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Northern California county considering radical work comp pilot program

Over the last few years, there has been a sustained call at the state capital to crack down on the number of uninsured employers, meaning those who fail to provide the requisite level of work comp coverage.

One industry where uninsured employers have frequently found themselves in the crosshairs of state legislators is construction.

Specifically, legislators want to put a stop to the so-called "underground economy" in which unlicensed contractors who do not secure work comp insurance for their employees routinely outbid licensed contractors who have higher costs due to the their decision to comply with state law.

Now, a northern California county is considering the introduction of a first of its kind system that is designed to eliminate this underground economy and "level the playing field" between unlicensed and licensed contractors.

A few weeks ago, the Butte County Board of Supervisors gave preliminary approval to a measure that would require all owner-builders and contractors (licensed or unlicensed) to obtain work comp insurance when securing permits to perform work on roofs or pools.

Those owner-builders and contractors who will be performing the work on their own (with the help of no employees) would be exempt from the requirement. However, the proposed program calls for the state agency in charge of enforcing the state's work comp laws to still be notified of the situation so it can potentially send someone to the worksite to verify that no other workers are present.

According to reports, the state of California is excited by the proposed pilot program and is dispatching personnel from the Contractors State Licensing Board to Butte County to coordinate outreach/education efforts among contractors.

"What you have already done, what your building department has already done, is second to none," said David Fogt, director of enforcement for the Contractors State Licensing Board to the Board of Supervisors.

Butte County officials have indicated that the areas of roofing and pool work were singled out for the pilot program since they are small enough to be manageable yet busy enough to provide an accurate picture of whether the program is working.

A final vote on the pilot program by the Board of Supervisors is scheduled for early next week.

If you are an uninsured California employer facing a real problem - prospective fine, prosecution, an employee injury or litigation - there are steps that can be taken to minimize the consequences. In these difficult circumstances, you may want to consider consulting with an experienced legal professional.

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:

Chico Enterprise-Record "Pilot plan may use workers' comp to go after 'underground economy'" Aug. 2, 2011

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