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The Contractor Coaching Partnership Blog

Which underground contractor is the biggest threat to legal firms?

Posted by Mark Paskell on Sat, Jul 24, 2010 @ 09:11 PM

In a recent RRP training in Southampton, New York a contractor yelled out "how am I going to survive when I have to compete against illegal immigrants and the local fireman contractor working illegally". In another training in Mass a painting contractor told us that he is getting killed in his town going up against local teachers and college kids with under the radar side businesses. In another training in Mass, a contractor says he competes against the whole town fire department on half of his window and siding jobs. 

All too often we hear numerous reports of illegal contracting activity all over the region. The contractors in our RRP trainings tell us they are there to be certified because it is the right thing to do even though they are tight on funds from the economic slow down.

Since January, we have trained 3000 contractors in Mass and New York and we consistently hear the pleas for a level playing field and equal enforcement. The majority of the contractors fear lost projects from a homeowner who is all to willing to accept the lower price from the illegal contractor. Many doubt the local building inspector or state officials have the will or resources to enforce the rules and regulations on the books. They further doubt that the RRP lead rule will be enforced. The contractors cite overworked and under staffed building departments as well as the age old tradition of protecting the old boy network.

In our trainings we are constantly reminded that there are four groups that make up the underground contracting community. 

Group 1; The contractor who elects to work with no insurance, under the table labor, no permit, cash payment so they don't have to pay taxes, no license, no certifications.

Group 2; the undocumented illegal immigrant contractor

Group 3; the local fireman with an illegal side contracting business

Group 4; the local teacher and college kids with an illegal side contracting business.

Legal contractors are paying thousands of dollars to comply with the rules and regulations to be a professional contracting company. These include but are not limited to; liability and workmen's comp insurance, building license, state registration, W-2 employees with matching taxes, OSHA training, proper classification of employees, pulling permits, paying taxes, and most recently becoming EPA RRP certified.

Legal contractors deserve a level playing field

There is no better time than now for our state and local officials to begin the crack down on all illegal contractor activity. It should not matter if it is an illegal immigrant contractor or the local fireman who chooses to own a side business without the required practices. Those who play by the rules deserve a level playing field. Maybe the RRP Lead Rule will give officials the tool they need to shut down illegal activity by imposing fines and work stoppages.

Comments from contractors in our RRP Trainings

We asked many of the contractors in our RRP trainings which group they think is the greatest threat to their livelihood and this is what we were told.

Group 2; The undocumented illegal alien contractor is one of the biggest threats. They are good at hiding and many homeowners are attracted to the rock bottom price. In addition group one contractors often pick them up at the local big box store or on the side of the road on an as needed basis and pay them under the table with no insurance or taxes.

Group 2 an 3; the local fireman or teacher who works on the side without the proper credentials. These groups cause the greatest angst among the legal contractors because;

1. The local fireman and teacher often use their profession and community reputation as a gage of trust to convince homeowners to hire them. Then they ask the homeowner to pay cash with nothing in writing. One contractor told us it goes something like this; "you can trust me, I am your local fireman or in the case of the teacher " I am the teacher who has your kid in class."

2. The local fireman and teacher are part of the old boy network and often buddies with the town inspectors and selectman.

One contractor was careful to point out that he also knows many fireman and teachers who have legal side business and they play by the rules. He went on further to say that a couple of legal contractor firemen he knows well, actually take issue with other firemen in their department who choose to work illegally. 

I wonder how that dynamic works when they are all in the firehouse late at night with no fires to fight!

Which group do you think poses the greatest threat to your contracting prospects for business in your marketplace?

mark the coach


Tags: Enforcement, Contractor Licensing, EPA RRP Lead Rule