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Sacramento Lawmakers Give Relief To Cheating Contractors

Sacramento Lawmakers Give Relief To Cheating Contractors

Posted August 19th, 2013 by Joe Messina Joe Messina in World View

Imagine working a job week in and week out and being paid 30% less than you earned. Your boss, after promising to make up the difference, suddenly shuts the doors and claims bankruptcy. 34 union workers who built a new county hospital in Contra Costa County suffered egregious underpayment of wages and benefits. Despite the guarantee of prevailing wages under the law, despite being union members in a strong union county, it was a non-union group that went to bat for them.

Any contractor who does public, prevailing wage projects can tell of bidding jobs at or near cost and still being underbid. How can this be if everyone is agreeing to pay workers the same amount? Honest contractors know that they can slash their margins and still lose work to cheaters. Workers and honest business owners need someone to police the industry because the state is limited.

By misclassifying workers, overusing apprentices at far lower wages than journeymen, by shaving overtime or paying cash, the cheating contractor can steal from his competitors, workers, taxpayers and even insurance companies. Reduced payroll means reduced payroll taxes and insurance costs. One of those Contra Costa workers received just $28,000 of over $41,000 earned; quite a savings, to the contractor.

A company known as The California Construction Compliance Groups (CCCG) was formed to provide relief for workers, honest business owners and taxpayers and supports the Construction Enforcement Coalition, an umbrella organization under which both union and non-union contractor organizations interface with law enforcement to discuss best practices. Sadly, some of those members have engaged in circular fire, shooting at people who are on their side.

SB 776 is sponsored by the State Building and Construction Trades Council and authored by the Senate Democrat Majority Leader, Ellen Corbett (D-San Leandro). It proposes to defund CCCG for the crime of lacking an affiliation with collectively bargained, ie union workers. The Democrat majority rammed this bill through on behalf of unions seeking to eliminate the only non-union organization performing these audits on behalf of workers, contractors and taxpayers.

Cheated workers can file claims with the state, but enforcement officials have just 180 days from the completion of a project to issue a claim for damages. If the clock runs out, the only remedy for workers is lawsuits and that could take years. It is critical that cheating is caught early in a project and prosecuted fully. Sadly, due to limited resources, only a fraction of projects are ever audited.

It should not be like this. The problems with the underground economy are pervasive and we need more audits not fewer. The battle lines should have honest contractors united against cheating contractors without regard to union status. Hopefully, Governor Brown shares that goal and will send SB 776 back to the Assembly.

Information on how to ask Governor Brown to veto this wrong-headed legislation can be found on the CCCG website.


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