Jones Announces Joint Effort to Fight California’s ‘Underground Economy’

December 29, 2011

The California Department of Insurance (CDI) is joining with the Department of Industrial Relations (DIR) and other agencies to fight labor law and insurance-related violations in an “underground economy.”

The collaboration was announced on Thursday by Insurance Commissioner Dave Jones.

As a result, the newly created Labor Enforcement Task Force (LETF), which will be headed by DIR, will launch on Jan. 1, 2012 and will be a collaborative effort along with the California Attorney General, Employment Development Department, Contractor’s State Licensing Board, Board of Equalization, the Bureau of Automotive Repair and local district attorneys.

CDI’s focus will be on “unscrupulous employers who under report payroll or misclassify employees in order to obtain a lower rate for workers’ compensation coverage,” according to a statement from Jones’ office.

Such premium fraud gives business owners, “operating illegally in the underground economy,” an unfair advantage over law abiding employers, according to the statement.

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