$5 Million Overtime Claim Filed by Labor Commissioner

On December 19, 2007 the California Labor Commissioner filed an action against Excell Cleaning & Building Services, Inc., and MO Restaurant Cleaning of California, Inc., for allegedly failing to pay approximately 300 janitorial workers proper wages and engaging in unfair business practices. The complaint seeks damages exceeding $5 million. The State Attorney General has agreed to join the legal action with the Labor Commissioner.

The legal action resulted from an investigation initiated by the Labor Commissioner in 2006. The investigation purportedly uncovered a failure provide meal and rest breaks, failure to pay employees all earned wages and overtime to which they were entitled. The investigation also revealed that employees were being misclassified as independent contractors to avoid paying nearly $250,000 in payroll taxes. This misclassification resulted in workers being paid less then minimum wage and not being paid overtime.

The announcement of this litigation followed shortly after the Labor Commissioner issued a press release regarding the distribution of funds from a $2.7 million settlement agreement with Rady Children’s Hospital.

The DLSE has recently increased its enforcement efforts. Employers should review their wage and hour practices to ensure compliance with recent changes to the law.

Phillip J. Griego & Associates
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341

Original article by Robert E. Nuddleman, former associate of Phillip J. Griego & Associates

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.

Leave a Comment

Your email address will not be published. Required fields are marked *