BLACK MARKET BUSINESS: Bad For Everyone
No, this is not a crazy movie with mind control and robots; though the title of Labor Enforcement Task Force may sound a little ominous, they are actually working to help improve conditions for hardworking employees. Also known as the LETF, it was put in place for the benefit of both employees and LEGAL businesses working to follow the letter of the law. This coalition of enforcement agencies within the California State government operates under the Department of Industrial Relations to help enforce work condition violations, wage violations and other illegal actions by companies working in what they call The Underground Economy.
Members of the LETF coalition include:
-The Division of Occupational Safety & Health
-The Division of Labor Standards Enforcement
-The Employment Development Department
-The Contractors State Licensing Board
– The California Department of Insurance
– The Board of Equalizations
– The Bureau of Automotive Repair
– The State Attorney General, and
-The Alcoholic Beverage Control agency (ATF).
One of the main objectives of this group is to weed out and crack down on companies operating without proper licenses, effectively working under the radar and avoiding paying proper taxes, carrying legal coverage for workers compensation, or following labor codes pertaining to minimum wage and other wage requirements for their employees. Businesses like these which operate without oversight create unsafe working conditions for employees, do not pay fair wages, and hurt the local business economy by doing so. This underground economy creates an imbalance where the legally operating businesses that pay the correct wages and follow rules for taxes and licensing are unable to match the low undercutting prices of the “black market” businesses. Because these illegal businesses pay no taxes, the government has a clear reason to support the coalition’s initiative, but you should too. When these underground businesses are shut down it means better wages and better, safer working conditions for employees as well.
While this “underground economy” is certainly an issue throughout the US, it is a HUGE industry here in California. Our State alone accounts for an estimated loss that could be as high as $28 BILLION a year from the lack of insurance, payroll taxes, income and business taxes and licensing. The numbers paint a clear picture as to why the Government wants to crack down on the businesses operating underground, but this kind of discrepancy in the economy places far too great a burden on the honest, legal companies not trying to abuse the system and the great resources of the Golden State.
Photo Credot: Shutterstock/Dusan Petkovic