California’s action serves as a model for licensing boards everywhere.
You won’t often find in
this space praise for government bureaucrats, but let’s give credit where it’s
due. Late last July, California’s Contractors
State License Board (CSLB) mounted an undercover sting operation in conjunction
with San Diego
law enforcement agencies and the California Department of Insurance that nabbed
13 violators of the state’s home improvement licensing laws. Four HVAC
contractors and one plumbing contractor were among them. Bravo.
Sure, a cynic could point out that the busted tradespeople represent only a
miniscule percentage of unlicensed contractors operating in the state or even
in the San Diego area. Yet by publicizing the sting to both the trade press and
general news media, the CSLB’s action makes it reverberate far beyond the
individuals who got caught. Publicity causes all unlicensed contractors to look
over their shoulders. This is the type of activity that licensing boards ought
to be doing more of, along with publicity campaigns that inform home and
building owners about the dangers of using unlicensed tradespeople and how to
turn them in.
Unlicensed operators typically do not carry workers’ compensation and
professional liability insurance. Owners may be held liable if a worker is
hurt on their property and left without financial recourse if something goes
wrong with the project. Most property owners are totally in the dark about such
things in their quest to find someone who works cheap. Some jurisdictions have
mounted public awareness advertising campaigns to educate the pubic about the
potentially costly consequences of using unlicensed tradespeople. Often these
advertisements are considered public service announcements and are run for free
by local media outlets.
I’ve also seen ads in some states notifying homeowners they are under no legal
obligation to pay for work performed by unlicensed people. If this tactic
became widespread, we’d likely see a steep decline in unlicensed work.
Sting operations are more complex undertakings that require considerable
resources in both money and manpower. That’s why they are so rare. But it’s a
better use of licensing agency resources than what most of them do.
Which amounts mostly to a lot of paper shuffling and harassment of licensed
contractors who fail to dot an “i” or cross a “t.” Skewed enforcement
priorities come about because contractors who play by the rules are easy to
identify and scrutinize.
If you qualify for a license, pay the fee, pull required permits and call for
inspections, it’s easy to keep track of your activities and nitpick your jobs.
It takes much more effort to uncover illegal work taking place and mete out
penalties sufficient to discourage it. In many jurisdictions the most severe
penalty for trade malfeasance is loss of license, but what does that matter to
someone who never bothers to get one?
Licensing bureaucrats and their trade allies constantly complain about lack of
funds to hire enough inspectors. However, the real problem with most licensing
agencies is not so much a lack of firepower as aim. Just as communities can’t
afford to put a cop on every street corner, there will never be enough money to
inspect every jobsite, and funding shortages will only get worse given the dire
state of public finances throughout the country. Instead of crying poverty,
licensing authorities need to be more imaginative in finding ways to get the biggest
bang for their bucks. Public awareness campaigns and sting operations can
achieve more than a couple of extra inspectors in protecting the public and
knocking unlicensed tradespeople out of their comfort zone.
Laws that go unenforced are worse than no laws at all, because they engender
disrespect for the law. Where licensing laws are routinely circumvented with
little threat of penalty, those jurisdictions might be better off with no
licensing at all. At least that way the conscientious contractors would have a
level playing field with those who don’t give a hoot.
Let’s also remind ourselves that the ranks of inspectors could be increased by
tens of thousands at no additional cost if duly licensed contractors would take
it upon themselves to self-police their trades. Legitimate contractors and
their crews are plugged into the local grapevine and often know of work that’s
taking place on the sly by people without proper credentials.
There’s a time and a place for “mind your own business,” but this isn’t one of
them. Take a deep breath and start blowing that whistle. Your industry, your
business and public health and safety will all be better off because of it.
Unlicensed Contractors Get Stung
October 1, 2010