California Labor Commissioner’s Office cites the Ritz-Carlton and subcontractors more than $2 million for misclassifying workers as independent contractors
San Francisco— The California Labor Commissioner’s Office (LCO) has cited the Ritz-Carlton Hotel Company LLC and three janitorial contractors more than $2 million for misclassifying 155 janitors as independent contractors at its Half Moon Bay hotel. The citations include $1.9 million in wages and penalties payable to the affected workers.
An investigation by the LCO’s Bureau of Field Enforcement (BOFE) found that the out-of-state contractors misclassified the janitors as independent contractors and denied them basic legal protections, including minimum wage, overtime, paid sick leave, and workers’ compensation benefits. The janitorial industry has long been known for exploitative subcontracting practices that undermine both worker protections and honest competition.
What California Labor Commissioner Lilia García-Brower said: “We’ve seen this pattern before, employers hire or contract with out-of-state janitorial companies, thinking they can sidestep California labor laws. The use of subcontracting to evade legal obligations is a long-standing practice in this industry and we will pursue such cases aggressively, especially when they try to hide behind subcontractors to gain an unfair business advantage by denying workers the protections they are entitled to.”
A study from the UCLA Labor Center found that subcontracted janitors in California are more likely to earn lower wages and face labor violations than those directly employed. To address these systemic issues, California established the janitorial registration program and strengthened joint employer accountability laws to better protect vulnerable workers in the sector.
From July 2021 through January 2024, the Ritz-Carlton contracted with a Georgia-based company, Empire Unistar Management Inc., to handle janitorial services. Empire Unistar Management, in turn, subcontracted the work to two other out-of-state companies, TK Service of Virginia and later JM Spa Group of Florida. None of these janitorial contractors were registered with the state’s mandated janitorial registration program.
The investigation was referred to the Labor Commissioner’s Office by the San Mateo County District Attorney’s Office, a participant in the LCO’s Workers’ Rights Enforcement Grant Program. The referral followed a worker report to Coastside Hope, a local nonprofit human services agency that helped facilitate interviews and supported affected workers. The District Attorney’s Office also participated in the interviews.
California law makes clear that companies cannot outsource responsibility for worker protections. If TK Service and JM Spa fail to pay the wage assessments and penalties, under Labor Code sections 2810.3 and 238.5, both the Ritz-Carlton Hotel Company LLC and Empire Unistar Management, Inc. will be jointly liable for a total of $746,001.
Employers or contractors cited by LCO have the right to appeal any citation and notification of penalty by filing an appeal with LCO within 15 business days after the service of the citation.
Background on the Janitorial Registration Program
Established under the Property Service Workers Protection Act, the janitorial registration program requires janitorial employers in California to register annually with LCO. Employers must also provide in-person sexual violence and harassment prevention training every two years to both supervisory and non-supervisory staff. These measures aim to protect workers, raise labor standards, and promote fair competition in the janitorial industry.
About the Bureau of Field Enforcement
The Bureau of Field Enforcement (BOFE), a branch of the Division of Labor Standards Enforcement (California Labor Commissioner’s Office) within the Department of Industrial Relations, enforces key labor laws through on-site investigations and strategic enforcement actions.
BOFE targets industries with high rates of labor violations, conducting workplace inspections to uncover wage theft, child labor violations, failure to carry workers’ compensation insurance, and other unlawful employment practices. Its work helps ensure fair treatment for workers while promoting a level playing field for responsible employers.
BOFE has issued almost 2,000 citations against employers for labor law violations between January 2022 and June 2025, recovering over $42.6 million of stolen wages, penalties, and interest on behalf of workers. BOFE has also issued more than 2,300 notices to discontinue labor law violations in the past year, and corrected violations that collectively impacted over 23,000 California workers. To meet growing enforcement demands and expand outreach, BOFE has also increased staffing across key regions, strengthening its presence in communities most impacted by labor violations.
Workers who have questions about labor laws enforced by the LCO can call 1-833-LCO-INFO (833-526-4636) between the hours of 8:00 a.m. to 5:00 p.m. Monday through Friday, services available in Spanish and other languages.
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Employers with Questions on Requirements May Contact: MakeItFair@dir.ca.gov
Media Contact: Communications@dir.ca.gov, (510) 286-1161