Two California bills intended to help curb illegal contracting were signed into law by the state’s governor last month.
The laws, written by Assembly members Bill Monning (D-Santa Cruz) and Bill Berryhill (R-Stockton), are meant to use current resources to better monitor contractors and catch those illegally operating without workers’ compensation insurance.
AB 397 requires that, in order to claim an exemption from workers’ compensation insurance, contractors must recertify their status, under penalty of perjury, each time they renew their licenses or supply proof of insurance.
AB 878 states that workers’ compensation insurers must notify the Contractors State License Board when they find a client to have underreported salaries or otherwise committed fraud to reduce or eliminate workers’ compensation liability.
Contractors have long believed it is too easy for companies to operate illegally. “This [new legislation] allows us to close loopholes,” said Mike Geremia, chairman of industry lobbying organization SPEC, and president of Sacramento, Calif.-based Geremia Pools. “If we keep getting a number of bills in place to plug some of these loopholes, we’ll continue to make it harder and harder for these guys to cheat.”
SPEC officials believe their work with the Construction Enforcement Coalition, a group of construction-related organizations, has made agencies more sensitive to illegal contracting issues, prompting them to diligently enforce the new laws.