General and Subcontractor Both Liable for California Wage Theft

After 62 construction workers went unpaid for weeks of work, the state of California has issued citations to the subcontractor for violations at two construction projects. Universal Structural Building Corp.’s bill comes to $597,933 in unpaid wages and penalties.

Making use of newly enacted labor code, the state is also holding J.H McCormick Inc., a general contractor on one of the projects, independently responsible for $68,657 of the citations. The new code holds general contractors liable when their subcontractors commit wage theft.

Worker complaints are heard

In November of last year, a large group of employees arrived at the California Labor Commissioner’s Office to discuss having worked 5- and 6-day weeks for 8 to 14 hours a day without pay.

They were employees of Universal during the last weeks of construction work on the Essex Hollywood, a residential and commercial project for which McCormick was the contractor.

A separate group of Universal workers gathered at the Labor Commissioner’s Office several weeks later to describe wage theft committed against them at another project for which Universal was the subcontractor, the Portside Ventura Harbor mixed-use project.

According to the workers, Universal claimed it lacked funds to pay the them and that it was the general contractor’s responsibility to pay.

Responsibility goes “up the chain”

California Labor Secretary Julie A. Su warns that “up-the-chain general contractors are now responsible for wage theft committed by their subcontractors on all construction projects in the state.”

The 2018 code that enables these expanded powers, Assembly Bill 1701, permits hardball tactics, “including the placement of liens on these properties which will have a hold until the labor these workers poured into these projects is paid for in full.”

The Labor Commissioner’s Office filed mechanic’s liens at both sites to secure worker pay.

Of the nearly $600,000 now owed by the companies, only about $130,000 is for the compensation originally owed to the construction workers.