Question:

I remember reading in your column late last year that the “California Labor Compliance Bureau” was not an actual government entity and that as an employer, I should disregard any notices I received from them. Now I’m hearing about the “Labor Enforcement Task Force.” Is that a legitimate agency?

Answer:

The Labor Enforcement Task Force, also known as the LETF, was launched by the California Department of Industrial Relations on January 1, 2012. Previously known as the Economic and Employment Enforcement Coalition (“EEEC), its purpose is to combat the underground economy.

The LETF task force members, which work collaboratively, include the Labor and Workforce Development Agency, the Department of Industrial Relations, the Employment Development Department, the Contractor’s State Licensing Board, the California Department of Insurance, the Board of Equalization, the Bureau of Automotive Repair, the State Attorney General, and district attorneys throughout California.

  • The LETF lists as its goals the following:
    To ensure that workers receive proper payment of wages and are provided a safe work environment;
  • To ensure California receives all employment taxes, fees, and penalties due from employers;
  • To eliminate unfair business competition by leveling the playing field; and
  • To make efficient use of the state and federal resources in carrying out the mission of the LETF.

It is expected that the LETF will concentrate its efforts on industries that traditionally pay low wages. Its predecessor, the EEEC, focused on industries including agriculture, auto body, car wash, tire shops, garment manufacturing, janitorial services, horse racing tracks, and restaurants. It also focused on the construction industry.

The LETF will focus on a variety of potential violations. The various agencies will determine if businesses have in place all of the appropriate licenses to conduct business. They will investigate whether employers are paying cash wages to workers, and whether they are providing them with itemized statements of deductions made from their wages. These agencies will examine whether businesses are registered with the Employment Development Department, and whether there are any records of the employees with the Board of Equalization. The LETF will determine if a business has workers’ compensation insurance and if it does not, the LETF may issue a stop order to shut down the business until a valid workers’ compensation policy is secured. If a business has classified its workers as independent contractors, the task force will scrutinize whether they were properly classified. When a business involves the use of certain equipment, the agencies will inspect whether the machinery has all of the appropriate safeguards in place.

Although the LETF is primarily targeting certain industries, all businesses should ensure that they have the necessary licenses in place, are paying the appropriate wages and making deductions, are maintaining records required by law, and are providing employees with a safe work environment. Businesses that use independent contractors should ensure that they have properly classified their workers. Even though the LETF was created to battle the underground economy, businesses with good intentions that unwittingly violate legal provisions may find themselves the subject of an LETF inspection and possible ensuing penalties.
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