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John Norwood, CPSA lobbyist and Executive Director, reported this week that the association helped kill a bill which would have provided workers’ compensation benefits to people using the underground economy to compete against legitimate businesses.

AB 2016 (Gonzales-Fletcher) would have expanded the workers’ compensation coverage contained in a homeowners or renters policy to cover “day laborers.” The author’s intent was to cover persons that a contractor or homeowner hire at the Home Depot, Lowe’s or other home improvement store parking lot.

Under current law, every homeowners or renters insurance policy contains workers’ compensation coverage intended to cover nannies or housekeepers or other persons the occupant regularly employs. In order to be eligible for such coverage the employee must be paid at least $100 and have worked 52 hours or more for the homeowner or occupant over the proceeding 90 days. AB 206 would have amended current law to provide workers’ compensation coverage for day labors without regard for the 52 hour threshold. As such, a day laborer hired for a project for only one day or part of one day would be covered.

“For every job a homeowner would hire a day laborers to do there is a legitimate contractor or handyman or service company will to do the same job,” said Norwood. These legitimate businesses have to purchase their own medical or disability insurance, pay taxes and incur the other obligations of being in business. Government should not foist on homeowner the cost of medical and wage loss coverage for people that compete for business in the underground economy to the disadvantage of legitimate businesses. That would amount to promoting the underground economy.”

The underground economy is a huge problem in California, estimated at costing the state between $8-10 billion dollars in tax revenue. For a number of years, CPSA has been working with other businesses, labor organizations and state agencies concerned with the challenges presented by the underground economy. These groups have supported various bills that would make it harder for those who cheat to compete. CPSA viewed AB 206 as going in the wrong direction on this issue and incompatible with the work of organizations to fight against the unfair advantage presented by the underground economy. With this harmful bill removed from consideration, the CPSA can continue to fight for the interests of our members and the pool and spa industry as a whole in California.