Wage Theft = DIR $7.2 Million Fine

NEWS RELEASE
Release Number: 2021-108
Date: October 25, 2021
California Labor Commissioner Cites Drywall Company more than $7.2 Million for Wage Theft Violations

Fresno—The Labor Commissioner’s Office has cited NGC Construction, Inc., $7,209,872 for wage theft violations affecting 724 workers. An investigation found that the Visalia-based drywall company paid workers a fixed amount per project known as piece-rate. The workers, who put up drywall, provided painting services and stucco application, were not paid for non-productive time, resulting in workers earning less than minimum wage and less than the contract wages promised by the employer. Some of the company’s truck drivers were also not paid overtime.

“The law is clear: Workers earning piece rate must be paid for their rest periods and other non-productive time while under the control of the employer,” said Labor Commissioner Lilia García-Brower. “The law ensures workers can take their required rest breaks and are paid for travel time from one worksite to another.”

The Labor Commissioner’s Bureau of Field Enforcement (BOFE) opened its investigation into NGC Construction in September 2018 as part of a Labor Enforcement Task Force onsite inspection prompted by a worker’s Report of Labor Law Violation. The company sent workers, who usually worked eight-hour shifts, to commercial and residential construction sites throughout the Central Valley from Arvin in the south to Modesto in the north and Paso Robles in the west.

An audit of the company’s payroll from July 22, 2016 to July 22, 2019 confirmed the findings that employees were not paid for all of their work.

The citations issued total $4,858,072 payable to workers in unpaid wages, damages and premiums including:

  1. $281,237 for minimum wage violations affecting 718 employees plus $74,693 interest
  2. $355,931 in liquidated damages for those minimum wage violations affecting 718 employees
  3. $289,364 for non-payment of contract wages affecting 722 employees
  4. $44,280 for overtime affecting 43 employees
  5. $355,931 in liquidated damages affecting 718 employees
  6. $1,001,400 for itemized wage statement damages affecting 720 employees
  7. $2,811,006.12 for waiting time penalties affecting 568 employees
  8. $161 for meal period premium violations affecting 3 employees.
The Labor Commissioner cited NGC Construction Inc. along with Julio C. Mendoza, president and CEO of the corporation, for total of $2,351,800, which included violations for failing to pay minimum wages, overtime pay, meal period premiums and failure to issue proper itemized wage statements and associated civil penalties.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid minimum wages plus interest.

Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime and other labor law violations, and to calculate payments owed and penalties due. Civil penalties collected are transferred to the State’s General Fund as required by law.

The Labor Enforcement Task Force, under the direction of the Department of Industrial Relations, is a coalition of California State government enforcement agencies, including Cal/OSHA, the Labor Commissioner’s Office, the Employment Development Department and the Contractors State License Board, that work together and in partnership with local agencies to combat the underground economy. In this joint effort, information and resources are shared to ensure employees are paid properly and have safe work conditions and honest, law-abiding businesses have the opportunity for healthy competition.

In 2016, AB 1513 updated piece-rate compensation requirements requiring employers to compensate piece-rate workers for mandated rest and recovery periods and other work time that does not generate piece-rate earnings, including related pay stub requirements.

The Department of Industrial Relations’ Division of Labor Standards Enforcement (the California Labor Commissioner’s Office) combats wage theft and unfair competition by investigating allegations of illegal and unfair business practices.

The Labor Commissioner’s Office in 2020 launched an interdisciplinary outreach campaign, “Reaching Every Californian.” The campaign amplifies basic protections and builds pathways to impacted populations so workers and employers understand legal protections and obligations, and the Labor Commissioner’s enforcement procedures. Californians can follow the Labor Commissioner on Facebook and Twitter.

Contact: Paola Laverde / Peter Melton, Communications@dir.ca.gov, (510) 286-1161

The California Department of Industrial Relations, established in 1927, protects and improves the health, safety, and economic well-being of over 18 million wage earners, and helps their employers comply with state labor laws. DIR is housed within the Labor & Workforce Development Agency

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