The Oregon Construction Contractors Board has hired more inspectors and increased its surveillance of online bulletin boards to sniff out illegal construction activity.

PORTLAND — The Oregon Construction Contractors Board has hired more inspectors and increased its surveillance of online bulletin boards to sniff out illegal construction activity. But some contractors are still willing to risk working without licenses.

The state board from April 1 through June 30 issued 256 penalties to unlicensed contractors and contractors who hired unlicensed subcontractors.

That's a slight uptick from the same time last year, when 234 penalties were issued. Though most contractors agree that financial instability is the main reason why contractors forego licenses, they have different opinions on such actions.

Contractors are notified to renew their licenses six weeks before they expire; the cost is $260 every two years. The Construction Contractors Board employs people to periodically check construction sites for proper licensing, and also has online forms and a phone hotline for reporting unlicensed workers.

A contractor caught working without a license can be fined up to $5,000.

Before the recession hit in 2007, the number of contractors caught working without a license was significantly lower, according to Gina Fox, education manager with the Construction Contractors Board.

Between April 1, 2006 and June 30, 2010, only 61 penalties were issued. However, in just the last quarter, Fox said that 42 e-mail warnings were sent to contractors advertising for work without a license.

"It's an ongoing process working to try and deter unlicensed contractors," Fox said. "Our agency has reached out significantly through Craigslist and other bulletin board-type services to check if people are licensed."

Dave Seigner, owner of commercial painting company Seigner & Co., says unchecked, unlicensed activity continues to be a problem, especially in the residential market. He said he knows of at least one residential painting contractor working without a license because his credit is so bad that he doesn't qualify for liability insurance.

"The excuse that permits are too expensive rings hollow for me," Seigner said. "If you're working for yourself, you don't even have workers' compensation. I suggest people that find the permits too expensive get out of business."

But for smaller contracting operations, a $260 fee isn't small change, according to Kathryn Merritt, owner of Great Kate Construction Co. Merritt said she is aware of unlicensed work taking place in Portland, but that it's hard for her to blame these contractors, considering the dire financial straits some are in.

"The construction industry is an incredibly difficult place to survive right now," Merritt said. "I make sure the people I hire are licensed and bonded because I have to protect myself. But I don't hold it against these individual firms. They are just out there trying to survive."

Someone painting a house without a license is one thing, but the thought of unlicensed workers performing electrical, construction and other work that could affect the safety of a building is a scary one for John Killin, executive director of Independent Electrical Contractors of Oregon. The pay rates for construction these days, Killin said, are already lower than in the past, so the threat of a consumer paying an unlicensed contractor under the table for a better rate is diminished somewhat.

Killin is especially concerned that the activity is notoriously difficult to track. He has encouraged IEC members to report any unlicensed activity they see.

"The numbers we see on unlicensed contractors are a function of what we can catch as opposed to what's really out there," Killin said. "This issue and how it presents a safety hazard to the public is always a concern for us."