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San Diego begins enforcing new contractor transparency rules to combat wage theft, leveling the playing field

A new San Diego law that went into effect Sunday requires companies serving as contractors or subcontractors on municipal projects to comply with more stringent transparency and accountability measures.

San Diego officials say the goal of the new rules, approved by the city council in August, is to help prevent wage theft and create a more level playing field between contractors by preventing one of them to circumvent the rules of the city.

The new rules, which essentially require the disclosure of more information about licenses and past labor law violations, were enthusiastically backed by unions, but opposed by many contractors.

“Wage theft, labor trafficking and other illegal practices are rampant in the industry, which is one of the reasons why a policy like this is even necessary,” said said Carol Kim, head of the San Diego Building & Construction Trades Council, on Tuesday. “Making sure companies follow basic local, state and federal laws is a very good thing for workers and consumers alike.”

The local Associated General Contractors of America was less enthusiastic on Tuesday, calling the new rules “redundant and onerous” for many contractors.

“We remain concerned that the new rules will result in fewer projects, which runs counter to the city’s stated priorities of increasing housing supply and reducing housing costs,” Dustin Steiner said. , vice president of corporate affairs for the organization. “Ultimately, MCO members will comply with the new city ordinance.”

City officials said Tuesday they were optimistic that their measured plans to handle the new law would be welcomed by contractors.

“This program is designed around education – we’re not going straight into the application,” said Leslie Gallagher, deputy director of the city’s Department of Developmental Services. “They will have ample opportunity to correct these issues before any kind of application that may affect their projects.”

The new law requires contractors applying for building permits to disclose several new pieces of information before work on a project can begin.

Information includes workers’ compensation policy numbers, state contractor licenses, city business licenses, and any enforcement actions against the contractor – pending or prior to request.

These details must be provided for each contractor and subcontractor on a project. All of the information, except information on enforcement measures, was already required from the city’s main contractors, but none of the information was required from subcontractors.

The new law also requires contractors and subcontractors performing work on public lands called “rights-of-way” to submit to the city proof of the specialized certification and training they need to perform such work.

Some contractors have expressed concern that submitting information to the city would be cumbersome and time-consuming, but city officials said Tuesday that the city’s software had been hooked up to the licensing board’s database of contractors. state contractors to streamline the process.

Gallagher said the goal is a fairer system.

“Unlicensed contractors are unfair competition for those who play by the rules,” she said.

The proposal would not apply to most small projects. The new disclosures would be required for residential and mixed-use projects of 20 or more units and commercial or industrial projects of at least 20,000 square feet.

The city could seek stop-work orders for projects that don’t comply with the new law, but officials said they would be more likely to choose less complicated methods that don’t require the courts. These include fines for code violations and delaying city inspections so that work on a project cannot proceed.

The city has scheduled a webinar for noon on Friday to inform contractors of the new rules. Visit for details.

California Daily Newspapers

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