California Labor Commissioner cites construction company $1.7 million for wage theft violations

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The Labor Commissioner’s Office (LCO) has cited JPI Construction $1.7 million for wage theft violations affecting 265 workers. An investigation found that the San Diego-based company failed to pay workers properly on commercial and residential construction projects, resulting in minimum wage and overtime violations.

The California State Department of Industrial Relations said  said in an Oct. 18 statement that the LCO had opened an investigation in March 2019 after receiving a report of labor law violations indicating JPI Construction workers were experiencing wage theft because they were only paid for 40 hours a week despite consistently working overtime on mixed-use construction projects in the San Diego and Los Angeles areas.

The investigation found that from April 2018 to March 2019, employees doing framing and sheetrock work were paid a flat rate that did not include overtime. This resulted in frequent minimum wage and overtime violations. Investigators interviewed workers and audited the employer’s payroll records to identify violations. The audit uncovered illegally modified timesheets that removed record of the overtime hours the workers should have been paid.

“Paying workers a flat rate is not an excuse to deny them the overtime hours they earned and should be paid,” said California Labor Commissioner Lilia García-Brower. “The laws in California protect workers. It is critical that workers keep track of their hours and pay so they can defend themselves.”

The citations total $1,771,133, with $1,627,933 payable to the workers. The amount owed to workers includes minimum wage and overtime, waiting time penalties for failure to provide full pay on time, and liquidated damages and interest payable to workers for failure to pay minimum wage for all hours worked. The citations include $143,200 in civil penalties payable to the state.

The owners have appealed the citations. Under the appeal procedure, the Labor Commissioner’s Office will hold a hearing before a hearing officer who will affirm, modify or dismiss the citations.

The labor law violations were reported by Carpenters/Contractors Cooperation Committee, a non-profit labor-management organization.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid minimum wages plus interest. Waiting time penalties are imposed when the employer intentionally fails to pay all wages due to the employee at the time of separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days, the statement said.

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