A California construction firm called RDV Construction was recently found to have committed the biggest wage theft violation by a private company in the state’s history according to regulators. The firm will be fined almost $12 million for underpaying and withholding wages from employees. The company used workers for apartment, hotel and other building projects throughout Southern California.
Unfortunately, wage and hour violations are common in the construction industry for smaller projects. The massive citations that this company is now facing illustrate why it is important for businesses to put correct payment practices in place before issues occur.
How everything went downhill for RDV
RDV Construction hired workers to build projects such as the Crown Apartments building in West Hollywood and Boardwalk by Windsor in Huntington Beach. Employees typically worked 9-hour days without proper payment or rest breaks on these projects. The firm broke state and federal laws in the following ways:
- Workers did not receive overtime pay
- The company failed to pay employees in a timely manner
- The company did not meet minimum wage regulations
- Workers were not given rest breaks
- Wages were withheld, and payroll checks bounced
These unfair payment and labor practices went on for at least three years, but Latino workers were hesitant to come forward due to today's political climate. Finally, when paychecks bounced, employees had enough.
Now, the business is scrambling to pay massive fines. Out of the $12 million in citations that the company must pay, over $5 million account for waiting time penalties for failure to pay workers in a timely fashion.
A takeaway for construction businesses
Running a construction business in Southern California is challenging. The industry comes with risks and injury liability. Disputes and litigation are not uncommon. While some businesses purposely skim payroll wages, other companies may accidentally commit wage and hour violations. It is important to seek experienced business counsel to put proper protections and practices in place early. When litigation is inevitable, you must immediately retain experienced counsel to address the issues as soon as possible, rather than hope they’ll go away or resolve themselves.