Computer links Extend the Reach of Contractor’s Law

Hope you enjoy the celebration of our ‘labors’ to begin this September. I also will take time off to honor this Labor Day, and return the following week. Contractors often have a business name in mind but can run afoul of the law if someone else is already using that name. How can you check your choice? The increasing use of computers linking government agencies gives the ‘long arm of the law’ much longer reach when they look for problems…

Q: I know the CSLB goes after unlicensed contractors. I read about a sting operation in Yolo County and think I also read something in one of your columns. What I would like to know: are they going after “licensed” contractors who have employees but file a Worker’s Comp Exemption?

A: According to a new report highlighted in the Sacramento Business Journal, Worker’s Compensation fraud is “rampant” in professions where workers face a high degree of on-the-job injuries. Construction trades were one of the areas highlighted as underreporting or misclassifying workers.

Your question prompted me to contact the CSLB to see what activities they are pursuing to catch those that underreport Worker’s Compensation, payroll, etc.

The Contractors Board stated they conduct construction sweeps in addition to stings. They’re often done with partners from other government agencies like the Department of Insurance, EDD, US Dept. of Labor and State Industrial Relations.

During these sweeps investigators go over a construction site and carefully examine payroll records and other paperwork for inconsistencies. Each government agency will cite violators in their area of expertise (Payroll, safety, workers comp, licensing, insurance etc.)

And with computers linking State and Federal agencies, finding discrepancies like underreporting or exemption violations becomes much more likely.

According to a Board spokesperson, “It is also not unusual for investigators who are out in the field to conduct independent sweeps. If they find violations, they will either issue a citation or contact the other appropriate agency to step in”.

If you have a lead on someone who is abusing the system, contact the CSLB.

Q: I am interested in determining if a name has been licensed in California. Would you be able to help? I will need to get a license in my name with this ‘doing business as’, ‘dba’.

A: The CSLB does not restrict the number of companies that can use the same name in California — unless applying as a corporation. For example, there can be a dozen “xyz building” sole owner licenses but only one active “xyz building Inc. Fictitious business names – or ‘dba'” — are regulated at the local city or county level. Check with your local government agency to see if the name is taken. There may be other restrictions on the use of a business name, so please contact my office to further discuss this issue.