IR #2005-38
September 9, 2005

Rick Lopes, Contractors State License Board    (916) 255-4161
Renee Bacchini or Dean Fryer, Dept. of Industrial Relations    (415) 703-5279
Loree Levy, Employment Development Dept.    (916) 654-9029

EEEC Takes Aim at Underground Economy in San Bernardino County
Two-day sweep by new labor and tax law enforcement unit
focuses on state's multi-billion dollar problem

SAN BERNARDINO - San Bernardino County is the latest target zone for the state's new Economic and Employment Enforcement Coalition (EEEC). The multi-agency task force is sweeping California for illegal underground economy activity. In this week's sweep of construction sites in San Bernardino County, the EEEC targeted businesses that avoid labor, tax and licensing laws to gain competitive advantage over the almost 300,000 legitimate contractors who follow the law. A special focus was also placed on worker safety.

"It is estimated that the California's underground economy ranges in size from $60 to $140 billion a year. The underground economy is fueled in part by unlicensed contractors who also prey upon consumers," said Victoria Bradshaw, secretary of the Labor and Workforce Development Agency.

Partner agencies comprising the EEEC are the Contractors State License Board (CSLB), the Department of Industrial Relations' Division of Occupational Safety and Health (Cal/OSHA), Division of Labor Standards Enforcement (DLSE) and the Employment Development Department (EDD).

In this latest sweep, three partnered teams visited three-dozen different construction sites in San Bernardino County on Wednesday and Thursday. They interviewed workers, managers, owners, and safety officers and checked the businesses' paperwork.

"We're all affected by contractors who break the law. Not only do they take business away from legitimate business people, they're putting consumers at risk," said CSLB Registrar Steve Sands. "If a consumer has a problem, there's very little that can be done to help them. Plus, if a worker gets hurt while on their property, the consumer could be responsible for paying the medical bills."

The two-day sweep resulted in the following:

"Every year there are hundreds of workplace fatalities in the state. Many of these deaths can be prevented if employers comply with applicable safety regulations," said Len Welsh, Cal/OSHA's acting chief. "The EEEC gives us an increased opportunity to deliver enforcement and the message of safety where it counts the most."

Sweeps in San Luis Obispo and Santa Barbara Counties last month netted about 170 violations and almost $315,000 in potential fines. The real success of these ongoing operations will be with the impact they have on bringing individuals and employers into the honest business world.

Other Task Force teams are conducting similar industry sweeps in agriculture, restaurant, car wash, garment manufacturing, janitorial and racetrack businesses.