Nabbed: biting back at California’s underground economy
| Wednesday, Mar 11 2009 09:15 PM
Last Updated Wednesday, Mar 25 2009 06:16 PM
Checking ads
If a job runs $500 or more, including materials and labor, the person or business needs a state contractors license.
A licensed contractor must include his or her license number anywhere the business promotes itself, including printed and online ads, work trucks, company hats, official paperwork and so on.
Gardening work doesn’t require a license, but tree removal and sprinkler installation, for example, do. To be sure, read up at www.cslb.ca.gov
An unlicensed person can do a small job — $499 or less — but the law requires those ads to specify the person or business is not licensed.
There is no such thing as a “handyman’s” license in the eyes of state regulators.
Anyone who does a home improvement job of $500 or more needs a state contractors license; a local business license from the city, for example, doesn’t count.
Source: California Contractors State License Board
Need work done? Check out the contractor first.
Here are some general tips from state regulators:
1. Look up the contractor’s license number online at www.cslb.ca.orgor by calling 800-321-2752.
2. Get at least three bids. Ask for references and look at past work.
3. Never pay more than 10 percent down or $1,000, whichever is less.
4. Don’t pay cash and don’t make a final payment until you’re satisfied with the job.
5. Keep all papers in a job file for the project.
Source: California Contractors State License Board
Images
John Miller, right, senior investigator with the State of California Contractors State License Board, gets ready to accept a bid from the man at left on Wednesday on University Avenue. Various agencies conducted a sting operation to crack down on unlicensed contractors.
Scott Carvel, investigator with the Bureau of Investigation Office of the District Attorney County of Kern, looks out the window from a bedroom of a home on University Avenue Wednesday morning waiting for unlicensed contractors to come into the home or yard during a sting operation put on by the State of California Contractors State License Board, the District Attorney's office and the California Department of Insurance.
You feel for him, at first.
He shows up in a work truck, paint buckets in back, and ends up hands-against-the-wall, patted down, arrested.
It’s not just this guy that’s the problem, though.
Thousands like him head to houses around the state — this one an unkempt repo not far from Bakersfield College — to do billions of dollars worth of on-the-sly contracting jobs every year.
The painter, in jeans and a denim jacket splattered by previous jobs, now sits with investigators at a card table in a side room. His hair is neatly trimmed, his manner polite.
They run a background check. Laptops shuttle information. He smiles sheepishly, seems to cooperate.
He’s just trying to make a living, you think. He’s working hard. Maybe has a family to support.
But the painter nevertheless snags jobs from companies that play by the rules.
He can undercut them with cheap bids since he doesn’t pay taxes and insurance or have to comply with safety guidelines.
Businesses like his are part of an underground economy that state officials, in a 2005 report, estimate shoved $6.5 billion in income under the table.
The painter is written up on misdemeanor business-code violations and let go with a notice to appear before a judge next month. He could get a fine, jail time or both.
It’s still before 10 a.m. A tree removal guy is in the back yard, about to make a bid.
THE STING
On Tuesday and Wednesday, more than a dozen state and local authorities ran an undercover sting in Bakersfield to nab unlicensed contractors.
Similar operations also targeted five other California cities: Walnut Creek, Castaic, Palm Springs, Tulare and Porterville.
“It’s a tradition in the spring,” said Pamela Mares, spokeswoman for the Contractors State License Board, the state agency in Sacramento that regulates the industry.
For the Bakersfield job, the board worked with the state Department of Insurance, state fraud police and the Kern County District Attorney’s office.
Full results of the crackdown will be released later this week, though 16 were cited in Bakersfield Tuesday and several more Wednesday.
Jeff Miller, senior investigator with the contractors board, posed as a homeowner, laughing and joshing Wednesday as he described jobs to potential violators.
“That’s gonna take me a month of Sundays,” he told the painter, who ended up bidding $1,400, including materials, to do the exterior.
Violators were rounded up through illegal ads on fliers, business cards, in newspapers, on craigslist and from complaints. (See related lists for potential advertising violations and hiring tips.)
The houses are donated for the day, usually by contractors.
In the makeshift booking room, investigators were gentle but firm.
They gave violators license applications. They explained why their ads and bids broke laws.
Sometimes, stings turn up sex offenders or folks wanted on outstanding criminal charges, but not this time.
The effort was a drop in the bucket, sure.
But it gives an idea of the problem’s scope.
In one day at one house in Bakersfield, thousands of dollars of illegal bids for fencing, painting, landscaping and other work was easily drummed up from unlicensed contractors.
The same scene — without the arrests — goes on every day all over the state, said Mares, the contractors board spokeswoman.
“When you hire them, you contribute to the underground economy,” she said.
