CSLB Continues Underground Economy

CSLB Underground EconomyThe CSLB continues underground economy by making the requirements to obtain a license more restrictive.

They like to taut their sting operations and talk about where the “illegal contractors” are coming from. But what they aren’t talking about is how they are clamping down on what they will and will not accept as experience.

I was told recently by a CSLB employee that those in power are considering restricting who can be a certifier. It was suggested that they may only accept certifier’s who are contractors and/or contractor employers. They would no longer accept clients as certifiers or business associates as certifiers.

IF they do this, they better go thru the legislature because the law states who can be a certifier. The CSLB track record since Rick Villucci gained power is to do whatever they want without getting legislative approval.

Remember the “critical classifications” as the CSLB called them? CSLB staff has been directed to no longer use that term. Why? Because the Rick Villucci regime did not have the legal authority to segregate (profile) applications based on the trade that was being applied for.

Here’s a recent press release from the Contractors State License Board…

CSLB Drives Home Message to Unlicensed Contractors in Ventura County

Nearly 70 percent of illegal contractors from outside of county during two-day Moorpark sting 

SACRAMENTO  – Unlicensed contractors won’t let a long drive dissuade them from trying to steal work from legitimate contractors. A sting operation conducted in Moorpark last week by the Contractors State License Board (CSLB) once again showed that to be true. Ten of the 14 individuals cited for illegal contracting came from outside of the area, including the outer reaches of Los Angeles County.

“Unlicensed contractors will beat a path to your door if they think there’s a big paycheck in it for them,” said CSLB Registrar Cindi Christenson. “Many times, they will turn in very low bids to get the job. But homeowners take big risks if they fall into that trap. Always remember to check CSLB’s website to see if the person you plan to hire is licensed and in good standing.”

Investigators from CSLB’s Statewide Investigative Fraud Team (SWIFT), assisted by Ventura County Sheriff’s Office deputies, held the sting at a ranch-style home near Moorpark College on April 8 and 9, 2015. Seven unlicensed contractors were caught each day and were given Notices to Appear in Ventura County Superior Court on charges of misdemeanor illegal contracting.

“The Moorpark Police Department and Ventura County Sheriff’s Office appreciate our partnership with the Contractors State License Board,” said Captain John Reilly of the Ventura County Sheriff’s Office. “Our joint efforts in this operation send a clear message that unlicensed contractors operating in Ventura County will be targeted and prosecuted.”

SWIFT investigators used tips from a variety of sources, including the Ventura County Sheriff’s Office, a nearby city building department, and a state agency, to create a list of suspected unlicensed contractors who might be interested in submitting a home improvement bid. Project bids were given to investigators for installation of a tankless water heater, installation of vinyl fencing, flooring, tree removal, and interior painting.

All suspects turned in bids that were in excess of the limit allowed by state contracting laws. Any project that is $500 or more in combined labor and material costs must be performed by a state-licensed contractor, per Business and Professions Code section 7028. The highest bid, for the vinyl fence, was for $10,000; most were in the $2,000-$5,000 range.

All 14 suspects were cited for contracting without a license, as well as an additional charge of illegal advertising (Business and Professions Code section 7027.1). State law prohibits unlicensed contractors from advertising for construction-related work valued at $500 or more, although they can advertise for jobs below that amount if the ad states that they are not licensed.

First-conviction penalties for contracting without a license include up to six months in jail and/or up to $5,000 in fines. Penalties are more severe with each successive violation.

Suspects have a court date of either June 17 or June 18, 2015, in Ventura County Superior Court, 800 South Victoria Avenue, Ventura CA 90039.

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Is the CSLB creating a new Underground Economy?

With the recent changes to the Contractors State License Board’s (CSLB) application processes, they may be inadvertently creating a new underground economy.

underground economy

Earlier this year they began asking nearly all applicants, if not all, for the A-General Engineering, B-General Building, C-10 Electrician, and C-36 Plumber classifications for additional proof of their experience. They have been requesting w-2’s, pay stubs, copies of contracts and permits, and/or tax returns.

The dilemma is when a “self-employed” applicant is required to submit these documents, they can’t. That’s because the law does not require them to have contracts if the jobs they are doing are under the $500 labor and materials limit. Nor do these jobs require permits.

 

underground economy

The CSLB has said they will not penalize an applicant if they have been doing work over the $500 limit. But what if the applicant has only done a few, several or handful of jobs over the $500 limit but still doesn’t have enough experience to qualify for the exams? His app is denied.

What is the applicant supposed to do then? He can’t stop working. So he continues work, but now he’s documenting every job with a contract. And since he was told by the CSLB that they won’t penalize him (during the application process) for submitting experience over the $500 limit, he now starts doing projects that legally require a license.

Isn’t that counter-intuitive to what the CSLB is trying to accomplish in the first place? Stop people from illegally contracting without a license?

Wouldn’t it make more sense for the exams to the “litmus” test? If the applicant doesn’t have the field experience (according to the CSLB), but can pass their exams, why wouldn’t the applicant be qualified to be licensed?

 

underground economyIt almost suggests that the CSLB feels the exams are useless or unnecessary when it comes to validating an applicant’s experience. Creating false documents is always a possibility. What assurance does the CSLB have that the documents being submitted are valid? But… what are the chances that the applicant will pass the State exams if he’s falsified his experience and doesn’t have the necessary field experience? I would think slim to none. Unless, that is, if the exams have been so dumbed down, like the DMV driving test, that anybody could pass. We’ll file that under the category of “Things that make you go… Hmmmm.”

The CSLB does have the legal right to request additional experience proof from a minimum of 3% of all applications received, but perhaps if they narrowed down the scope of who they ask the documents from, they won’t be forcing so many more people into an underground economy, or inadvertently creating more “unlicensed contractors.”

My next post will be about creating a “Handyman License” and what benefits it would have to the construction industry as a whole.

 

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