Calif. Joint Operation Targets Underground Economy

July 10, 2012

A statewide joint task force in the fight against California’s underground economy has netted contractors allegedly operating illegally, resulting in 104 enforcement actions, California Insurance Commissioner Dave Jones announced.

Detectives from the California Department of Insurance (CDI), the Contractors State License Board (CSLB), Employment Development Department (EDD), and County District Attorneys’ offices partnered for a series of sweeps at suspected illegal construction sites on June 20 and 21.

Supplied with information in part from the State Compensation Insurance Fund, sweeps were conducted in 11 counties, where enforcement actions were issued for violations including failure to carry workers’ compensation insurance, under-reporting the number of workers to obtain cheaper insurance premiums and to pay less payroll withholding tax, and cash payment to hide unregulated practices. Uninsured, untaxed, unlicensed, and unregulated activity is referred to as the underground economy.

Sweeps took place in cities within Alameda, Butte, El Dorado, Kern, Los Angeles, Monterey, Orange, Riverside, San Bernardino, Santa Clara, and Yolo counties resulting in 104 enforcement actions against contractors that failed to obtain appropriate workers’ compensation insurance coverage, obtain a contractor’s license, or comply with payroll tax requirements. Some received stop orders for the workers’ compensation violations, which means they are not allowed to use employee labor until they obtained a policy for their workers and submit proof of that coverage to CSLB.

Topics California Workers' Compensation Contractors

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