Sting Operation in Livermore Nabs Workers' Comp Insurance Law Violators
CSLB and Alameda County District Attorney team up to "insure" workers are covered
SACRAMENTO — A three-day sting operation in Livermore by the Contractors State License Board's (CSLB) Statewide Investigative Fraud Team (SWIFT) aimed to identify and expose licensed and unlicensed contractors working without workers' compensation insurance. CSLB worked with the Alameda County District Attorney's Office and California Department of Insurance investigators in an effort to ensure workers' comp laws are being followed.
Investigators found sting targets through on-line advertisements, and called them to solicit bids for landscaping and other home improvement work on a Livermore home. Six came to bid on the project July 31, and four were invited back to begin work on the project on August 3 and 4. Of the four contractors caught in the sting operation, the district attorney's office expects to make three cases for workers' compensation violations.
In addition to being licensed in the trade classification for the work being performed, California Business & Professions (B&P) and Labor Codes require that all contractors with employees other than themselves carry workers' compensation coverage for each of those individuals. There is an exception for roofing contractors, who are required to have workers' comp insurance for themselves, as well.
"California consumers must realize that even if a contractor has a license, if he or she does not have the proper workers' comp insurance, the homeowner could be liable for any injury that occurs to those workers on their property," said CSLB Registrar Steve Sands.
One licensee was caught in the sting, and referred to the Alameda County District Attorney's Office for prosecution of failing to carry workers' comp insurance. One unlicensed contractor was arrested for felony use of his brother's contractors license. He also faces charges for contracting without a license, illegal advertising, and soliciting an excessive down payment. Two others non-licensees were issued Notices to Appear (NTAs) in Alameda County Superior Court in Pleasanton on September 22, 2009 at 9 a.m. Both will face charges of contracting without a license and illegal advertising, and one of them will also be charged with soliciting an excessive down payment.
B&P Code requires that all licensed contractors include their CSLB license number in any print, broadcast, or Internet ads, as well as on business cards, work vehicles, and apparel. Anyone who performs construction work for less than $500 may advertise provided that their advertisements state they are "not licensed contractors."
B&P Code also prohibits contractors from accepting down payments of more than $1,000 or 10 percent of the value of the entire project, whichever is less. There is an exception for about two dozen companies in California who carry what is called a "blanket performance and payment bond," which is a payment on file with the CSLB Registrar that ensures consumers will receive restitution if a problem occurs with the project. (Carriers of the "blanket performance and payment bond" are indicated on the Web site in the "miscellaneous information" section).
"It is very simple for the public to check whether a contractor has a license and to ensure they have workers' compensation insurance on our Web site or by calling our automated toll-free line," said Sands. "If the contractor indicates they are the sole employee, but it is a job that will require more than one person, consumers should ask the contractor how those workers will be covered for workers' comp."
CSLB urges consumers to review the following tips before hiring a contractor:
- Verify the contractor's license by checking online at www.cslb.ca.gov, or via CSLB's automated phone system at 1-800-321-CSLB (2752).
- Don't pay more than 10% down or $1,000, whichever is less.
- Don't pay in cash, and don't let the payments get ahead of the work.
- Check references, and get three bids and a written contract before your project begins.
- Contact CSLB if you have a complaint against a contractor.
The Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. CSLB licenses and regulates about 315,000 contractors and is regarded as one of the leading consumer protection agencies in the United States. In fiscal year 2007-08, CSLB helped recover $35.2 million in ordered restitution for consumers.
- Adrian Scott Bell, 27, Modesto, Concrete
- Reetpaul Singh Vander, 35, San Jose, Landscaping
- Tevisi Havea, 41, Oakland, Concrete
- Tony Nguyen (licensee), Newark, Landscaping
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