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• 09/09/2005

CSLB Press Release - 09/09/2005

Multi-Agency Task Force Takes Aim At Underground Economy In San Bernardino County

Contractors Board and partners crack down on unlicensed contractors and other cheaters

SACRAMENTO — San Bernardino County is the latest target zone for The Economic and Employment Enforcement Coalition (EEEC) that is sweeping the California for illegal underground economy activity. The Contractors State License Board (CSLB) was joined by partners from several other government agencies in conducting a two-day sweep for illegal underground economy activity.

It's estimated that California looses anywhere from $60 and $140 billion a year in revenue from the huge underground economy. The sweep of San Bernardino County construction sites targeted construction businesses that avoid labor, tax and licensing laws to gain competitive advantage over the almost 300,000 legitimate contractors who follow the law. The underground economy is fueled in part by unlicensed contractors who also prey upon consumers.

Partner agencies comprising the EEEC are the Contractors State License Board (CSLB), the Department of Industrial Relations' Division of Occupational Safety and Health (Cal/OSHA), Division of Labor Standards Enforcement (DLSE) and the Employment Development Department (EDD). In this latest sweep, three partnered teams visited three-dozen different construction sites in San Bernardino County interviewing workers, managers, owners, and safety officers and checking the businesses' paperwork.

"We're all affected by contractors who break the law. Not only do they take business away from legitimate business people, they're putting consumers at risk," said CSLB Registrar Steve Sands."If a consumer has a problem, there's very little that can be done to help them. Plus, if a worker gets hurt while on their property, the consumer could be responsible for paying the medical bills."

The two-day sweep resulted in the following:

• Cal/OSHA assessed $227,000 in projected civil penalties for 85 violations and potential dangers to workers' safety. Examples of problems are roofers working without proper fall protection such as safety harnesses, improperly constructed scaffolding, lack of protective guardrails and un-reinforced trenches.
• The DLSE issued 18 citations, with a total assessment of $73,500. The citations were levied on companies that had no workers' compensation insurance or wage and hour violations such as cash pay, child labor and overtime.
• The CSLB's Statewide Investigative Fraud Team (SWIFT) ran license checks on 71 different contractors. 63 of those licenses were cleared. Four citations were issued, totaling $1,500 in assessments. A number of warnings were given for other minor infractions.

Sweeps in San Luis Obispo and Santa Barbara Counties last month netted about 170 violations and almost $315,000 in potential fines. The real success of these ongoing operations will be with the impact they have on bringing individuals and employers into the honest business world. Other Task Force teams are conducting similar industry sweeps in agriculture, restaurant, car wash, garment manufacturing, janitorial and racetrack businesses.

The CSLB, which operates under the umbrella of the California Department of Consumer Affairs, licenses 292,000 contractors in California and investigates 20,000 complaints against licensed and unlicensed contractors every year.