CA Labor Commish: $1M in Fines, Wage Returns for Unscrupulous Pair “Should Serve as a Warning to Other Contractors Who Fail to Abide by Our Laws”
California Labor Commissioner Julie A. Su has wrapped up two separate investigations of contractors on public work projects who failed to properly pay their employees. The returned wages and fines between the two investigations total over $1 million.
Among the many violations were failure to pay prevailing wages, failure to pay into fringe benefit programs, and failure to pay for weekend work and overtime.
In the first case, contractor FTR International was fined $185,725 for labor law violations and ordered to pay $401,041 in back wages for work done on the Los Angeles Union Station Platform 7 project. According to the Department of Industrial Relations release:
FTR intentionally underpaid its workers the correct prevailing wages, failed to pay daily overtime, failed to make employer payments into its fringe benefit programs, failed to pay Saturday and Sunday premium rates and did not pay into a DIR-approved training program for the California Apprenticeship Council.
“The action against FTR should serve as a warning to other contractors who fail to abide by our laws,” said Commissioner Su. “These enforcement actions are also a message to law-abiding contractors that we are here to help you by going after the scofflaws.”
The second case revolved around Wirtz Quality Installations, Inc. which worked on the Palomar Pomerado Health Systems public works project in Escondido. Wirtz was ordered to pay $102,292.47 in back wages and fines of $402,450 for labor violations:
The San Diego-based stone and tile contractor failed to pay 55 employees the proper wage for their work on the Palomar Medical Center West Project. Palomar Pomerado Health Systems hired Wirtz as the general contractor for this project.
An investigation by the Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner’s office, uncovered evidence that Wirtz willfully violated the law by failing to pay proper prevailing wages on the public works project. Specifically, Wirtz charged workers over 9 percent in various fees for payments made into a fringe benefit plan for supplemental unemployment insurance. The fringe benefit component of a workers’ prevailing wage for tile workers in San Diego comprises approximately 30 percent of the total prevailing wage rate. This practice caused a significant underpayment of the prevailing wages for Wirtz’s workers. Wirtz also failed to pay the appropriate overtime.
In the 2011-2012 fiscal year the Labor Commissioner’s office collected nearly $10 million in back wages for workers. Between July and November of this year alone they collected $3.7 million:
“Wage theft in any manner will not be tolerated,” said Commissioner Su. “Construction workers work long hours and perform invaluable work building the infrastructure in our communities. My office is here to ensure that all public works contractors pay fringe benefit packages as required by law. Charging fees for these benefits is an unlawful end-run around prevailing wage laws.”