Contractor coverage and compliance, built for Texas.

Texas is unusual on two fronts: no statewide general contractor license, and largely optional workers comp. Here is a plain-language overview, with the official sources to confirm it.

Who needs a license in Texas

Texas does not license general contractors at the state level; general contractor licensing or permitting is handled by the local municipality. Specific trades are state-licensed: electricians and electrical contractors through the Texas Department of Licensing and Regulation (TDLR), and plumbers through the Texas State Board of Plumbing Examiners. TDLR requires electrical contractors to carry minimum business liability insurance. Check the local jurisdiction for general contracting.

Bonds in Texas

Because there is no statewide general contractor license, there is no statewide contractor license bond. Any contractor or license bond is set by the local jurisdiction. Confirm requirements with the city or county where you work.

Workers compensation in Texas

Texas is the notable exception: workers comp is generally voluntary for private employers, and Texas is the only state that lets most private employers choose whether to carry it. A confirmed exception: a private employer that enters a building or construction contract with a governmental entity must provide workers comp for employees on that project. Non-subscribing employers must file an annual notice with the Division of Workers' Compensation, post notices, and tell employees in writing that they are not covered.

Owner and officer exemptions

Because coverage is largely optional, owners and officers can generally exclude themselves, and employers can decline coverage entirely as a non-subscriber. On a government construction contract, the coverage requirement applies and each person on the project must be covered. Verify with the Division of Workers' Compensation.

Independent contractors and subcontractors

For workers comp, Texas applies a common-law direction-and-control test rather than an ABC test. On a construction project, persons providing labor or materials may be deemed covered unless a valid joint agreement (DWC Form 83) affirming independent-contractor status is filed with the carrier within the required window.

Public works

Texas Government Code Chapter 2253 governs bonds on public works: a performance bond is generally required when the contract exceeds $100,000, and a payment bond when the contract exceeds $25,000. Confirm the current thresholds and any local requirements.