California Employees Paid Less than $2 per Hour Results in $2.2 Million Wage Theft Fine

Aug 7 2015 - Workers' Compensation - HRWatchdog

The California Labor Commissioner recently issued more than $2.2 million in citations against three residential care facilities in San Diego County for egregious wage theft violations after an investigation found that caregivers were working 24-hour shifts, six to seven days a week, for $1.25 to $1.80 per hour.

The citations included minimum wage, overtime, meal period and workers’ compensation violations. The residential care facilities must pay $1,332,129 for underpaid wages and premiums, $716,846 for liquidated damages and $171,305 in civil penalties.

The Labor Commissioner has made it a top priority to address “wage theft.”  Generally, “wage theft” is a phrase used to refer to infractions of the California Labor Code involving the payment of wages to workers.

“Employers who deny their workers the pay they are rightfully owed will be held accountable to remedy the issue and restore wages due,” said Christine Baker, Director of the Department of Industrial Relations (DIR).

The care facilities in this matter employed caregivers for elderly residents who suffered from advanced stage dementia or Alzheimer’s. Although the caregivers worked 24-hour shifts, six to seven days a week, they were only paid between $900 and $1,300 each month in cash.

In addition, while operating the facilities for eight years, the employer did not report wages to the proper state, federal and local agencies or have workers’ compensation coverage.

Interestingly, it wasn’t just the business entity that was cited for the violations.  In this instance, the “Managing Member” was also cited as an individual “because he caused the violations through his daily control of the facilities’ operations.”

While the care facilities closed before the case reached a conclusion, they reopened under a new name with a daughter of the original owners named as the owner and sole proprietor. The Labor Commissioner, Julie Su, indicated that DIR is holding individuals who engage in wage theft responsible so that they “will have a difficult time avoiding liability to workers.”

The Labor Commissioner’s Office inspects workplaces for wage and hour violations, adjudicates wage claims, enforces prevailing wage rates and apprenticeship standards in public works projects, investigates retaliation complaints, issues licenses and registrations for businesses and educates the public on labor laws.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Compliance with California’s increasingly complex labor laws can be tough.  For more information on Pay and Scheduling and other topics, please visit HRCalifornia’s HR Library. Not a member? See how HRCalifornia can help you.

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