Government Entities: Working Together to Gain the Greatest Impact
The Employment Development Department’s (EDD) Tax Branch works with employers to collect California’s employment taxes and data to support the employment security, child support, and personal income tax programs. The Tax Branch is committed to providing service to California employers and Unemployment Insurance, State Disability Insurance, and Paid Family Leave benefit claimants, and to increasing voluntary compliance with payroll tax laws through education, simplified reporting processes, and the promotion of fair business competition.
The EDD’s Investigation Division Criminal Tax Enforcement Program is a specialized law enforcement unit that investigates criminal violations of the CUIC, the California Penal Code, and the United States Code for federal prosecutions. This unit is staffed by sworn peace officers who work with law enforcement agencies throughout California and the JESF partner agencies to identify and prosecute employer fraud. They conduct surveillance, perform undercover operations, interview witnesses, initiate search warrants, and submit completed investigations to prosecutors to convict individuals who commit employment tax fraud. The EDD determines if the convicted party made restitution, is still on active probation, and obeys all laws with respect to the future filing of returns and payments. The conviction itself and the collection of the tax liabilities play an integral part in deterring the underground economy. The EDD also collaborates on workers’ compensation insurance investigations related to state payroll tax violations.
The Department of Consumer Affairs (DCA) protects and serves California consumers and ensures a competent and fair marketplace. The DCA helps consumers learn how to protect themselves from unscrupulous and unqualified individuals. The DCA protects professionals from unfair competition by identifying unlicensed practitioners.
The DCA – Contractors’ State License Board (CSLB) protects consumers by licensing and regulating California’s construction industry. There are about 300,000 licensed contractors in the State, in 43 different licensing classifications. In addition to consumer education on contractor and construction law, CSLB activities include: administer prospective licensee examinations; issue licenses; investigate complaints against licensed and unlicensed contractors; issue citations; suspend or revoke licenses; and seek administrative, criminal, and civil sanctions against violators. The CSLB’s Statewide Investigative Fraud Team (SWIFT) is set up to monitor and combat illegal activity. They have teams throughout the state that conduct sting operations on a regular basis and sweep construction sites. They also conduct joint operations and sweeps with other state agencies dedicated to combat underground activity.
The DCA – Bureau of Automotive Repair (BAR) investigates general auto repair complaints and ensures that shops comply with Smog Check statutes. Each year, the BAR handles more than 14,800 complaints related to auto repair and/or Smog Check inspections. The BAR staff investigates complaints and negotiates with the shop on the consumer’s behalf to achieve a mutually agreeable resolution. The bulk of complaints are resolved by mediation. Each year, the BAR returns over $6.3 million to California consumers in the form of direct refunds, rework, or adjustments.
The DCA – Bureau of Security and Investigative Services (BSIS) protects consumers by licensing and regulating the following industries: alarm company operator and alarm company employees; locksmith companies and locksmith company employees; private investigators; private patrol operators and security guards; proprietary private security officers and employers; repossessor agencies and repossessor agency employees; and training facilities and training instructors. As part of its mission, the BSIS actively investigates complaints against its licensees and works to punish unlicensed business operations. This includes the suspension and revocation of licenses and seeking administrative, criminal, and civil sanctions against violators. Undercover sting and sweep operations are conducted on an ongoing basis throughout California. The BSIS also educates consumers, administers examinations to validate prospective licensees, and issues licenses and permits.
The Department of Industrial Relations (DIR) – Division of Labor Standards Enforcement’s (DLSE), Bureau of Field Enforcement is responsible for investigation and enforcement of statutes covering workers’ compensation insurance coverage, child labor, cash pay, unlicensed contractors, Industrial Welfare Commission orders, and group claims involving minimum wage and overtime claims. The Bureau of Field Enforcement also handles criminal investigations involving these group claims.
The DIR – Division of Occupational Safety and Health’s enforcement unit has jurisdiction over every employment situation and place of employment in California which is necessary to adequately enforce and administer all occupational safety and health standards and regulations. They conduct inspections of California workplaces in response to a report of an industrial accident, a complaint about an occupational safety and health hazard, or as part of an inspection program targeting industries which have a high rate of occupational hazards, fatalities, injuries, or illnesses.
The California Department of Insurance (CDI) ensures that consumers are protected; the insurance marketplace is fostered to be vibrant and stable; the regulatory process is maintained as open and equitable; and the law is enforced fairly and impartially. The Fraud Division is charged with investigating insurance fraud, which includes the crimes of intentional misrepresentation of payroll and employee staffing in order to obtain lower rates for workers’ compensation insurance. Studies suggests that the aggressive anti-fraud campaign by the CDI, the district attorneys, the insurance industry, and California employers continues to play a substantial role in reducing crime and helps lower workers’ compensation insurance premiums for employers statewide.
The Franchise Tax Board’s (FTB) primary function is to administer the Revenue and Taxation Code. Elected officials determine the tax policy for raising revenue. Under the direction of the FTB’s Chief Law Enforcement Officer, the Criminal Investigation Bureau (CIB) enforces the criminal provisions of the Revenue and Taxation Code. The CIB’s principal mission is to identify, investigate, prosecute and deter tax evasion and fraud, and encourage compliance with California income tax laws while maintaining the public’s trust through publicity. The CIB takes over where voluntary compliance and civil enforcement efforts end. Special agents with full peace officer powers investigate alleged criminal violations of the Revenue and Taxation Code, principally income tax fraud and evasion, and assist in prosecuting non-compliant individuals. The special agents work cases independently (agency only) and partner with city, county, State and federal agencies (jointly) when other charges exist. The special agents’ efforts are supported by forensic auditors, collectors, analysts and support staff; basically a micro-organization all in one bureau. The CIB also relies on a strong collaborative enterprise to accomplish their mission.
The California Department of Tax and Fee Administration (CDTFA) administers tax programs in four general areas: sales and use taxes, property taxes, special taxes and fees, and the tax appellate program. The Investigation Division and Special Operations Bureau plans, organizes, directs, and oversees all criminal investigative activities for the various programs administered by the CDTFA. Its goals are to identify tax evasion and new fraud schemes, and actively investigate and assist in the prosecution of individuals who are violating the laws administered by the CDTFA.
The Department of Justice Attorney General works to protect California’s workers, legitimate businesses, and taxpayers through the Underground Economy Unit. The Underground Economy Unit brings civil and criminal actions against persons engaged in the underground economy. It has used California’s laws to obtain restitution of unpaid wages, civil penalties, and injunctions to bring businesses into compliance with applicable labor and employment, tax, and licensing laws. These enforcement efforts deter underground economy violations, recapture lost revenues, and protect workers and legitimate businesses from illegal and predatory enterprises. The Underground Economy Unit has prosecuted cases involving: wage, tax, and insurance issues including the theft of wages, unpaid overtime, denial of breaks, payroll tax evasion, and misclassification of employees as independent contractors; patterns of safety violations leading to fatal workplace injuries; workers’ compensation insurance premium fraud; and the illegal avoidance of workers’ compensation coverage for employees.
The United States Department of Labor’s mission is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights. The Fair Labor Standards Act prescribes standards for wages and overtime pay, which affect most private and public employment. The act is administered by the Wage and Hour Division. It requires employers to pay covered employees, who are not otherwise exempt, at least the federal minimum wage and overtime pay of one and one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The Wage and Hour Division also enforces the labor standards provisions of the Immigration and Nationality Act that apply to aliens authorized to work in the United States under certain nonimmigrant visa programs (H-1B, H-1B1, H-1C, H-2A).
The California Department of Alcoholic Beverage Control’s agents are peace officers under Section 830.2 of the California Penal Code and are empowered to investigate and make arrests for violations of the Business and Professions Code that occur on or about licensed premises. Agents are further empowered to enforce any penal provisions of the law in the state. Licensees who violate state laws or local ordinances are subject to disciplinary action and may have their licenses suspended or revoked. These licensees are entitled to a hearing before an Administrative Law Judge and an appellate process to the State Supreme Court.
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Last Revised: 07/05/2022