Key takeaways
- A5574, the proposed Subcontractor Licensing Enforcement Act, was introduced October 5, 2026 and is a proposal, not law (bill text).
- It would bar a subcontractor from regulated trade work unless the sub holds its own NJ license, and say a prime contractor's license never covers a sub.
- A contractor who knowingly hires or retains an unlicensed sub would be jointly and severally liable, with fines of up to $5,000, $10,000 and $25,000.
- Nothing changes for you today. The practical step is to collect license and insurance documents from every trade sub now.
This guide is general information, not legal advice. Last updated October 26, 2026. Bills change as they move, so check the bill page before relying on any detail.
What A5574 Is
The bill's synopsis reads: “Establishes ‘Subcontractor Licensing Enforcement Act.’” It was introduced on October 5, 2026 in the 222nd Legislature, and Assemblywoman Dawn Fantasia of District 24 is listed as the sponsor. A trade association update from the Restoration Industry Association also flags it, noting that it "remains a proposal".
The bill's own statement says it regulates the licensing and work of subcontractors for HVACR contracting, electrical contracting, plumbing, fire and burglar alarm installation, and sheet metal work, or any activity requiring licensure or certification under State law or the rules of the boards for these trades. The statement also says it adds penalties, recordkeeping requirements for contractors, and an amendment to the Public Works Contractor Registration Act.
What the Bill Would Require
Section 4 of the introduced text sets the core rule. "No subcontractor shall perform, offer to perform, advertise, or engage in any regulated trade work unless the subcontractor holds the appropriate New Jersey license required for that trade." Two companion rules follow: a contractor's license "shall not, under any circumstance, authorize a subcontractor to perform regulated trade work under the contractor’s license," and a contractor may not hire or direct a subcontractor for specific regulated trade work unless that sub is independently licensed for the trade.
| Provision | What the introduced text says |
|---|---|
| Sub's license | A sub must hold the license required for the trade before performing, offering, or advertising regulated trade work. |
| Prime's license | A contractor's license cannot authorize a sub to work under it. |
| Proof of license | Each sub must give proof to the contractor before work starts, to the permitting authority when permits are filed, and to any State or local enforcement agency on request. |
| Permits | Permit applications must name the sub and license number and include proof of the physical license. No permit issues unless the named sub holds the required license. |
| Records | Contractors must keep copies of licenses, contracts and permit documentation for three years. |
| Knowing hire | A contractor who knowingly hires or retains an unlicensed sub is jointly and severally liable for the sub's violation. |
Source: A5574 introduced text, sections 3 through 7.
Which Trades Are Covered
The bill defines "regulated trade work" as work in HVACR contracting, electrical contracting, plumbing, fire and burglar alarm installation, sheet metal work, or any activity requiring licensure or certification under Title 45 of the Revised Statutes or the rules of the boards for these trades. These are trades the State already licenses. The NJ HVACR board, for example, says it licenses and regulates HVACR contractors and requires them to be licensed.
The text we reviewed does not name general contractors, roofers, painters, masons or other home improvement trades. If you hire those subs, the bill as introduced would not add a new license requirement for them. Home improvement contractors still register separately, as covered in our NJ HIC registration guide.
Penalties and Liability
Section 6 says a violation would be professional misconduct and grounds for discipline by the licensing board. The listed penalties include fines of up to $5,000 for a first offense, up to $10,000 for a second offense, and up to $25,000 for each subsequent offense, suspension or revocation of the contractor's or subcontractor's license or registration, and stop-work orders from a State or local agency. Each day of continued violation would count as a separate offense.
The liability rule is the part prime contractors should read twice. Section 7 says a contractor who knowingly hires or retains an unlicensed subcontractor for regulated trade work would be jointly and severally liable for any violation committed by that sub. The word "knowingly" matters, and the bill text we reviewed does not define it further. Ask counsel how that term would be read if the bill moves.
Public works
The bill also amends the Public Works Contractor Registration Act. Under the proposed language, a sub may not perform regulated trade work on public work unless licensed for the trade and listed on the required bidding and application documents, and a public body or construction manager would have to verify sub licensing before approving a subcontract (A5574 text).
How It Differs From Rules That Apply Today
A5574 would add a licensing check. It would not replace the rules that already shape who you can hire.
- Worker classification. New Jersey's ABC test rules decide whether someone is an employee or independent contractor. A trade license does not settle that question. See NJ independent contractor rules.
- Insurance. If a sub has no workers' compensation and its employee is hurt, the contractor who placed the work can become liable under N.J.S.A. 34:15-79 (NJ Workers’ Compensation Law). Our guide to subcontractor agreements and certificates of insurance covers what a certificate proves.
- Stop-work orders. NJDOL already issues them for misclassification and unpaid coverage. See NJDOL stop-work orders.
- General contractor licensing. A separate pair of bills, S2148 and A3899, would license general contractors. Per the Legislature's page, S2148 was referred to the Senate Commerce Committee on January 13, 2026 and transferred to the Senate Budget and Appropriations Committee on June 15, 2026 (S2148 history). See our general contractor license guide.
What to Do Now
Nothing in A5574 is required today. Several habits would help under current law and line up with what the bill proposes:
-
Get the license and the certificate before work starts
For electrical, plumbing and HVACR subs, ask for a copy of the state license and a certificate of insurance. File both with the signed subcontract.
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Keep records in one place
The bill would require three years of retained records. Keeping contracts, licenses and permit paperwork together costs little and helps in any dispute.
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Check who pulls the permit
If permits are filed under your license for work a sub performs, ask counsel or the local permitting office whether that practice is allowed today.
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Review your coverage
Confirm that your general liability and workers' comp match the work you sub out. CanDo Insurance can review the insurance section of a subcontract and quote NJ contractors across 20+ carriers.
Hiring Trade Subs? Check Your Coverage First
CanDo Insurance can review how your GL and workers' comp respond when a sub is involved, and quote across 20+ carriers.
Frequently Asked Questions
What is NJ A5574?
A5574 is a bill introduced in the New Jersey Assembly on October 5, 2026 that would establish the Subcontractor Licensing Enforcement Act. Its sponsor is Assemblywoman Dawn Fantasia. As of the introduced version we reviewed, it is a proposal, not law.
Is A5574 law yet?
No. The text we reviewed is the introduced version, and the copy we read does not state a committee referral. We did not find any vote. Nothing in it applies to your work today. Check the NJ Legislature's bill search for current status.
Which trades would A5574 cover?
The bill defines regulated trade work as HVACR contracting, electrical contracting, plumbing, fire and burglar alarm installation, sheet metal work, or any activity requiring licensure or certification under Title 45 of the Revised Statutes or the rules of the boards for those trades. It does not name general contractors or home improvement trades such as roofing or painting.
What would happen to a contractor who hires an unlicensed sub?
Under section 7 of the introduced text, a contractor who knowingly hires or retains an unlicensed subcontractor for regulated trade work would be jointly and severally liable for any violation the subcontractor commits. Fines would be up to $5,000 for a first offense, up to $10,000 for a second, and up to $25,000 for each later offense, with possible license suspension or revocation and stop-work orders.
Does A5574 change what NJ requires for home improvement contractors today?
No. Home improvement registration, the ABC test and workers' compensation rules are separate. A5574 would add a sub-licensing layer for named trades. It does not repeal or replace those rules.
What should a contractor do now?
Nothing in A5574 is required yet. A sensible step is to ask each trade sub for a copy of its license and certificate of insurance, and keep them with the contract. That is good practice today and would line up with what the bill proposes. This is general information, not legal advice.
Last updated October 26, 2026. Sources: NJ Legislature, A5574 introduced text • NJ Legislature, S2148 bill page • Restoration Industry Association, Advocate Update 10.13.26 • NJ State Board of HVACR Contractors • NJ Workers’ Compensation Law. General information, not legal advice. We do not recommend any particular position on this bill.