The Pacific Association of Building Service Contractors is the sponsor of Assembly Bill 596, by Assemblyman Ed Chavez.  AB 596 would require the Labor Commissioner to appoint an advisory committee on the building maintenance industry similar to the existing advisory committee for the garment industry.  This committee will look into the problems faced by the janitorial industry, especially the Underground Economy in this industry. 

The Underground Economy is made up of individuals and businesses that deal in cash and/or use other schemes to conceal their activities and their true tax liability from government licensing, regulatory, and taxing agencies.  Those individuals and businesses that operate in the Underground Economy gain an unfair competitive advantage over businesses that comply with the law.  This also causes the amount of revenue available for essential services and infrastructure to be reduced, thereby shifting a greater burden of tax responsibilities to the state’s honest citizens and taxpayers.

It is estimated that the size of the underground economy could be as high as 40 percent of the aboveground economy. Based on this estimate, the California underground economy is estimated to be between $6 and $14 billion.  Economists also caution that California 's underground economy will continue to grow and sap the state of at least $1 billion annually in sales, personal income and business taxes.

The underground economy includes over 600,000 independent contractors and illegal workers in the agricultural, construction, garment, and janitorial industries.  All of these industries except janitorial are regulated in some fashion by entities that regulate, license and track their business practices.

This is a positive first step in addressing the problems faced by the janitorial industry.