How to Become a Contractor

How to become a contractor

Independent Contractors are becoming more and more common in the United States as many companies are using their services instead of hiring regular, full-time employees. Unlike a regular employee, an independent contractor may provide specific goods or services to several different companies at once under written or verbal contract.

One of the major advantages of working as an independent contractor is that you can develop your own schedule and work as needed, receiving pay on a freelance basis.

In most cases, the term, “contractor,” refers to managers who are able to coordinate, budget and keep track of all aspects of construction projects. The term can also apply to construction laborers who are physically working at construction or clearing sites. Working as a contractor has clear advantages and disadvantages. One of the major advantages is being your own boss, which allows you the flexibility of taking or turning down particular jobs. A major disadvantage for many independent contractors is that you have to find your own work, which can be difficult when starting out.

What Exactly Does a Contractor Do?

The main responsibility of a contractor is to provide all of the labor, equipment, material, and services that are necessary to complete a construction project. The contractor is a manager, or possibly a tradesman, who is working in the service of a client. Contractors generally first assess specific project documents like a bid or a proposal before taking the project to the next step and are sometimes responsible for working very closely with architects and engineers.

Independent Contractor vs Employee

There are several key differences between working as an independent contractor and an employee. Because of health care, social security, unemployment, and other benefits, the cost involved in maintaining company employees can be a significant reason for businesses to work in tandem with independent contractors.

Back in the early 90’s, the Internal Revenue Service began targeting employers who were misclassifying their employees as independent contractors and since then the IRS has received billions of dollars in the form of social security back taxes. The IRS has since been working with the department of labor, state agencies, and the US Supreme Court in order to better classify the difference between independent contractors and employees.

The US supreme court offered the following information in order to distinguish independent contractors from employees (although they state that there isn’t a definition that completely solves every problem related to the employer-employee relationship under the Labor Standards Act).  Here are the guidelines stated on their site which may help to distinguish the difference between employee and independent contractor.

Fair Labor Standard Act Adviser 

  • The extent to which the worker’s services are an integral part of the employer’s business (examples: Does the worker play an integral role in the business by performing the primary type of work that the employer performs for his customers or clients? Does the worker perform a discrete job that is one part of the business’ overall process of production? Does the worker supervise any of the company’s employees?);
  • The permanency of the relationship (example: How long has the worker worked for the same company?);
  • The amount of the worker’s investment in facilities and equipment (examples: Is the worker reimbursed for any purchases or materials, supplies, etc.? Does the worker use his or her own tools or equipment?);
  • The nature and degree of control by the principal (examples: Who decides on what hours to be worked? Who is responsible for quality control? Does the worker work for any other company(s)? Who sets the pay rate?);
  • The worker’s opportunities for profit and loss (examples: Did the worker make any investments such as insurance or bonding? Can the worker earn a profit by performing the job more efficiently or exercising managerial skill or suffer a loss of capital investment?); and
  • The level of skill required in performing the job and the amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent enterprise (examples: Does the worker perform routine tasks requiring little training? Does the worker advertise independently via yellow pages, business cards, etc.? Does the worker have a separate business site?).

Distinctions between employees and general contractors are not always crystal-clear and the boundaries are continually evolving. For example, some general contractors may now work almost exclusively for a particular entity while other contractors might work for multiple companies in a single week.

Career Information and Requirements

While there are no set educational requirements to become a contractor, factors such as formal education, job experience, or an apprenticeship are generally preferred by clients. Many contractors actually begin their career as a construction worker and gain experience by learning particular job skills like plumbing, masonry, framing, carpentry, and general construction site know how.

Becoming an independent contractor requires a vast array of skills at the worker’s fingertips in order to succeed in the construction and renovation world. Skills such as managing budgets, core mathematics, contract interpreting, and analytical skills are going to be essential to any contractor’s success in the field.

How to Become a Licensed Contractor

Many potential contractors might consider going the formal education route and get a Bachelor’s Degree in something like Construction Science, Construction Engineering, or Building Science. While obtaining a bachelor’s degree isn’t essential to a contractor’s success, it may be helpful for getting contracting jobs or eventually moving up into management. On-the-job training or an apprenticeship is also another popular way that contractors get their feet on the ground in the construction world.

Many certification and licensure programs are also available to contractors ranging from Certified Construction Manager (CCM) to Associate Constructor (AC). There are many ways in which you can qualify for a CCM certificate.

In order to become a Certified Construction Manager, the following prerequisites must be met:

  1. 48 months of experience as a CM in the qualifying areas as defined by the qualifications matrix
  2. ONE of the following:
    1. An undergraduate or graduate qualifying degree (4 Year BA or BS level)
    2. 2 Year undergrad qualifying degree (AA or AS level) and a minimum of 4 years of experience in general construction/design)
    3. No degree is required if you have 8 or more years of experience in general design/construction (this experience is in addition to the 48 month CM requirement)

Degree Requirements

CCM accepts all degrees granted by accredited Universities and Colleges which are recognized by CHEA and the US Department of Education. If you want to see if a particular school is accredited check out the Counsel for Higher Education Accreditation Website.

Qualifying Degrees

CCM accepts the following accredited degrees:

  • Construction Management
  • Construction Engineering Technology
  • Construction Science
  • Chemical Engineering
  • Civil Engineering
  • Electrical Engineering
  • Industrial Engineering
  • Mechanical Engineering
  • Architectural Engineering
  • Architecture

For more information and other qualifying requirements, visit the CMAA Website

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