CSLB Scrutinizing Workers Comp Exemptions

CSLB Scrutinizing Workers Comp ExemptionsThe Contractors State License Board (CSLB) is turning their attention to contractors who they believe should be carrying workers compensation.

In the newsletter article below, the CSLB discusses their plan to look into whether or not a licensee who submitted a workers comp exempt form should actually be carrying a workers comp policy.

Right off the top, any licensee who has employees must and should have workers comp. It’s the law. It benefits the contractor and his employee’s and their families. If you know me, you know that I’m always on the side of the law. If, or course, it just and not abusive.

Regarding the CSLB plan… if it walks like a duck, talks like a duck, it’s a governmental agency abusing its power and authority…. Yet again!

What they’re saying is that if you hold the A-Gen Eng., C8 Concrete, C10 Electrical, C20 HVAC, C36 Plumbing, or the C46 Solar classification, you could be part of their “random” checks. I wonder why they didn’t include the B-Gen??

As with everything else the CSLB does randomly, what exactly is their process for choosing their random sample? Throw darts at a board, pull license numbers out of a hat?

The law states: “Pursuant to Section 7065, the registrar shall conduct a comprehensive investigation of no less than 3 percent of applications filed under this section to ensure that the applicants met the experience requirements of this section.” This is the go to section for a lot of what the CSLB licensing department does. They throw this thing out like it was a coup-fourre card in a Mille Borne game.CSLB Coup Forre

They must look at an app and decide there is something about it and…..BAM!! 7065 COUP FORRE! Unless of course your application is one of the critical classifications, then the minimum 3% rule turns into a mandatory 100% rule!

 

Anyway… back to the random workers comp sampling of the classifications listed above. I personally know plumbers, electricians, HVAC guys, and some B-Gen Bldg. guys who work alone. The fact that the cslb has selected those classifications to focus their attention shows they really have no clue what actually takes place outside of their doors.

A one man shop is going to get a call, letter, or visit from a CSLB enforcement rep and he’s going to have to stop everything he’s doing to prove that he doesn’t have employees. Just what every small business wants to deal with… the heavy hand of State Government. No thank you!

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Workers’ Comp Exemptions Will Get Extra Scrutiny From CSLB

CSLB will be taking a much closer look at licensees who file exemptions from having to purchase workers’ compensation (WC) insurance, particularly those working in trades likely to need a partner or employees.

At its December meeting, the Board agreed to a strategy to bring more contractors into compliance with California law on WC insurance. More than 50 percent of all licensees have filed WC exemptions with CSLB, a rate suspected to be too high considering the nature of the contracting work done.

Business and Professions Code section 7125 requires contractors to purchase a WC policy and submit proof to CSLB when an active license is issued, an inactive one reactivated, or at the time of renewal, unless the licensee does not employ anyone subject to California WC or files a certificate of self-insurance with CSLB. (All C-39 Roofing contractors, however, must carry WC insurance even if they work on their own.)

To identify contractors who may be improperly claiming a WC exemption, and encourage them to purchase WC policies for employees, CSLB’s Enforcement division will:

  • Perform an analysis and reach out to contractors registered with the state Department of Industrial Relations who bid on public works projects. CSLB staff will perform random checks of those contractors, and send letters to those claiming WC exemptions about the need to provide insurance if they employ workers.
  • Review a sampling of the overall consumer complaints that CSLB receives for contractor WC compliance.
  • Conduct random checks of licensees in classifications most likely to need employee labor, but who hold WC exemptions. Staff will look at those with C-46 SolarC-36 PlumbingC-20 Warm-Air Heating, Ventilation and Air-Conditioning, C-10 ElectricalC-8 Concrete, and “A” General Engineering licensees who have declared they have no employees.
  • Review permit activity in partnering counties to determine if contractors pulling permits for large projects have WC insurance.
  • Coordinate with other state agencies to further identify WC violators. Representatives from CSLB, state Department of Insurance, and Division of Labor Standards will discuss ways to raise WC compliance among contractors.

Contractors who falsely claim WC exemptions are taking a great risk to save a little money. WC violators not only face CSLB disciplinary action, but they expose themselves and their clients to liability if uninsured workers get hurt on the job.

End of article

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Contractors State License Board Exams

Email exchange I had with Betsy Figueira on 3/28/2014 regarding the Contractors State License Board exams.

Basically, I wanted to know how and why the CSLB is allowing applicants to take the CSLB exams when they are sending the applications to the investigation unit. The conversation went as follows:

Update at the bottom. 4/4/14

License Guru: Can you provide me with the rule, regulation, or law that gives the CSLB the authority to allow an applicant to take the exams, but still send their application to enforcement for investigation?

Ms. Figueira: Hello Phil,

California Code of Regulations (CCR) Section 825 (a) requires the qualifier to have 4 years of journey-level work experience within the last 10 years in the relevant classification.

Business and Professions Code (BPC) Section 7065, CCR Section 825 (e), and CCR Section 840 require the qualifier is to take the examination.

CCR Section 824 requires a comprehensive field audit of a minimum of 3% of the applications.

There is nothing in the law that specifically dictates the order in which the exam must be taken and the experience must be verified.  As a service to the applicant, CSLB allows the consecutive processing of the examination and the experience investigation in order to save time, as opposed to making the applicant wait until his/her experience has been verified before taking the examination, which can take months.

Passed examinations remain valid for 5 years after the exam date, as provided in BPC Section 7065 (d).  Therefore, even if an applicant’s experience is not verified under a particular application, the applicant may be able to make use of that passed exam to qualify for licensure on a subsequent application when he/she is able to sufficiently document his/her work experience.

Thanks,

Betsy Figueira
CSLB, Licensing Division Manager
916-255-3369

License Guru: Thank you for the reply.

So I understand this correctly… since the law does not “specifically” dictate the order in which the exam must be taken, a CSLB staff member has decided to allow applicants to take the exams, even though their application hasn’t been accepted and/or approved. I know the CSLB has different definitions for “accepted” and “approved” and uses either word when it best fits the situation.

What can I expect when my exam application has been accepted?

This step will outline some of the procedures you can expect when your exam application is accepted.

  • You will receive a Fingerprinting Live Scan packet
  • You will receive a Notice to Appear for Examination. You should receive your examination notice at least three weeks prior to the examination date.

The above statement on the website is misleading and does not fall in line with your statement.

I’ve talked to many applicants who are confused as to why they’re being allowed to take the exams when their application is being sent to investigation. At the very least, the CSLB is sending mixed messages.

From what I have been told, most applicants find it more stressful to take the exams not knowing if their application is going to be processed/accepted/approved etc., or not. So from my experience, you are not doing them any favors.

Then there is this page on the website. Note the last line of the third bullet point.

http://www.cslb.ca.gov/Applicants/ContractorsLicense/NoExamApplication/ApplyingForLicense.asp

Under what circumstances am I not required to take the examination?

You are not required to take the examination if the qualifying individual meets one of the following requirements:

  • You are currently a qualifier on a license in good standing in the same classification(s) for which you are applying;
  • You have been a qualifier within the past five years in the same classification(s) for which you are applying;
  • Within the last five years, you have passed both the Law and Business Examination and the trade examination in the same classification for which you are applying, and the license for which you took the examinations was not denied due to lack of work experience.

I have research the B&P Code and the CCR and can not find any rule, regulation, or law that gives the CSLB the authority to have an applicant re-take exams that he/she has passed within the prior five years because of a prior denied application. This statement on the website also differs from your statement regarding 7065.

Applicants are being put through the wringer when it comes to providing paper documentation when the law clearly states that the “registrar shall investigate, classify, and qualify applicants for contractors’ licenses by written examination.” 7065 (a)

Regarding Section 824. It does not specifically dictate the creation of a list of “critical classifications.” Therefore, those applying for one of the “critical classifications” should not be considered part of the 3% minimum. Those applicants are being required to provide additional documentation based solely on the classification they are applying for. Therefore, Section 824 does not apply.

At the very least, the CSLB should be putting out a consistent message that follows the law as written, not as interpreted by CSLB staff.

Thank you again.

End

I haven’t received a response to my reply, but it was yesterday (Friday) so I may or may not hear back from her until next week… if at all. It seems that whenever I ask for information regarding their licensing processes, they always give me Section 824, 825, 840 and 7065. None of which actually give them the authority to do what their doing if they followed the letter of the law.

The bottom line is… the Contractors State License Board Exam unit does whatever they want and they always seem to manipulate the law to fit their needs or to justify their whims.

Update: 4/4/14

Below is a portion of a reject letter that was sent in March. You will notice the last paragraph states the following:

Inline image 1

If this is true, then why are these applicants being sent to investigation? The fact that they are being sent to the exams suggests that licensing has verified the minimum experience required.

Continue reading the discussion at Contractors State License Board Exams Part 2.

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