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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