FOR IMMEDIATE RELEASE
IR #2012-48
December 17, 2012

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California Labor Commissioner fines public works construction contractors more than $1 million for labor law violations

Los Angeles—In two separate investigations in the Southern California area, California Labor Commissioner Julie A. Su has issued wage and penalty assessments totaling over $1 million.

“The Division of Labor Standards Enforcement plays a critical role in enforcing the prevailing wage laws and it is DLSE’s mission to ensure all contractors compete on a fair playing field in the public works arena,” said Department of Industrial Relations Director Christine Baker. The Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner's office, is a division of DIR.

In the first case, Commissioner Su ordered FTR International, Inc. (FTR) to pay $401,041 in wages and $185,725 in fines for labor law violations committed on the Los Angeles Union Station Platform 7 project. Southern California Regional Rail Authority hired FTR, a general contractor with offices in Irvine and Los Angeles, to build the train station platform. A civil wage and penalty assessment was also issued for this project.

FTR intentionally underpaid its workers the correct prevailing wages, failed to pay daily overtime, failed to make employer payments into its fringe benefit programs, failed to pay Saturday and Sunday premium rates and did not pay into a DIR-approved training program for the California Apprenticeship Council.  

“The action against FTR should serve as a warning to other contractors who fail to abide by our laws,” said Commissioner Su. “These enforcement actions are also a message to law-abiding contractors that we are here to help you by going after the scofflaws."

In the second case, the Labor Commissioner ordered Wirtz Quality Installations, Inc. (Wirtz) to pay $102,292.47 in wages and $402,450 in fines for labor law violations committed on a Palomar Pomerado Health Systems public works project in Escondido. The Labor Commissioner issued a civil wage and penalty assessment in an effort to collect all wages owed to workers.

The San Diego-based stone and tile contractor failed to pay 55 employees the proper wage for their work on the Palomar Medical Center West Project. Palomar Pomerado Health Systems hired Wirtz as the general contractor for this project. 

An investigation by the Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner's office, uncovered evidence that Wirtz willfully violated the law by failing to pay proper prevailing wages on the public works project. Specifically, Wirtz charged workers over 9 percent in various fees for payments made into a fringe benefit plan for supplemental unemployment insurance. The fringe benefit component of a workers’ prevailing wage for tile workers in San Diego comprises approximately 30 percent of the total prevailing wage rate. This practice caused a significant underpayment of the prevailing wages for Wirtz’s workers. Wirtz also failed to pay the appropriate overtime. 

“Wage theft in any manner will not be tolerated,” said Commissioner Su. “Construction workers work long hours and perform invaluable work building the infrastructure in our communities. My office is here to ensure that all public works contractors pay fringe benefit packages as required by law. Charging fees for these benefits is an unlawful end-run around prevailing wage laws.”  

The Labor Commissioner collected nearly $10 million in wages owed to workers on public works jobs in the 2011-12 fiscal year, and has collected over $3.7 million between July and November of this year. In 2010, the Labor Commissioner collected $5.9 million in wages, which was the previous highest year.  This increase in wage collections signals the Labor Commissioner's priority to get wages back into workers' pockets.

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. Additional information on labor laws and work-related topics are available on our website, as well as on Facebook and Twitter.
       
Employees with work-related questions or complaints may call the California Workers’ Information Hotline at (866) 924-9757 for recorded information on a variety of work related topics.

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