Washington Amends Construction Contractor Bond Requirements

By: Jamison McCune

Earlier this year, Governor and former presidential candidate Jay Inslee signed Senate Bill 5795 into law. Senate Bill 5795 is substantial to contractors and sureties who do business in Washington for two reasons.

First, the bill gives the Washington Department of Labor & Industries greater power to increase the bonding requirement for contractors who are accused of performing shoddy work. In order to be licensed in the state of Washington, a contractor must file a $12,000 bond for general contractors or a $6,000 bond for subcontractors. Senate Bill 5795 allows the department to increase these amounts by up to three times if a contractor, or any of its owners or officers, have a prior judgment against them involving a single-family home. Under prior law, the department could only increase the bonding requirement if there were three judgments against a contractor and the judgments involved two different structures. Senate Bill 5795 adopts a “one and done” approach and will likely make it harder for contractors to get licensed if there is one adverse judgment against them.

Second, and perhaps more importantly, the bill directs the Department of Labor & Industries to consider whether current bond amounts are sufficient to protect consumers, workers, and suppliers. The department must also consider whether additional licensing criteria for contractors would provide additional protection for consumers. The department must submit a report on these issues to the legislature by June 2020, which suggests additional changes are on the horizon for contractors and their sureties.

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