A Temecula contractor was one of dozens to get caught in a statewide sweep looking for contractors who allegedly under-reported payrolls to skip paying higher workers' compensation insurance and taxes.
Uninsured, untaxed, unlicensed, and unregulated activity is referred to as the underground economy, according to the Contractors State License Board (CSLB).
Investigators from the CSLB, Department of Insurance, and Employment Development Department partnered together for the sweeps that were conducted June 20 and 21. “Operation Underground” caught three contractors in Riverside County that were attempting to hide the number of employees on their payrolls, most likely as a way to avoid paying more in insurance premiums and state withholding taxes, officials said.
Because of ongoing investigations into the cases, the contractors can not yet be publicly identified.
"Participants in the state’s underground economy are harmful to everyone," said CSLB Registrar Steve Sands in a statement. "Anyone who neglects their responsibility to comply with state contracting, insurance, and payroll requirements drives up premiums. At the same time, legitimate licensed contractors struggle because illegal operators underbid them."
When hiring a contractor, the CSLB urges consumers to ask to see licenses and photo ID to verify identities and always check license numbers against the CSLB’s Instant License Check website to ensure that the licenses are in good standing and employees are covered by workers’ comp insurance. Also, don’t pay in cash, or before the work is completed.