California Contractor Fined $1.5 Million for Failing to Pay Workers

“We believe the employer intentionally underpaid its workers," said California State Labor Commissioner Angela Bradstreet. "This not only robs those employees of the money they earned, it also hurts other contractors who chose to do the right thing and comply with the law."

California State Labor Commissioner Angela Bradstreet recently ordered Russell/Thompson Inc., a framing contractor, to pay $1.3 million in wages and $200,000 in fines for failure to pay 74 employees the proper wage for their work at Tercero Housing Project at the University of California, Davis. Bradstreet issued a civil wage and penalty assessment in an effort to collect the money owed to the workers.

“Our investigation uncovered serious wage violations in this case,” Bradstreet said. “We believe the employer intentionally underpaid its workers. This not only robs those employees of the money they earned, it also hurts other contractors who chose to do the right thing and comply with the law. I believe the action my office is taking against Russell/Thompson and 84 Lumber Inc. will serve as a deterrent to any company that is thinking about undermining its employees or the state’s wage laws.”

An investigation by the California Department of Industrial Relations (DIR) Division of Labor Standards Enforcement uncovered evidence which established that Russell/Thompson willfully violated the law by failing to pay proper prevailing wages on a public works project at UC Davis. Russell/Thompson failed to pay overtime and misclassified workers by identifying them as lower paying positions rather than higher rate skilled positions that they worked. It was also uncovered that Russell/Thompson falsified payroll records.

UC Davis hired Brown Construction Inc. as the general contractor, which in turn contracted with 84 Lumber Inc. to perform the framing work on the Tercero Project. 84 Lumber Inc. subcontracted the job to Russell/Thompson, which actually performed the framing work. The Labor Commissioner also served a civil wage and penalty assessment against Brown Construction Inc. and 84 Lumber Inc.

“Prime contractors cannot plead ignorance when their subcontractors fail to follow California’s labor law,” said DIR Director John C. Duncan. “The state holds seminars and outreach events to make sure contractors across California are aware of the specific requirements involving public works projects. These requirements are designed to ensure that public money is being spent properly. Our enforcement efforts are intended to help fight California’s underground economy and help compliant businesses compete fairly.”

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