IR # 98-2
Wednesday, January 14, 1998

Rick Rice
Dean Fryer
(415) 972-8835

Proposed DIR Budget Includes Increase for Targeting Underground Economy

SAN FRANCISCO -- Governor Wilson's proposed budget for the Department of Industrial Relations contains key elements and additional funding to fight the underground economy and help level the playing field for the state's legitimate employers, DIR Acting Director John C. Duncan has announced. The proposal adds $12.5 million in funding to assist the Department in meeting its commitment to ensuring compliance with workplace safety, health and labor laws, bringing DIR's total budget to $228.9 million.

The Governor's budget provides for increases for the Division of Labor Standards Enforcement (DLSE) programs that target the underground economy. The Targeted Industries Partnership Program (TIPP) will receive $1.764 million for the continuation of its program and $643,000 and 10 positions to expand its efforts into the restaurant industry, where increases in compliance problems have been noted. TIPP, a recipient of the Council on State Governments Innovations Award, was designed to enforce existing laws more effectively and efficiently by utilizing the resources of those government agencies that have an enforcement or educational mission in the targeted industries of garment and agriculture.

The budget also proposes $1.173 million to continue DIR's involvement in the Joint Enforcement Strike Force (JESF). JESF was designed to focus on the underground economy, and like TIPP, JESF involves a partnership with other state and local agencies to enforce existing laws more effectively and efficiently. JESF participants conduct both audits and on-site investigations of businesses to determine if they are in compliance with payroll tax, labor and licensing laws.

Other additions to the DLSE budget include an increase of $404,000 and six new investigator positions to address a significant increase in discrimination complaints. The Labor Commissioner has the responsibility to investigate, process, and resolve employee complaints of discrimination in the workplace. In addition, $191,000 will be will be added to the budget to address the workload generated by the passage of SB 1328, which expands enforcement efforts to include subcontractors in violation of prevailing wage requirements.

The Governor's budget proposal provides for increases to Cal/OSHA programs that are responsible for ensuring the safe and healthful working conditions for California workers. Included is $3.626 million in funds from the U. S. Department of Labor to enable Cal/OSHA to increase workplace health and safety inspections and consultations, increase information available to the public, and to increase General Fund collections of OSHA penalties.

Cal/OSHA will also see an additional $618,000 from the proposed budget to address increasing demand for elevator safety inspections due largely to the increase in construction in the state. Beginning January 1, 1998, OSHA became responsible for inspections of wheelchair lifts in, addition to the required inspection and issuance of operating permits for elevators in California.

Copies of a summary of the 1998/99 Governor's proposed budget for the Department of Industrial Relations can be requested by calling 415-972-8835.

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