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April 19, 2001

Hearings scheduled on agriculture minimum wage

June 18, 2001

New law benefits homeowners and contracting industry

TUMWATER - Consumers will have more protections from fraudulent contractors when a new state law takes effect next month.

Among other things, the law increases contractors' bonding and insurance requirements and ensures that up to 50 percent of the bond is reserved for consumers. The law is effective July 22.

The Department of Labor & Industries, which registers contractors, said there is a growing problem with fraudulent contractors. The number of summons and complaints seeking to obtain payment from contractors' bonds or sureties increased from 126 in 1982 to more than 3,500 in 1999. The value of those summons and complaints increased from $650,000 to more than $31 million. L&I receives about 500 calls per month with complaints about contractors.

"Most consumers are happy with their contractors, but there's a small segment who cause most of the trouble," said Patrick Woods, L&I assistant director for Specialty Compliance Services. "The contractor community actively supported this important consumer legislation because it recognizes the need to provide additional protections from unprofessional contractors who give the industry a bad name."

Here are some of the things the new law does:

  • Increases specialty-contractor bonds from $4,000 to $6,000 and general-contractor bonds from $6,000 to $12,000.
  • Allows increases in bonding requirements up to $36,000 for contractors who have judgments placed on their bond or account.
  • Ensures that up to 50 percent of the bond is reserved for consumers.
  • Increases personal-injury-insurance requirements from $100,000 to $200,000.
  • Increases the penalties for false advertising from $5,000 to $10,000.
  • Requires contractors to give customers an expanded disclosure statement about consumer rights prior to starting work on a project.
  • Allows L&I to deny or suspend a contractor's registration if there are outstanding judgments.
  • Provides L&I with additional authority to collect penalties and fines.

L&I's contractor-registration web site, www.lni.wa.gov/scs/contractors, has more information about the new law, as well as a complete copy of the bill. The site also offers advice for consumers who may be hiring a contractor or remodeler. Information also is available by calling 800-647-0982 or at any of L&I's 22 regional offices throughout the state.

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