Home Builders Association and the Louisiana Realtors Association filed cards in support of the legislation.