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IR #2013-14
March 14, 2013

Erika Monterroza
Peter Melton
(510) 286-1161

Twitter @CA_DIR

Labor Commissioner cites hospital chain more than $7 million for wage violations

Los Angeles—California Labor Commissioner Julie A. Su has cited a Los Angeles-based hospital chain more than $7 million for non-payment of wages and issuing checks without sufficient funds.

Citations issued to Pacific Health Corporation include $524,300 for late payment and payment of wages with non-sufficient funds (NSF) checks. Pacific Health Corporation oversees Los Angeles Metropolitan Medical Center, Newport Specialty Hospital, Bellflower Medical Center, and Anaheim General Hospital.

“Employers have an obligation to pay workers the wages they’ve earned,” said California Department of Industrial Relations Director Christine Baker. The Labor Commissioner’s Office is a division of DIR. “Forcing employees to wait for payment, or depriving them of promised benefits, are illegal acts and cause unacceptable hardship.”

“Workers depend on the timely payment of their hard-earned wages for the basic necessities of life. When paychecks are returned marked ‘insufficient funds,’ it is a fundamental breach of the promise of a just day’s pay for a hard day’s work,” said California Labor Commissioner Julie A. Su. “My office will step into that breach and make sure California's workers get the money they’ve earned in their pockets.”

The citations also include $6,537,000 for failing to provide complete and accurate itemized wage statements to employees. “We also want the message to be loud and clear—cheating workers out of wages will be costly,” continued Labor Commissioner Su. The investigation began when an anonymous caller informed the Labor Commissioner’s Office that Bellflower Medical Center had issued NSF checks to employees in September 2012. An inspection revealed that Pacific Health Corporation was holding payments days past the payday in violation of California law. Some Pacific locations offered incentives for the employees to pick up their paychecks at a later date.

The Labor Commissioner’s Office informed Bellflower Medical Center that continued violations would lead to civil penalties, starting with the payroll due date of Sept. 21, 2012. There were no complaints in the following months, and workers contacted by the Labor Commissioner’s Office confirmed they had received their paychecks. But in February 2013, DLSE received additional complaints from employees of delayed wages and bounced checks.

After reviewing bank statements and payroll records, DLSE found that premiums for employment benefits were deducted from employee paychecks but were never paid by Pacific Health Corporation, resulting in cancelled coverage.

The Labor Commissioner’s Office has informed representatives for the hospitals that they must make timely payment of wages with sufficient funds in the payroll account, and make payment of employee benefits to reinstate loss of coverage.

The California Labor Commissioner’s Office, also known as Division of Labor Standards Enforcement (DLSE), adjudicates wage claims, investigates discrimination and public works complaints, and enforces state labor law and Industrial Welfare Commission wage orders. Information on the functions of the California Labor Commissioner is available on the DIR website as well as on Facebook and Twitter.

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