California Contractors License Board Cracking Down on Those Who Skirt Workers’ Comp Regulations

The Professional Association of Specialty Contractors announced it is working with the California Contractors State License Board, calling upon trade contractors to identify builders, owners and general contractor personnel who fail to obtain workers’ compensation insurance for their employees. According to Senate Bill 1254, CSLB is authorized to issue cease and desist orders, as well as suspend the license of any licensed contractor that fails to abide by the state workers’ compensation insurance requirements.

“CALPASC is working diligently with state departments and agencies, such as the CSLB, to increase the awareness of builders, owners and general contractors about the risks of hiring illegitimate low-bid subcontractors,” said Brad Diede, CALPASC CEO. “We are concerned that some general contractors, builders and subcontractors are choosing to engage in dishonest business relationships, including not obtaining workers’ compensation insurance and underreporting employees and cash payments. Subcontractors who opt to participate in these practices submit low bids that don’t cover primary wages or workers’ compensation costs and ultimately cost the state.”

According to David Fogt, chief of the CSLB Enforcement Division, his agency will aggressively enforce the laws, and will be sending letters advising prime contractors of their responsibilities under Labor Code section 2810 and the new enforcement procedures under SB 1254. Uninsured employers will be issued a stop work order, and employees will be required to leave the project with entitlements to 10 days pay, he said. Additionally, contractors found in violation of the law may face legal action, fines and a license suspension.

The California Division of Labor Standards Enforcement recently visited 305 sites in 22 counties and found 78 to be out of compliance by not offering workers’ comp coverage, CALPASC said. Work on the sites was immediately halted until proof of coverage was provided, and employers were fined. 

CALPASC is a nonprofit trade association advocating on behalf of trade contractors and suppliers of building materials in the Golden State.

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