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$870,000 Wage Theft Settlement in California Puts Law-Breaking Contractor Out of Business
The importance of appointing workers’ rights advocates to government positions that enforce wage and safety laws is shining through in California where California Labor Commissioner Julie A. Su announced a settlement against a contractor who refused to pay the prevailing wage on a state-funded project.
Tadros & Youssef Construction, the prime contractor for construction in the Arcadia Unified School District, has agreed to pay $877,876.64 in back wages and penalties for failure to pay prevailing wages, overtime wages, and related labor violations.
“This public works project is an investment the taxpayers of California have made in their educational system, and when contractors entrusted to build out that vision abuse the public’s trust, we will not stand by and let that go on,” said DIR Director Christine Baker. “Public works requirements such as prevailing wage exist to ensure that public money is spent properly, and that the highest possible value is received from public works projects.”
“California workers must be paid prevailing wages for all work they perform on public works projects. Prevailing wage protections exist for the benefit of the men and women who build schools in our communities and for the honest employers who deserve a level playing field,” said Labor Commissioner Julie A. Su. “We hope this settlement sends a strong message that all employers who are paying workers less than they are owed are operating illegally, and meaningful enforcement that gets wages owed into workers’ pockets is an absolute priority of the Labor Commissioner’s office.”
The prevailing wage on state-funded construction projects is important because low-road contractors often low-ball their bids in order to gain contracts and then attempt to make up the difference on the backs of workers:
An investigation was launched by the California Department of Industrial Relations’ (DIR) Division of Labor Standards Enforcement (also referred to as the Labor Commissioner’s Office) when a worker filed a complaint against Tadros & Youssef Construction alleging that the contractor did not pay any wages for work performed on the project at Highland Oaks Elementary School in Arcadia in 2009 and 2010. The worker had installed all stainless steel and wood doors throughout the school, and was promised to be paid by piece rate – work that is paid according to the number of units completed.
“Piece rate payment should never be used as an end-run around minimum wage and prevailing wage laws,” added Julie A. Su. “Workers are entitled to at least the hourly floor for every hour worked.”
In the ensuing investigation, nine other workers who were interviewed alleged they were not paid prevailing wage, and that overtime rates and hours were not paid as well. The settlement reached represents the full amount of the payment requested by the Labor Commissioner, $877,876.64.
The workers split the wages and liquidated damages, while the prevailing wage penalties will be allocated as mandated by Labor Code Section 2698 for enforcement of labor laws and education of employers and employees about their rights and responsibilities.
Tadros & Youssef Construction, based out of Upland, California, is no longer in business.
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