IR #2010-05
March 10, 2010

Erika Monterroza
Krisann Chasarik


California's Labor Commissioner Sues Luxury Hotel for Failure to Pay Employees

San Luis Obispo – State Labor Commissioner Angela Bradstreet today filed a civil lawsuit against Carlton Hotel Investments, LLC that seeks to recover more than $100,000 in lost wages and penalties.  The hotel is accused of six labor code violations including failure to pay wages when due, failure to pay minimum wage and failure to pay overtime. As of January, employees filed at least 18 wage claims against the hotel and asked the court to enjoin the hotel from continuing to operate without paying wages on designated pay days.

The California Department of Industrial Relations (DIR), Division of Labor Standards Enforcement (DLSE) launched an initial investigation into The Carlton Hotel in October of 2009 after receiving an anonymous complaint.  The investigation found that the workers’ paychecks were being delayed.  The state issued a Notice to Discontinue that stated all wages are due and payable on the employer-designated regular pay days.  Additional violations were uncovered during a re-investigation in February.  The Carlton Hotel was not meeting its payroll obligation each pay period and some paychecks were nearly two months overdue.

“The Carlton Hotel lawsuit is just the latest battle in our vigorous fight against the underground economy and our pursuit against employers who violate state law by failing to pay their employees,” said DIR Director John C. Duncan.  “These types of lawsuits help us level the playing field for compliant employers and give them a fair, competitive opportunity to do business in California.”

Carlton Hotel Investments, LLC currently has 13 recorded judgments against it for more than $135,000 including money owed to the California Franchise Tax Board and Employment Development Department.  The LLC’s managing member, David Weyrich, recently surrendered four properties to foreclosure that had been collateral for more than $17 million in business loans. The Carlton Hotel is in default although not in foreclosure.

“We will not tolerate an employer who violates the law and places its financial difficulties on the backs of its employees,’ said Angela Bradstreet, Labor Commissioner.  “The Carlton Hotel has a financial obligation to its employees, many who are low-wage earners.  For them, not being paid in a timely manner is having a major impact.”

The DLSE has a record of success in recouping unpaid wages for California employees.  Last year alone, the division won judgments and reached settlements totaling more than $17 million.

The DLSE adjudicates wage claims, investigates discrimination and public works complains, and enforces state labor law. Employers who want to learn more about the division, workers’ comp or other state labor laws can visit our Web site at   Employees with work-related questions or complaints can call the California Workers’ Information Hotline at (866) 924-9757. 

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