California Takes Aim at Illegal Contracting

Eric Herman Headshot

Eric HermanI’d like to congratulate California’s State Assembly for its recent measures targeting the practice of “black market” contractors, specifically those skirting worker’s compensation insurance. 

The move comes in the form of two new laws: AB 397 requires contractors claiming workers’ compensation exemptions to recertify their status or supply proof of insurance whenever they renew their licenses. AB 878 requires insurers to report client companies underreporting salaries to the Contractors State License Board. Both laws were written and sponsored by Assembly members Bill Monning (D-Santa Cruz) and Bill Berryhill (R-Stockton). 

As a native Californian and follower of state politics, it’s refreshing to see our representatives do something positive for small businesses struggling to compete in today’s unstable marketplace. It’s no secret that many pundits and voters alike have been deeply critical of what some characterize as California’s draconian regulatory measures, particularly where small businesses are concerned. 

In this case, however, the folks in Sacramento got it right. Illegal contracting practices have long been a significant problem both for consumers who have been damaged by black market contractors and law-abiding contractors who have struggled to compete against those who cut corners by not properly insuring workers.

The new laws come at a time when the California’s Contractor State License Board is increasing enforcement of contracting laws, including sting operations targeting unlicensed contractors. Just last month the CSLB’s Statewide Investigative Fraud Team (SWIFT) arrested eight illegal contractors in an operation in my former hometown of Murrieta, an effort conducted in conjunction with local police and the Riverside County District Attorney’s office. Similar operations netted 113 violators in eight other cities, who are now facing a host of citations for illegal contracting practices. 

As for how all of this applies to the pool and spa industry, let’s face it, for years now it’s been common knowledge that illegal contracting practices have been a problem in various markets all over the country, and in recent years the recession has only exacerbated the problem. Contractors have rightly become frustrated by the lack of enforcement and the overall destructive nature of illegal practices. 

My question is this. Do you think targeting workers compensation abuses will be an effective measure in evening the playing field? I’d love to hear your comments about this and other measures that you believe government, and the private sector, should take to protect those who play by the rules.  

Content Library
Dig through our best stories from the magazine, all sorted by category for easy surfing.
Read More
Content Library
Buyer's Guide
Find manufacturers and suppliers in the most extensive searchable database in the industry.
Learn More
Buyer's Guide