CSLB Sting Highlights Perils of Hiring Unlicensed, Uninsured Operators
No contractor license or workers’ compensation insurance is risky businessSACRAMENTO — Nine people who bid on painting and concrete work at a West Sacramento property were surprised by a Contractors State License Board (CSLB) Statewide Investigative Fraud Team (SWIFT) undercover sting operation on August 31 and September 1, 2010. They were cited for contracting without a license and related violations.
SWIFT was assisted by the Department of Consumer Affairs Department of Investigations, the Yolo County District Attorney’s Office, Department of Industrial Relations, and West Sacramento Code Enforcement. CSLB investigators posed as volunteers at a community organization’s building, soliciting bids for exterior painting and concrete work. Those who bid more than $500 for labor and materials received either a notice to appear (NTA) in court or an administrative citation for contracting without a license, illegal advertising, and soliciting an excessive down payment. Some were cited for two or all three of those violations. Those who indicated they had workers received $1,000 citations for each employee who was not properly covered by workers’ compensation insurance.
California law requires that all construction jobs valued at $500 or more for labor and materials be performed by a state-licensed contractor. Contractors must place their license number in all forms of advertising. A license is not required to advertise and complete jobs valued at less than $500, but the advertisement must state that the individual is not a licensed contractor. It is also illegal to solicit a down payment greater than $1,000 or 10 percent, whichever is less. There is an exception for about two dozen contractors who purchase special consumer protection bonds that are noted on CSLB’s website. Contractors also must purchase workers’ compensation insurance for each of their employees. Roofing contractors must secure workers’ comp coverage for themselves as well as employees.
"All California consumers should consider the financial liabilities they might face before they hire an unlicensed, uninsured operator or a licensed contractor who does not carry the proper workers’ compensation insurance," said CSLB Registrar Steve Sands. "It only takes a few minutes online or over the phone to check whether a contractor has a license and workers’ compensation coverage." Consumers should also make sure an insurance policy covers all workers who will be involved on a job.
One of those issued an NTA is a roofing contractor with a revoked license who was entering into contracts on behalf of others, and is not registered as a Home Improvement Salesperson with CSLB, as required by law. John Michael Hope, Jr., 51, of Sacramento, had his license revoked earlier this year for violations including substandard work, misrepresenting a contractor license number, contracting on a suspended license, and filing a false workers’ compensation exemption statement.
CSLB urges consumers to follow these tips before hiring anyone to build, remodel or repair their homes, businesses or other properties:
- Be especially hesitant when approached by someone offering home improvement services door-to-door.
- Verify the contractor's license 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. There is an exception to this rule for about two dozen contractors who purchase special bonds and are noted on CSLB’s website.
- Don't pay in cash, and don't let the payments get ahead of the work.
- Get at least three bids and insist on a written contract before your project begins.
- Contact CSLB if you have a complaint against a contractor.
The arraignment date set for those with NTAs is December 1, 2010, in Yolo County Superior Court, Department 9, in Woodland. The following individuals received NTAs or citations:
|Eliseo Rafael Garcia
|42||NTA - Contracting without a license, illegal advertising||Concrete|
|Luis Ignacio Davalos
|39||NTA - Contracting without a license
CIT - $3,000 workers’ comp
|59||NTA - Contracting without a license, illegal advertising
CIT - $1,000 workers’ comp
|John Michael Hope, Jr.
|51||Unregistered home improvement salesperson, illegal advertising||Painting|
|Luz Elvia Bhullar
|46||CIT – Contracting without a license, illegal advertising||Painting|
|Mateo Richard Lopez
|36||NTA - Contracting without a license, illegal advertising, soliciting excessive down payment
CIT - $6,000 workers’ comp
|-||CIT - $5,000 workers’ comp||No Bid|
|46||NTA - Contracting without a license||Painting|
|Barry Harold Lambart||54||NTA - Contracting without a license
CIT - $1,000 workers’ comp
The Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. More information and publications about hiring contractors are available on the CSLB website or by calling 800-321-CSLB (2752). You can also sign up for CSLB e-mail alerts at www.cslb.ca.gov, and follow us on Twitter and Facebook. CSLB licenses and regulates California's more than 300,000 contractors, and is regarded as one of the leading consumer protection agencies in the United States. In fiscal year 2009-10, CSLB helped recover nearly $42 million in ordered restitution for consumers.
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