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TheStreet Open House

Enforcement Agencies Find Millions Of Dollars In Construction Underground

"The efforts and results of the CEP and JESF demonstrate the value of state agencies working together to fight against the underground economy. We are encouraged by these programs, as well as the Labor Enforcement Task Force (LETF) that the Department of Industrial Relations began earlier this year," said Diede. "These programs are making inroads into the non-compliance problem, which is causing havoc in the construction industry; but, we need to see more ongoing efforts like these if we are truly going to level the playing field for California's businesses."

California isn't alone in recognizing the value of coordinated and concentrated efforts to break down the barriers for efficient and effective identification and elimination of cheating activities. Other states, such as Florida and North Carolina, are following California's lead in launching taskforces and enforcement efforts, like CEP, to curtail the division in the business community where those who play by the rules and abide by the law are disadvantaged in competing against those who skirt the law. According to recent media reports, a task force of North Carolina state leaders "renewed promises to break down barriers that keep them from spotting and cracking down on business owners who skimp on taxes and workers' compensation insurance."

"It is encouraging to see enforcement agencies in California and other states like North Carolina coordinating their enforcement efforts, but we know there's still much to be done," stressed Executive Director Kate Leyden of the Valley Contractors Exchange. "We serve the counties of Butte, Colusa, Glenn, Plumas, Sutter and Yuba, and the stark reality is that the first comment coming out of a contractor's mouth when I ask about his or her business is that unlicensed contractors are still underbidding jobs."

The Western Electrical Contractors Association's Executive Director and Chief Executive Officer Terry Seabury agrees with Leyden. "It's too hard to stay in business in this economy when forced to compete on an unlevel playing field," said Seabury. "That's precisely why we support efforts like JESF and LETF, which put fraudulent contractors on notice and force compliance with the law."

Leyden went on to say, "When we ask law-abiding contractors what they need to grow their businesses, their response is 'for the state to stop making laws that aren't or can't be enforced because we can't compete and survive against the unlicensed, uninsured, cash-paying contractors.'"

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