Joint Labor Enforcement Task Force Targets Underground Economy

The California Contractors State License Board (“CSLB”) announced today that a joint inter-agency task force, the Labor Enforcement Task Force (“LETF”), has been formed to crack down on unlicensed and improperly licensed contractors.

Comprised of investigators from the CSLB, California Department of Industrial Relations (“DIR”), California Employment Development Department (“EDD”) and California State Board of Equalization (“BoE”), who are working in collaboration with the California Insurance Commissioner and the California Attorney General’s Office, the task force targets the underground economy of unlicensed and improperly licensed contractors who compete with and often take jobs away from properly licensed contractors due to their lower overhead and ability to underbid jobs.

According to the CSLB, the task force has conducted 16 enforcement operations since it was launched on January 1, 2012 which have resulted in dozens of citations and thousands of dollars in fines.  “Contractors need to understand that they can’t cheat to compete,” stated CSLB Registar Steve Sands.  “By combining our resources and sharing information like never before, we will target and find the worst offenders, licensed or not.”

The LETF is the latest effort by the CSLB tackle what it has called the “underground economy” of unlicensed and improperly licensed contractors operating throughout the state.  As I reported earlier, legislation which went into effect on January 1, 2012 added the BoE to the list of state agencies, which includes the California Franchise Tax Board (“FTB”), EDD, and DIR, in which the CSLB may refuse to issue, reinstate, reactivate or renew a license or may suspend a license based on a licensee’s failure to pay taxes owed to the FTB, payroll taxes payable to the EDD, sales and use taxes collected by the BoE, or to carry workers compensation insurance required by the DIR.

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