Employers Jailed for ‘Unconscionable’ Failure to Pay Court-Ordered Back Wages
Cleaners are among the poorest of the poor — hard to tell how their employers skimmed another $3.5 million off them. I don’t seem to see this in the news, but congrats to Hilda L. Solis, Secretary of Labour.. Hat Tip to the BLR newsletter.
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December 30, 2009
Employers Jailed for ‘Unconscionable’ Failure
to Pay Court-Ordered Back Wages
The owners of a residential cleaning service were taken into custody and later released after failing to comply with a court order directing payment of $3.5 million in back wages, plus interest, fines, and liquidated damages, to at least 385 workers.
“It is unconscionable that an employer would continue to disregard the obligation to pay vulnerable workers, even after being ordered to do so by a federal judge,” said Secretary of Labor Hilda L. Solis.
The owners of Southern California Maid Service and Carpet Cleaning Inc. were taken into custody Friday, October 30, and released Tuesday evening, November 3, after appearing before the judge and agreeing to start making payments.
The court sided with the U.S. Department of Labor in finding that the company had wrongly classified its home and carpet cleaners as independent contractors and failed to pay them the federally required minimum wage or overtime for hours worked over 40 per week.
The court awarded back wages to the workers on August 21, 2007, following an investigation by the Labor Department’s Wage and Hour Division. Judge The court also ordered payment of more than $1 million in liquidated damages for violations of the federal Fair Labor Standards Act (FLSA).
The Labor Department filed civil contempt charges for continued failure to comply with the order. In April 2009, the court ordered daily fines against the company of $2,000, plus an additional $200 per day each from the company owners.
The district office of DOL’s Wage and Hour Division learned of the employer’s practices through its participation in the Employment Education and Outreach (EMPLEO) partnership. EMPLEO is an alliance of organizations and government agencies that assist Spanish-speaking workers and employers with work-related concerns. Callers to a toll-free helpline, 877-55-AYUDA (552-9832), are referred to EMPLEO partner organizations for assistance.
The FLSA requires that covered employees be paid at least the federal minimum wage and receive overtime at one and one-half times their regular rates of pay for hours worked beyond 40 per week. Employers must also maintain accurate time and payroll records. Solis v. Southern California Maid Service and Carpet Cleaning Inc., Case Number: CV 06-3903 AG (MANx), U.S. District Court for the Central District of California.
Where’s the weapons charge? as the employer obviously held a gun to their employees heads to force them to work under those terms.
I do some work as an independent contractor. Hopefully my clients won’t get dragged into court and fined $1M.
Ah, there’s more here.
“Following an investigation by the Labor Department, the U.S. District Court in Santa Ana determined that [Sergio Maldonado and Lorenza Rubio’s] company, Southern California Maid Service and Carpet Cleaning Inc., had wrongly classified its home and carpet cleaners as independent contractors, Amaden said. The company failed to pay workers the federally required minimum wage or overtime.”
Fraud, toward both the regulators and the employees.
Noni
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Fraud and theft.
There are plenty of rules and guidelines on who is an employee.
This is actually quite common with employers of illegals, and the feds have largely ignored these cases because most of the illegals have committed document fraud and/or identity theft.
The cases that are prosecuted tend to let loose a bliazzard of press releases though.
Of course it generates a wave of press releases because we do not have enough courts and prosecutors to prosecute everyone in these cases. Prosecutors proceed to make examples to deter others.
Classifying regular workers as contractors has been a growing problem, as it creates a large class of people that also do not have healthcare.
With our economy staggering under the effect of falling wages and falling demand, with businesses collapsing in droves from the shortage of customers–underpaying workers (customers) is a menace to national security.
No healthcare, plus probably other problems not as easily tracked.
First, this undercuts even the minimum wage for citizens and non-citizens alike, partly by having lower effective wages, partly by lowering payroll even further by simply not paying some of these wages, overtime, cleaning supplies, insurance maybe? and who knows what else.
Second, likely there are other side-effects of having underpaid, overworked and possibly aggrieved people cleaning your large office buildings — one might be that you get poor cleaning services. But this is always a risk, I think. Years ago, we used to sprinkle a few pencil shavings on the office carpet and watch to see how many days – or weeks – they remained. Yet I am sure those cleaners got decent pay.
Worse, is the potential for information theft, and gaps in building security, possibly vandalism.
But set all that aside, how dare these two business owners cheat almost 400 workers in this way? The damages work out to about $10k per employee, which means the fraud had to be part of their business plan, not mere sloppiness. Those two didn’t get half the smacking-around they deserve.
Noni
Noni-Don’t forget the unpaid payroll and income taxes–amounts to billions a year in the nation as a whole. Illegals aren’t the only people to suffer at the hands of their employers. Such abuses apply to many employees in small businesses such as restaurants. Tips turned in are withheld. Workers don’t get paid for time worked. Many small employers deduct taxes from the employee’s pay but never actually pay the taxes. Result–the worker has no credit toward Social Security and UIB, and owe IRS into the bargain.
I agree with Noni that abuses directed at illegal workers drive down wages and working conditions as a whole. I notice that this case was tried in California. The Obama administration is taking a different approach from that of the previous two administrations. It was virtually impossible to get either Californias DOL or the federal DOL to take action to such abuses when I was working on the CA Central Coast from 1986 to 2003.
This case was decided and the $3.5M fine set in 2007. But these folks weren’t dragged off to jail to get their attention until this winter, nearly three years later. I hope their attention has been sufficiently gotten by now.
But how many more are there? I would think it would be rather easy to cover up this sort of ongoing cheat. Maybe we should do what Lord Peter Wimsey did — set up a program of secret clerks and secretaries who would hire into businesses and track these sorts of transgressions. Although these days I don’t think we would be allowed to call it a “Cattery.”
sammy…..i bet you didn’t work as hard as the cleaning company employees and i’m sure you were paid a lot more.
your post is dishonest…..no wonder you side with the employers against the employees.