For Immediate Release

Contact: John Tenorio
J. Arthur & Associates 661/294-6204 or
Ron Johnston, PhD, 714/628-3916

Blatant Violations Lead to Roofing Task Force

Los Angeles CA - 3/24/03 - A joint task force has been formed to assist in the enforcement of labor compliance in the Southern California commercial roofing industry. The Union Roofing Contractors Association has teamed up with the United Union of Roofers, Waterproofers & Allied Workers Locals 36 and 220 to pursue the enforcement of what is believed as blatant violations of the law. The new organization has been branded The Roofing Industry Compliance Task Force.

"The commercial roofing industry has its fill of fraudulent behavior. This behavior, on the part of violating contractors, denigrates the integrity of the entire industry," says the URCA executive director Ron Johnston, PhD. "The State compliance system does not have the resources to effectively eradicate fraudulent compliance activity. The Compliant Task Force aims to assist the system, while our contractors continue in their quest to remain steadfast in providing quality work with skill and integrity," says Dr. Johnston.

When asked of the fraud, schemes or violations going on in the roofing industry, Gabriel Perea, business manager for United Union of Roofers, Waterproofers & Allied Workers Local 36 emphatically says, "We have seen a number of schemes, and yet we have not had the personnel to flush it out – until now."

According to Perea, there are several "classic" schemes for contractors to be awarded commercial roofing jobs. These schemes usually allow the contractor to illegally cut his costs, therefore able to "lowball" their bids.

Typical contractor/employer fraud includes: Underreporting payroll to the following: insurance carriers, Employment Development Department, Public Works with respect to certified payroll reports, and to taxing authorities; misclassifying employees to insurance carriers, EDD, and Public Works with respect to certified payroll reports; failing to properly pay the prevailing wage resulting in the above misclassifications; classifying employees as subcontractors; not properly reporting injuries to insurance carriers; lying to employees about the benefits they are entitled to under the workers' comp systems and EDD; "new entity" misrepresentation; filing false applications for insurance to insurance carriers that may affect premium costs.

Most of this fraud is unknown to the property owners. "All they see is a low bid. They don't see the fraud behind it," says Perea. "In the meantime, our labor force, which we strongly consider the best trained and have the best abilities in the industry, are being left out of the competitive bid process by some unscrupulous contractors."

The Roofing Industry Fraud Task Force will be focusing their efforts of compliance in both the public and private sectors. "Strict compliance and enforcement creates a level playing field," adds Brent Beasley, business manager for United Union of Roofers, Waterproofers & Allied Workers Local 220.

Johnston, Perea and Beasley agree that fraudulent activity creates a losing situation in many ways: insurance premiums escalate, government is shortchanged, legitimate contractors are shut out, property owners are held liable by authorities, and consumers are bilked out of getting a "good bang for their buck".

People are encouraged to report violators of the roofing industry to the Roofing Industry Compliance Task Force. Anyone interested in contacting the Task Force may call 714/628-3916.