San Luis Obispo Is Latest Target Zone For New Multi-Agency Task Force in Two-Day Sweep of Underground Economy
Second Major Sweep By Contractors Board and partners in Southern-Central Coast Area
SACRAMENTO — The Contractors State License Board (CSLB), joined by representatives from several other government agencies conducted a two-day sweep in the San Luis Obispo area on Wednesday and Thursday (August 17-18). This is the second major sweep of construction sites for the Economic and Employment Enforcement (Triple E) Coalition along the Central California Coast in the past two weeks. The Coalition conducted a similar sweep last week in Santa Barbara County.
It's estimated that California loses anywhere from $60 and $140 billion a year in revenue from the huge underground economy, in which unlicensed operators avoid labor and tax laws to gain a competitive advantage over legitimate businesses and workers who follow the law. The underground economy is fueled in part by unlicensed contractors who also prey upon consumers.
The new Multi-Agency Construction Enforcement Task Force is part of the 'Triple E Coalition' that Governor Arnold Schwarzenegger unveiled last month as a crime-fighting tool. The CSLB has partnered with representatives from the Division of Labor Standards Enforcement (DLSE), Division of Occupational Safety and Health (Cal/OSHA) and the Employment Development Department (EDD) to conduct sweeps around the state.
Three partnered teams visited 28 different construction sites in the San Luis Obispo area on Wednesday and Thursday. They closed down 26 of those sites for violations. They interviewed workers, managers and owners and checked paperwork. The task force, which included members of CSLB's Statewide Investigative Fraud Team (SWIFT), was looking for unlicensed contractors, employees being paid cash under the table, improper payroll taxes being deducted, workers not being covered by workers' compensation insurance, child labor, and companies not paying overtime wages.
The Department of Industrial Relations assessed civil fines totaling $36,200 for 7 violations. The fines were levied on companies that weren't paying workers' compensation insurance, or those who were paying workers in cash and not paying payroll taxes. Additional audits at three more sites could produce even more penalties. The Division of Occupational Safety and Health assessed $169,000 in projected civil penalties for 86 violations at those same sites. The CSLB investigators issued 3 administrative citations, for contracting without a license that can carry penalties of up to six months in jail and a $500 fine for each individual as a first offence. They also issued 14 citations to licensed contractors for license maintenance issues, workers comp problems and commercial vehicle signage.
"Unlicensed activity and people who aren't working within the system hurt everyone," said CSLB Registrar Steve Sands. "It's money that doesn't make it into funding for schools and highways. It takes away jobs from legitimate business people who pay taxes and have insurance protecting workers and property owners. Workers are also hurt because they're not protected should they be injured on the job."
Contractors working on any job totaling $500 or more for labor and materials must be licensed by the CSLB. To become licensed, a contractor must pass a licensing examination, verify at least four years of journey-level experience, and carry a license bond. Consumers can verify a contractor's license status 24 hours a day using the CSLB's website at www.cslb.ca.gov or toll-free automated telephone system at (800) 321-CSLB (2752). In addition, they can order helpful publications like "What You Should Know Before You Hire a Contractor"
The Triple E Coalition is also cracking down on other industries that include: agriculture, restaurant, car wash, garment, janitorial and race tracks.
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.
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