The California Labor Commissioner’s office reported Monday that it sued Calcrete Construction Inc. for $6.3 million for wage theft violations and misclassification of 175 workers as independent contractors. The case was referred to the state by the Carpenters/Contractors Cooperation Committee, a union-affiliated nonprofit that advocates for compliance within the construction industry.

An investigation against Calcrete began last October. The Labor Commissioner’s office claims the Glendale, Calif.-based firm forced its workers to sign independent contractor contracts starting in August 2016 under threat of termination. It then used staffing firms Dominion Staffing and Southeast Personnel Leasing to pay the workers.

“It is illegal for employers to use subcontractors to distance themselves from their obligation to pay workers, and we will use every tool to dissuade employers from this scheme,” said Labor Commissioner Julie Su.

California estimates it loses $7 billion each year in payroll tax revenue because of worker misclassification.

In the Calcrete case, the state is seeking:

  • Wages and damages of approximately $2,596,438 payable to workers:
    • $325,000 in overtime wages
    • $1,244,438 in waiting time penalties
    • More than $1 million for unpaid sick leave and liquidated damages with the amount to be determined at trial.
  • Penalties of approximately $3,703,900 payable to the state:
    • $2,625,000 in statutory penalties for willful misclassification
    • $78,900 in civil penalties
    • More than $1 million for failure to provide proper wage statements with the amount to be determined at trial.

The Labor Commissioner’s Office reported the workers typically worked 10 to 12 hours Monday through Friday and eight hours on Saturday but were paid only their regular hourly rate and not for the 18 to 28 hours of overtime they regularly worked.