California Ends Statewide Enforcement Sweep of Construction Firms

Officials with California's Division of Labor Standards Enforcement (Labor Commissioner's Office) issued 115 citations totaling $477,966 in fines to construction firms across the state for various labor law violations in a recent two-day enforcement activity that concluded on October 16.

"Our goal is to protect employees who can be taken advantage of by unscrupulous employers and create a more competitive environment for contractors who do comply with the laws," said Angela Bradstreet, California labor commissioner. "When we encounter businesses operating outside the law, we notify the local District Attorneys of any businesses with possible criminal violations, and the Contractor’s State License Board is notified of unlicensed contractors."

Thirty-three teams of investigators conducted the inspections of 369 companies at residential and commercial construction sites across the state. Officials subsequently made referrals to the District Attorneys in San Francisco, Yolo, and Los Angeles counties.

The inspections revealed that nearly one out of every four employers investigated failed to obtain workers' compensation insurance. Contractors and their subcontractors must have workers' compensation insurance when hiring employees. An exception does exist for work being done exclusively by parents, siblings, or children of the contractor.

"We found that many employers incorrectly designated their employees as independent contractors," Bradstreet said. "Contractors and sub-contractors are not exempt from California labor law. They must hold active workers' compensation insurance policies if they have employees."

Additional violations encountered included the failure to obtain a California contractor's license as well as businesses that paid their employees but did not provide itemized deduction statements.

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