The Nebraska Contractor Registration Act: What You Should Know
Contractors across the United States must be diligent in following each state’s licensing regime and consumer protection requirements. Contractors in Nebraska are no exception. Nebraska’s Contractor Registration Act (the “Act”) requires contractors to register with the Nebraska Department of Labor in order to conduct business within the state. This article provides a brief introduction to those looking to understand who qualifies as a contractor under the Act, the information needed to register under the Act, and the fees and penalties associated with the Act.
Who Qualifies as a Contractor?
Contractors seeking to complete construction work in Nebraska must be registered with the Department of Labor’s Contractor Registration database before performing any construction work in the state. The Act defines construction as “work on real property and annexations, including new work, additions, alterations, reconstruction, installations, and repairs.” Contractors required to register in the database include individuals, firms, partnerships, limited liability companies, corporations, or other associations of people engaged in construction work. Additionally, subcontractors, employees, or independent contractors completing construction work also must register. Exemptions to the registration rule include any person performing work on their own property or any person earning less than $5,000 annually for services. All others must register under the Act.
Information Required by the Act
Under the Act, contractors must apply for a registration number. Anyone doing business under more than one name is required to obtain a registration number for each name. The information necessary for registration includes:
- The name of the contractor and their employer identification number (if an entity) or social security number (if an individual);
- The contractor’s principal place of business, and, if necessary, the address of their registered agent in Nebraska;
- The contractor’s telephone number;
- The contractor’s type of entity; and
- The contractor’s option election to collect and remit sales and use tax on building materials and fixtures.
Additionally, the contractor must provide contact information for each officer, if organized as a corporation, or each owner, if organized as another type of entity. The contractor must also provide a description of the business, including the contractor’s standard industrial classification code or the principal service and products they provide. Lastly, the contractor must provide proof of one of the following: workers’ compensation insurance coverage, a certificate demonstrating approval of self-insurance coverage, or a verified statement that the contractor is not required to hold workers’ compensation insurance. If any workers’ compensation insurance policy is canceled, either by the insurance company or the contractor, the insurance company is required to notify the Department of Labor of such cancellation. Contractors approved for self-insurance must likewise inform the Department of Labor at least ten days prior to cancelation of such insurance. A contractor that fails to maintain compliance with the insurance requirements of the Act will have their registration revoked.
Fees, Disclosures and Penalties
Contractors are required to pay an annual registration fee of $25 to maintain their registration. Registered contractors can be found on the database of contractors available on the website of the Nebraska Department of Labor. Information publicly available on the database includes the contractor’s contact information, registration number, registration expiration date, sales tax option, number of employees, and workers’ compensation status.
Any contractor that violates the registration requirement or the requirement that their information be substantially complete and accurate may receive a citation. Violations can carry penalties of up to $500 for a first citation and $5,000 for a second or subsequent citation.
Conclusion
This article is meant to provide a general overview of the Nebraska Contractor Registration Act and what it means for applicable businesses and individuals seeking to complete construction work in Nebraska. For further guidance on how to maintain compliance with the Act, please do not hesitate to contact one of the members of Koley Jessen’s Construction Industry Practice area with any questions.