IR #2010-11
May 5, 2010

Krisann Chasarik
Dean Fryer


CA Labor Commissioner Files Suit Against Out-of-State Contractors for Wage Theft

San Francisco—State Labor Commissioner Angela Bradstreet is suing a Florida general contractor and its subcontractors for wage violations involving construction workers at two apartment renovation projects in Pacifica.  The civil lawsuit was filed in San Mateo County Superior Court today and seeks nearly $400,000.

The California Department of Industrial Relations (DIR), Division of Labor Standards Enforcement (DLSE), began its investigation after the company’s employees filed wage claims.  The investigation found that the subcontractors failed to pay over $121,000 in minimum wage and overtime to 30 workers. The lawsuit also seeks penalties, liquidated damages and attorney fees totaling more than $275,000.

The defendants named in the lawsuit include general contractor ZMG Construction and subcontractors Lake’s Construction and EQ Master Construction.  All three companies are based in Florida, and the two subcontractors are not licensed in California. 

“Out of state contractors need to understand that they cannot come to California, violate state law and take advantage of California’s employees,” said Labor Commissioner Angela Bradstreet.  “California workers are the backbone of our economy and this case is our latest court battle in support of their rights.”

ZMG Construction began work on remodeling projects at an apartment complex at 380 Esplanade Avenue and a second complex at 365 Talbot Avenue in early 2009.  Under Labor Code §2750.5, because ZMG Construction’s subcontractors were unlicensed in the state, ZMG Construction is legally considered to be an employer of the workers at the sites and was included as a defendant in the lawsuit.

“This case highlights the importance of ensuring the companies you hire and work with are following all state labor regulations, “ said DIR Director John C. Duncan. “Businesses that refuse to play by the rules and are a part of the underground economy deprive the state and legitimate businesses of millions of dollars each year.   We won’t hesitate to take action when the laws are not being followed or when workers are being mistreated.”

The DLSE has a successful record of recovering wages for California workers. The division won judgments and reached settlements totaling more than $17 million dollars last year alone.

The California Department of Industrial Relations’ Division of Labor Standards Enforcement adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.  To learn more about the functions of the Division of Labor Standards Enforcement, visit our Web site at  Employees with work-related questions or complaints may call the California Workers’ Information Hotline at (866) 924-9757.

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