How do you deal with a competitor not following legal requirements (OSHA and EPA standards, licensing, etc.)?

We have never come across any knowledge of a competitor not being licensed/insured etc, but we see so many contractors in our area who are not following the lead laws at all. We make sure that any jobs that WE do, the rules are followed. When a customer complains about our higher price on lead jobs, saying the other guys were much cheaper, we quickly review our estimate, but more often than not we tell them that our price stands as is, and explain the extra work and cost involved in following the regulations. After a brief overview of the basics, we advise them for their own safety to be certain that the laws will be followed if they hire one of the other companies. 

I don't worry about them.  It's really all about your sales process.  Sell to the client why you are different and what makes you a good fit.  Cheap clients will get cheap painters who will skimp in more areas than just paint.  Do good and focus on growing your company.  I would love to talk to you more about how to grow your business.  Let me know

I worry about my own business !

I've been in this industry for 40 years. What I tell potential clients is if you want to contract with someone who doesn't follow the "rules of the road." You may end up being one of his "victims". I'm sure you wont be the first or the last. Who in order to save a couple of thousands  ends up paying  10x that or more if something goes wrong, a neighbor calls the EPA or the state or local authorities and you may end up with a fine for polluting the environment with old lead paint debris, because you didnt go with a licensed, insured and EPA lead certified contractor, or most likely  if the guy cuts legal corners he's more often then not going to cut quality corners wherever he can on your building. If you like to take that kind of risk I say "best of luck."

The big problem in my area is not only are some contractors not Lead certified but are still flying under the radar as far as running legitimate businesses. Hiring full time painters and paying as subcontractors, or worse yet paying in cash. They are able to charge less per hour as they don’t have Fed/State taxes or workers comp. on employees. Vermont is not very friendly to small businesses as this only makes it tougher to compete and still pay employees and decent wage.

In Massachusetts if your operate an illegal business or even better if you are not legally in this country you are rewarded in some cities and towns.  If you are totally legal you get held to a different standard.  The answer to this problem is partially enforcement of codes and mostly the customer looking for a lower price, I can't lower my insurance or permit cost and I pay taxes and workers compensation.  The cost of a vehicle with proper registration and paying good wages and benefits it's no wonder people are having so many problems finding a quality contractor they all left the trades. I refuse to speak a different language so I can have more employees.  I reduced the size of my company and we are very careful with choosing projects and customers.

When the Customer call us, and we did find that the work has been done without license.  We let them know, and if they want the job done right, we do talk to the Homeowner and let them know that we will do the right thing.  And the day they will decided to sell their home, they will not have any surprises.

Chris,that problem has always existed unfortunately. The only recourse to dealing with an unlicensed contractor is to find out a job location he is currently working at and call your local licensing board and report the info. Sometimes they catch them and sometimes they don't depending on their resources and response time. 

We don’t deal, we work through it! It’s a process.  For many years we have been training and informing our team of the rules and the regulations.  We inform them, train them, and send them to classes for our team to be up to par in the industry.  We don’t pay attention to our competition, if we did we would be out of business!  Yes, they are everywhere and yes we all do come across them! Focus, work smart and strive to be the best.
Honesty in the long run will surpass anything.  

I agree with Michael Beaulieu.  The people that are hiring the painters who are cheating and cutting corners are looking for cheap, unprofessional work.  Yes, it can be frustrating sometimes, especially when they're down the street from you, but for the most part you're not really competing with those guys for those clients.  Focus on your strengths, your strong client relationships, your quality, knowledge, and professionalism.