Contractor Hired by San Diego Firm to Pay $1.1M for Wage Theft

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State labor regulators secured more than $1.1 million in wages and penalties from the settlement of a case involving a Long Beach construction project, it was announced Monday.

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Labor officials alleged that Newport Beach-based Champion Construction Inc., a drywall and framing contractor hired by San Diego general contractor TB Penick for the Browning High School construction project, maintained false payroll records over a six-month period to cover up wage theft affecting 103 workers who were not paid wage and fringe benefits.

California’s wage laws hold general contractor TB Penick jointly liable for the violations of its subcontractor Champion, state Labor Commissioner Julie Su said.

“Prevailing wages create a level playing field for all contractors bidding on public construction projects,” Su said. “This case clearly demonstrates that general contractors who select contractors that don’t play by the rules will pay a heavy price. Under the law, they are responsible for the wage theft of their subcontractors.”

The Labor Commissioner’s Office opened its investigation after receiving a report from the Carpenters Contractors Cooperation Committee in March 2016 alleging public works violations. The investigation included interviews with more than 30 workers, site visits and an audit of pay records for the dozens of workers involved in the project, Su said.

The investigation led to civil wage and penalty assessments of $1,735,784. Penick entered into a settlement agreement to pay $1,187,078 of the penalties and wages owed. The group of 103 workers received $744,533, or an average of $7,228 each last week when the employer delivered its final payment, according to Su. The settlement also included $8,080 for required apprenticeship training funds and $434,465 in civil penalties.

Subcontractor Champion was also found at fault for wage theft violations affecting 47 workers on a project in El Segundo last year. Champion’s state contractor license expired in July 2016 and public works contractor registration expired last year, the labor commissioner said.

City News Service

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