New Law Reinforces Messages of CALPASC LEVEL Program

SACRAMENTO, Calif., Dec. 9, 2011 /PRNewswire/ -- The California Professional Association of Specialty Contractors (CALPASC) welcomes the enactment of Senate Bill 459 (SB 459) authored by Senator Corbett (D-San Leandro) as reinforcement to the CALPASC LEVEL Program, which was developed to create a more level playing field for compliant contractors within the construction industry. SB 459 cracks down on the misclassification of employees as independent contractors by increasing the penalties and disciplinary actions on employers who voluntarily and knowingly misclassify employees. The bill calls for the California Labor and Workforce Development Agency to notify the Contractors State License Board (CSLB) of a violation and "to require the board to initiate an action against the licensee." CALPASC Chief Executive Officer Brad Diede said, "SB 459 not only assigns stiff fines for employers found to be deliberately skirting the law but also calls for coordination among state agencies, which is exactly the focus of the CALPASC LEVEL Program."

As outlined in the bill, penalties ranging from $5,000 to $15,000 will be assessed for each violation of willful misclassification, while penalties of between $10,000 and $25,000 will be assessed for each violation of willful misclassification that are found to be a repeated pattern or practice.

Additionally, SB 459 is written to provide for successor entities, or entities that continue the role or position of another, to be liable for the misconduct. In the construction industry, it is not uncommon for contractors to close a business, start a new one under another name or have multiple businesses. SB 459 directly addresses this by stating "any penalty or disciplinary action by the Labor Commissioner or the CSLB will remain in effect against any successor entity that is engaged in a similar business, and has one or more of the same principals of the prior entity."

Diede commented, "Those contractors or employers who have been fined in accordance with the law but believe filing for bankruptcy and/or establishing new entities will provide cover will be surprised."

Diede commented further, "While the distinction between employees and independent contractors is very difficult to define in most industries, it is much clearer in construction. The violation, in particular when there is a repeated pattern or practice, will now follow serial violators, and the trail of violations could be a deterrent for some unlawful contractors."

In 2010, CALPASC established the LEVEL Program to shine a spotlight on violators through the coordination between state agencies, other associations and legitimate contractors.

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)