California Labor and Employment Defense Blog

California Labor Commissioner Files Multi-Million Dollar Suit Against Janitorial Companies

In a press release issued by the California Department of Industrial Relations, the agency announced that it has filed a joint lawsuit against Excell Cleaning & Building Services, Inc., and MO Restaurant Cleaning of California, Inc. The lawsuit is seeking damages for unpaid wages and penalties going back to 2003 for janitors who worked for the company. The DIR claims that its investigation also revealed that employees were being misclassified as independent contractors to avoid paying nearly $250,000 in payroll taxes. This misclassification also resulted in workers being paid less then minimum wage and not being paid overtime. This type of lawsuit is not a novel one, as many companies in California have been sued under a joint employer theory in cases alleging almost the same facts.

The DIR’s press release reminds employers that under state labor law, all wages earned by any person are due and payable twice a month on days established in advance by the employer as regular paydays. All California employers are also required to pay minimum wage, overtime for all hours worked in excess of regular hours, double time rates for work in excess of 12 hours in one day, or any work in excess of eight hours in the seventh day of a work week, and pay final wages due to employees at the time of termination. Finally, the DIR notes that employers are required to provide itemized statements, permit 10 minute rest breaks for every four hours of work, and provide a meal period of not less than 30 minutes for the first five hours of work unless the work period is not more than six hours.

Companies that outsource work to contractors, such as janitorial services, should be extremely careful to ensure that they have taken the proper measures to avoid being a joint-employer under the law.  If found to be a joint-employer, the company could be liable for the contractor's wage and hour violations. 
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