Lawsuit shows need for AB 1701

Aug. 31, 2017  While the California Legislature debates a bill to hold general contractors accountable for making sure that their workers get paid, the state Labor Commissioner’s Office has gone to court to recover wages stolen from 249 construction workers and to impose penalties on the subcontractor who officials say ripped them off.

The agency filed the $6.3 million lawsuit July 18 in Los Angeles Superior Court against Calcrete Construction, Inc., of Glendale. The suit charges the company with multiple wage theft and employee misclassification violations. It seeks to recover $2.6 million in lost wages and damages for the workers and $3.7 million in penalties against the employer.

Robbie Hunter, president of the State Building and Construction Trades Council, said the court case highlights the need for the Legislature to pass Assembly Bill 1701. The legislation would hold general contractors accountable if their subcontractors fail to pay their workers.

“This case in all probability would not have happened had the general contractors had some responsibility for the lost wages,” Hunter said. “A general contractor should be responsible for the subcontractor they hired on their project that they’re going to profit from, if the subcontractor walks away from workers, as they did on this case. It’s been over a year now and none of these workers have been paid.”

Calcrete acted as a subcontractor on 18 separate projects in Los Angeles and Orange counties that were the subject of the lawsuit, as well as the general contractor on one additional project, according to the Carpenters/Contractors Cooperation Committee, which referred the case to the Labor Commissioner’s Office.

None of the general contractors or real estate developers are named in the complaint.

The suit says that the violations occurred over a two-year period from 2014 through 2016. It seeks to recover $352,000 in lost overtime wages, more than $1.2 million in waiting time penalties and an additional $1 million for unpaid sick leave and damages for the workers.

It also asks for $3.7 million in penalties against the company, payable to the state. The bulk of the penalties would be for the intentional misclassification of 175 of the workers as “independent contractors” rather than as hourly employees.

The Labor Commissioner’s press release said that Calcrete “forced its workers under threat of termination to sign contracts stating that they were independent contractors.”

“It is illegal for employers to use subcontractors to distance themselves from the obligation to pay workers, and we will use every tool to dissuade employers from this scheme,” Labor Commissioner Julie A. Su said in a Department of Industrial Relations press release. “This lawsuit aims to recover the money these misclassified workers should have been paid after years of wage theft.”


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