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CA Issues Nearly $600K in Wage Theft Citations

Wednesday, June 5, 2019

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At the end of May, California’s Department of Industrial Relations reported that a Los Angeles-based Labor Commissioner’s Office issued citations for unpaid wages and various penalties to Universal Structural Building Corp. (Chatsworth, California) and J.H. McCormick Inc. (Burbank, California).

According to the release, the citations follow two jobs completed in the Los Angeles metro area and Ventura, California, where 62 construction workers were allegedly denied payment for multiple weeks of work.

What Happened

General contractor J.H. McCormick and subcontractor Universal signed a contract in February 2018 for Essex Hollywood, a residential- and commercial-based project. Following the project, many of Universal’s employees reported that they had failed to be compensated for their final work weeks on the job, averaging eight to 14 hours a day, five to six days a week.

Epitavi / Getty Images

At the end of May, California’s Department of Industrial Relations reported that a Los Angeles-based Labor Commissioner’s Office issued citations for unpaid wages and various penalties to Universal Structural Building Corp. and J.H. McCormick Inc.

As a response, investigators filed a mechanic’s lien—a collection tool used for construction laborers who have suffered wage theft—in December in order to secure $110,000 for 39 of the 42 workers affected by the wage theft.

After a full investigation, it was determined that Universal’s employees were owed $477,533 in unpaid wages and penalties, with an additional $49,220 for contract wages.

The citations issued to the company include:

  • $62,207 in unpaid minimum wages and $64,131 in liquidated damages for 62 employees;
  • $4,900 in unpaid overtime for 37 employees;
  • $15,950 for wage statement violations for 62 employees;
  • $330,345 in waiting time penalties owed to 2 employees; and
  • $120,400 in civil penalties, including $15,000 for misclassifying a foreman as an exempt employee.

J.H. McCormick was found jointly responsible for $68,657 of the amount under California’s wage theft law,so the Labor Commissioner’s Office has also filed a civil action with the Los Angeles Superior Court against the company to help secure funds in order to fulfill these back wages.

That law was set in motion by California Gov. Jerry Brown at the end of 2017, making general contractors accountable for lost wages and subcontractors’ unpaid wages and benefits plus interest, but not penalties or liquidated damages.

“Up-the-chain general contractors are now responsible for wage theft committed by their subcontractors on all construction projects in the state,” said California Labor Secretary Julie A. Su.

“General contractors who choose subcontractors that do not pay wages owed will pay a hefty price. The Labor Commissioner’s Office will use all the tools at its disposal to return these stolen wages – including the placement of liens on these properties which will have a hold until the labor these workers poured into these projects is paid for in full.”

Authorities had also been made aware of wage theft at Portside Ventura Harbor—another project subcontracted by Universal. In that instance, workers were told the company had no money, and that the general contractor would pay them. Again, investigators filed another mechanic’s lien against Universal in order to secure $26,464 in wages for the 20 workers. However, that general contractor was not held responsible, since the contract began prior to Jan. 1, 2018.

   

Tagged categories: Citations; Commercial contractors; Contractors; Ethics; Good Technical Practice; Labor; Laws and litigation; NA; North America; PaintSquare App - Commercial; Residential contractors; Subcontractors

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