California Labor Commissioner Issues $1.9 Million Citation to Contractor for Wage Theft

Continuing its aggressive enforcement of California wage and hour laws, the Labor Commission issued wage theft citations of $1.9 million to Fullerton Pacific Interiors, Inc. for failing to pay minimum wage and overtime and failing to provide rest periods to 472 workers on 26 construction projects throughout Southern California.

Fullerton Pacific Interiors provided drywall work at commercial projects throughout southern California. The company paid its taping and drywall installation crew a flat daily rate. Thus, regardless of the number of hours actually worked, employees received the same daily pay. Workers were permitted the legally required 30-minute meal period, but did not receive mandated rest breaks. On July 9, 2018, the Labor Commissioner also determined that the company failed to provide employees accurate itemized wage statements as required by law. The $1,964,679 citation includes $1,892,279 payable to the workers for owed wages, liquidated damages and waiting time penalties, as well as $72,400 in civil penalties.

Since being appointed Labor Commissioner by Governor Brown in 2011, Julie A. Sue has been very public about her intention to dramatically increase enforcement of California’s Wage Theft Protection Act that went into effect in January 2012. “Wage theft” is defined as any instance when an employer fails to provide an employee full pay for all hours worked, including paying less than minimum wage, failing to provide overtime pay, requiring workers to perform off-the-clock work, and failing to provide meal and rest breaks. The Act and subsequent legislation have given the Labor Commissioner more legal tools and financial resources to enforce California’s myriad wage and hour laws. Under Su’s leadership, the California Division of Labor Standards Enforcement has focused its enforcement efforts on low wage workers, particularly those in the construction industry.

Takeaway for Employers:

This citation should be a wake-up call for California employers that failing to comply with California wage and hour laws can be extremely costly. These laws are notoriously complex and counter-intuitive. To ensure compliance, an employer may wish to conduct a self-audit under the direction of legal counsel.