Anaheim company under investigation for underpayment of employees

January 16, 2018

An Anaheim janitorial firm reportedly paid employees only $400 monthly for about four years, just a fraction of the minimum wage. The California Attorney General announced the filing of a lawsuit against the company that services dozens of retailers across the state as he called the firm “unscrupulous.”

The retailers, including JoAnn’s Fabrics, Toys R Us, Burlington Coat Factory, dd’s Discount and Ross Dress-for-Less, will not be named as complaints because they contract out the work to the firm. They might not have had any knowledge of the unfair wage practices of the janitorial company.

The retailers hire a third party who then searches for a janitorial firm, putting two layers of distance between the stores and the janitorial firms. This type of contracting agreement, common in the retail industry, protects them against these types of work-related lawsuits. Even so, the attorney general advised the retailers to take notice of the lawsuit and added that the retailers have a duty to those who they employ even as subcontractors.

The third party and the janitorial firm, One Source, did not respond to phone messages.

The lawsuit further indicates that the janitorial company did not provide accurate payroll information and did not properly report payroll taxes. The lawsuit requests $1 million in penalties and back wages for employees.

One Source reportedly paid workers for how much work they did instead of paying workers by the hour. They did not pay minimum wage or track the number of hours worked. During the four years that the lawsuit covered, the minimum wage has increased from $8 to $10.50.

The state labor commissioner has filed similar complaints, but the companies have gone out of business or simply reorganized under a new name. A 2015 law specifically focuses on collecting money when a firm closes and then reopens under a different name. The California Labor Commission can also place a property lien on companies when appropriate.

Employees might hesitate to file wage-related complaints because it could mean the loss of their job. An employment attorney can help protect your rights and provide insight as to the best course of action to take in these situations.

CategoryCivil Rights Law
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