California Professional Subcontractors Urge Builders to Examine Contractors' Practices as Part of Compliance Efforts

SACRAMENTO, Calif., Oct. 24, 2011 /PRNewswire/ -- The California Professional Association of Specialty Contractors (CALPASC) obtained a copy of the October 3, 2011 memorandum sent by national builder, KB Home to its vendors regarding the recently initiated U.S. Department of Labor (DOL) investigations into pay practices of several national homebuilders. According to the memorandum, DOL is requiring KB Home to provide a list of all contractors and suppliers, including addresses and telephone numbers and intends to investigate some of the national builders' contractors and visit worksites and talk with contractors' employees. The memorandum goes on to offer resources for contractors and suppliers, including fact sheets from the DOL Wage and Hour Division, to educate themselves on how to be compliant and suggests they may want to engage an attorney to assist in any uncovered violations that "can lead to significant back wage liability."  

California Professional Association of Specialty Contractors (CALPASC) Chief Executive Officer Brad Diede commented, "CALPASC is encouraged that home builders are taking initiatives like this to raise awareness about the importance of compliance; however, much more needs to be done."

According to California Labor Code Section 2810, a prime contractor is specifically precluded from entering into a contract with a subcontractor if the prime knows—or should know—the contract does not include sufficient funds to comply with local, state, and federal laws or regulations governing labor and services. Additionally, California Labor Code Section 6400 exposes builders to Cal/OSHA penalties and citations as the "controlling" employer, when subcontractor work areas are unsafe or hazardous. And, the Contractor State License Board (CSLB) and other state agencies emphasize the importance of prime contractors realizing they are at risk when hiring subcontractors who underbid a job.

"Too often contracts are awarded to low bidders who are flagrantly violating the most basic laws and regulations," states Diede. "In effect, this penalizes those contractors who are complying with the law and that's not right."

Diede goes on to say, "The number of non-compliant, unlawful contractors benefiting by robbing the state of millions of dollars led CALPASC to establish the LEVEL Program, which encourages coordination between state agencies, other associations and legitimate contractors to crack down on cheating contractors."

There are multiple steps builders can take to proactively put systems and processes in place while maximizing the hiring of compliant subcontractors. Some of these steps include:

• Investigate red flags such as any bid outside the bid spread of known, respected trade contractors.
• Complete a thorough investigation of trade contractors who haven't worked for you before, or haven't worked for you in a long time.
• Conduct frequent jobsite visits, including interviews with trade contractor employees, to ensure all labor and safety laws are being followed.
• Canvass other builder personnel to identify reputable trade contractors in your area.
• Send out a company bulletin that emphasizes taking an unrealistic bid can result in significant liabilities, poor workmanship and negative publicity.

"Builders need to educate themselves on how to identify compliant contractors and by doing so proactively, they can minimize being forced to respond after the fact," adds Diede.

The California Professional Association of Specialty Contractors is a nonprofit 501(c)6 trade association advocating on behalf of trade contractors and suppliers of building materials in California. CALPASC is committed to educating members on complex issues and advancing safety and compliance within the building industry.

www.calpasc.org

SOURCE California Professional Association of Specialty Contractors (CALPASC)

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