Homeowners, looking for the cheapest price are hiring illegal contractors at an alarming rate. Homeowners read and listen to the news and think that they can beat up any contractor to get a cheap price. Consumers are more inclined today to take a chance on the lowest price (which comes with the risk that the contractor is not playing by the rules) due to our current economic climate. They are willing to believe the cheap price will still get them a great job from desperate contractors.
The old cliche that you usually get what you pay for seems to be less important even to many of today's affluent consumers.
New Risks Homeowners Have New Clue About; OSHA, EPA, and State Enforcement of Residential Contractors
For the first time the Residential Construction Industry is the focus of aggressive government regulation. Government agencies are setting the stage to bring the residential contractor into compliance with OSHA regulations and EPA RRP practices. In addition many states have formed task forces to go after the the underground community. The goal is to insure that businesses pay employees above the table, properly classify them and pay for workmen's compensation coverage, pay unemployment insurance coverage, contribute to Social Security and Medicare, payroll taxes and ensure a level playing field for legitimate businesses.
Why does this pose a risk for the homeowner who hires an illegal contractor?
Well consider this scenario; Homeowner in Natick, Massachusetts hires a contractor to renovate a kitchen and porch on a home built in 1926. The homeowner gets 7 bids and hires the lowest one. The contractor hired is licensed and said he is insured. The homeowner believes him. The contractor tells the homeowner to get the permit. The contractor is small he only has two workers. He is not EPA RRP or Mass RRP certified. He knows little about OSHA. He has no knowledge of the Mass RRP Lead Law or OSHA requirements regarding keeping the worksite safe for workers. In addition, the contractor knows nothing or claims to know nothing about the OSHA Fall Protection Standard that will be enforced starting 6/14/2011.
Residential Construction Industry; Targeted by OSHA
OSHA has hired many new inspectors. The new directive from the head of OSHA in Washington is to go out and stop by all residential job sites. Look for violations and penalize accordingly.
Simultaneously the Mass DOS, who has been approved to hire a new RRP enforcer, starts their enforcement program in earnest in the spring of 2011.
At the same time, the Department of Labor Underground task force is aggressively going after residential contractors. They seek those who mis classify their workers, don't have workmen's compensation, pay their workers as subs but claim that they are independent contractors, don't contribute to payroll taxes and unemployment insurance.
Now all three agencies decide to go out together for a 5 day sweep of Metrowest towns. (Note; Shawn McCadden and I were told in person by OSHA and Mass DOS officials that they are going to work together at the OSHA/DOS workshop in Amherst).
So they come upon the Natick project. They see the dumpster in the driveway and stop in to say hello. Demo has begun on the porch and kitchen. There are no signs warning about the dangers of lead. There are no barriers set up to keep people out. Their is a worker standing on the top of the step ladder as they arrive. A roofer is on the porch roof with no fall protection. There is a pile of debris from the kitchen thrown on the lawn with no plastic down and no cover.
There is a fan in the kitchen window blowing dust out. There are two guys inside with N100 respirators on and sledge hammers going to town.
This is going to be a very bad day for the contractor. He will be cited by OSHA for failure to comply with the OSHA respirator standard. He will be cited for not following the fall protection standard requiring fall protection in place for anything over 6 feet. He will be cited for the improper use of a ladder.
He will be cited by DOS for working without a lead license, failure to provide a renovate right brochure, failure to set up exterior containment and signage, failure to close of all windows and doors, blowing dust out of the demolition area and not having a job log log.
Next he will be asked by the Department of Labor inspector about workmen's compensation. The contractor says they are fully insured. The inspector pulls out his laptop and logs in to the state database to confirm coverage, there is none. The DOL inspector immediately issues a stop work order. The job stops. OSHA also issues a stop work order and tells the contractor no more work unless you have the right staging in place. DOS says I want you to get your guys tested for lead poisoning and stop work until everything is set up in compliance with the Mass DOS RRP Lead Rule.
So yes, the contractor is having a bad day. Now he cannot work on the site until he clears up all his issues. In addition he doesn't have the capital to fix his non compliant issues. He leave the job. Goes home that night and figures out he is all done, OUT OF BUSINESS.
Now the homeowner is going to have a real bad day, in fact a whole bunch of them.
Don't think that this can't happen? Many contractors are deciding to say the heck with the RRP Lead Law. Their costs are lower. Homeowners are taking a huge risk hiring the underground contractor.
In the end you usually get what you paid for.
mark the coach