Investigation of National Builders is Not a Union Versus Builder Matter According to the California Professional Association of Specialty Contractors

Sep 15, 2011, 15:52 ET from California Professional Association of Specialty Contractors (CALPASC)

SACRAMENTO, Calif., Sept. 15, 2011 /PRNewswire/ -- On September 8, 2011, a national media outlet announced the Federal Labor Department is investigating pay practices of several national homebuilders, including PulteGroup, Inc., Lennar Corporation, D.R. Horton, Inc. and KB Home. According to California Professional Association of Specialty Contractors (CALPASC) Chief Executive Officer Brad Diede, "The investigation was no surprise. Trade contractors frequently report that builders are hiring non-compliant contractors—this is not a union versus builder issue as portrayed in the Wall Street Journal."

Diede went on to say, "CALPASC has developed a statewide coalition of both union and non-union affiliated organizations to promote effective construction enforcement in California. This is clearly not just an issue for unions."

California Labor Code Section 2810 specifically precludes a prime contractor 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. According to the Contractor State License Board (CSLB), it is important for prime contractors to realize they are at risk when hiring subcontractors who underbid a job. In fact, the cheapest bid from a second-tier contractor on a public works job can be costly to the prime contractor if it is too low.

"If builders continue to hire the lowest bidder, regardless of compliance, unscrupulous subcontractors will almost always get the work," said Diede. "And with minimal construction work available in this economy, it's vital that legitimate subcontractors get the work."

The CSLB has taken steps to mitigate the noncompliant actions of several contractors. On June 3, 2011, the CSLB cited Black Diamond Electric, of Antioch, CA, for employing uncertified electricians on residential construction jobsites for work they were doing in Roseville, CA for developers D.R. Horton and Meritage Homes. Earlier in the year, the CSLB cited Fresno, CA-based HDD Electric for employing uncertified electricians at a K. Hovnanian Homes jobsite in Rancho Cordova, CA. The CSLB found HDD Electric in direct violation of California Labor Code Section 3099.2, which requires anyone performing work as an electrician must have a Division of Apprenticeship Standards electrical certification card.

The problem is not unique to California or one trade. John Laing Homes (JLH) recently lost the appeal of a citation for violations of fall protection requirements at an Orange County, CA jobsite. The California Division of Occupational Safety and Health (Cal/OSHA) classified JLH as a "controlling" employer that should have been aware of the serious exposures to its subcontractor's framing employees and should have ordered the serious hazards corrected immediately. The Denver Post reported on citations against homebuilder D.R. Horton and four subcontractors for safety violations following an inspection of a residential project in Parker, Colorado

"Builders need to join forces with compliant subcontractors and question extremely low bids as well as subcontractors who consistently provide low bids," claims Diede. "Subcontractors who skirt the law put employees and consumers at risk, and the government loses tax revenue."

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.

SOURCE California Professional Association of Specialty Contractors (CALPASC)