Handyman Licenses in Hawaii – Everything you Need to Know

Before you offer professional handyman services in Hawaii, it’s smart to know what you can legally do. This will keep you out of legal trouble, allowing you to earn money confidently.

I’ve pored over pages of difficult-to-understand legal jargon, spoken to state inspectors, and compiled the most critical information. Here’s what I’ve found.

Do you need a license to offer handyman services in Hawaii?

No. If your work remains under $1,500 per project (inclusive of materials and labor), a license isn’t required. If you aim to take on jobs over that threshold, a General Contractor’s license is mandated.

While a handyman license isn’t expected of contractors working within the $1.5K limit, a business registration is. All businesses in the state must register with Hawaii’s Department of Commerce and Consumer Affairs.

An encouraging note to Hawaii handymen (and those aspiring to be one!): a bill (HB 846) was introduced in January of this year to increase project caps from $1.5K to $2.5K. It’s pending approval, but all signs look positive for it passing. Check it out here.

Limitations for Unlicensed Handymen

Light plumbing and electrical work is often requested of handymen. While I was unable to locate state law clarifying the grey areas surrounding these two industries, I did find the transcript of an interview with an attorney representing the Department of Commerce and Consumer Affairs Regulated Industry Complaints Office (RICO).

The discussion answers these questions and so much more, and is worth viewing. Importantly, it clarifies that Hawaii offers virtually no latitude to contractors unlicensed in electrical and plumbing. Even tasks of a simple nature, that don’t require rewiring or moving pipes (changing a sink faucet or light fixture), are off-limits.

Even homeowners are banned from performing these exercises, which is in contrast to many states that enable these tasks for those working on their own properties. Drain clearing is the only exception I could find–that function is available to both handymen and homeowners.

As far as additional limitations, it’s essential to note that projects that require a building permit (think: structural work and demolition) are also inaccessible to handymen. Contractors need their General Contracting (GC) license to pull a permit.

While these are the most obvious restrictions, it’s advisable to confirm local regulations with the Department of Planning and Permitting in the area where you plan to work before embarking on your new venture.

Advertising Restrictions

Hawaii is one of the few states I’ve come across that has its guidelines readily available. In fact, there’s a document of statutes designed specifically for contractors, with Section 9.2 devoted to advertising.

Three critical takeaways are:

1. Handymen may only use the word “contractor” in their advertising if they have their GC license.
2. GCs must include their license number on all advertising.
3. Publishers and producers of advertising need to see proof of license prior to delivering marketing services/products.

In essence, handymen without their GC license may advertise as long as they don’t use the term “contractor” in their marketing, and GCs must include their license number in their advertising. The upside of displaying credentials? It helps establish credibility with prospective customers.

Insurance Requirements

Bodily Injury and Property Damage Liability insurance is required of all contractors, including handymen. To work legally, handymen need a certificate of insurance, demonstrating $100K coverage per person and $300K per occurrence for bodily injury, and $50K coverage per occurrence for property damage.

For handymen with employees, Worker’s Compensation is also needed. In fact, insurance carriers are mandated to inform Hawaii’s Board of the Department of Commerce and Consumer Affairs if Worker’s Comp is withdrawn, cancelled, or terminated by the handyman.

Insurance is low-cost if you get it here.

Penalties for Contracting Illegally in Hawaii

Hawaii is serious about limiting illegal contracting in its state; the monetary sanctions may be the highest I’ve come across anywhere.

Perhaps due to its appealing, tropical environment, Hawaii may draw contractors of a more transient nature–there to enjoy the climate for a while, with no intention to commit long-term. To discourage fly-by-night workers, the state levies harsh penalties: $2.5K in fines for first offenses, increasing to $3.5K for second violations. Read about it here.

Be smart—keep your projects under $1.5K if you don’t have your GC license, and stay clear of plumbing, electrical, and other specialities without proper accreditation. The penalties aren’t worth it.

How do I register my business? Anything else to work legally?

Business registration is handled by the state’s Department of Commerce and Consumer Affairs. Applicants are guided through the online process, which begins by creating a login and password for a myHawaii account.

While not required, many businesses opt to apply for a trade name. This allows for the use of a catchy moniker in place of one’s legal name (i.e., Henry’s Handyman Services rather than just Henry Smith). The application for a trade name takes place at the same site as business registration.

Finally, you’ll need to obtain an Employee Identification Number (EIN) from the IRS if you have employees. Information on an EIN can be found here, and applying happens on the IRS’s website. If you plan to work alone, this step isn’t required.

Finally, all businesses in Hawaii need to be aware of their tax obligation. Handymen will likely need to include business income when filing their personal income tax returns. This is one step that can’t be skipped…there’s no way around paying taxes!

If I’d like to get my General Contractor’s license, what are the steps?

If you’re keen to take on larger projects, you’ll need to take several steps. While lengthy, they’re laid out clearly on Hawaii’s Commerce and Consumer Affairs website. Note that the application process happens in stages–once Stage One is approved, candidates move on to Stage Two.

In summary, this is what you’ll need to do in Stage One:

1. Complete Experience Certificates, demonstrating four years of supervisory experience.
2. Complete Chronological History of Projects, highlighting four years of supervisory experience.
3. Provide a financial statement reflecting the past year, along with an independent accountant’s report.
4. Provide a copy of your credit report, generated within the past six months, covering the last five years.
5. Submit Tax Clearance Certificate from HI State Tax Clearance, stamped within the past six months.
6. Submit Trade Name Registration, stamped by Business Registration Division, if electing to use a trade name ($50 fee).
7. Include the application fee of $50.

Stage Two, once Stage One is approved:

1. The candidate receives a registration form for the required exam.
2. Mail the registration form and exam fees (approximately $150) to the Prometric testing company.

In addition to these steps, applicants will need to submit a Responsible Managing Employee letter (RME) when they register their business (see: “How do I register my Business” above). A final note to applicants: GCs must maintain a “place of business,” a legal address to receive mail (P.O. Boxes don’t qualify). This address must be displayed on the contractor’s GC license.

In addition to application, trade name, and testing fees, contractors will need to pay a licensing fee, totaling $338 as of this writing.

Conclusion

There are countless business opportunities for handymen in Hawaii. Pending legislation will make it an even more attractive state to work when the $2,500 allowance makes its way through the regulatory process.

As long as projects don’t exceed the parameters the state has laid out, a legion of handyman jobs are available without a license.

And for handymen who don’t want their aspirations capped, high-yield work is available once they go through the exercise of obtaining a General Contractor’s license.

Do you offer handyman services in Hawaii?

If so, I’d love to hear about your experience. Please leave a comment below to share any insights I may have missed.