Updated California Labor Code Tested, Settlement Reached


Los Angeles, CA A 2004 addition to the California labor code underwent its first true test this month with the announcement of a settlement that will see employees of a subcontractor receive compensation for deprivation of contributions to social security, disability and unemployment insurance.

More than 200 employees who worked for subcontractors under Tidy Building Services Inc. will receive between $100 and $2000 in compensation.

According to the 2/9/10 issue of the Business Wire, California Labor Code Section 2810 addresses the particular problems faced by low wage workers in the janitorial, construction, security guard, farm labor and garment industries??"sectors often dominated by immigrant workers, who are particularly vulnerable to violations of wage and hour laws.

In this case, the contractor, Tidy Building Services Inc., was found to have provided inadequate funding to subcontractors in order to ensure that employees received full benefit of employment laws and regulations, not to mention allowing the subcontractors to comply with same.

Although Tidy Building Services Inc. is based in New Orleans, the settlement is the result of charges that California Labor Commissioner Angela Bradstreet filed in San Diego Superior Court.

"This settlement sends a strong message that my office will aggressively pursue contractors who seek to gain an unfair advantage by underfunding subcontracts," said Bradstreet. "The subcontractors get squeezed, the workers don't get paid, and law-abiding contractors lose out as well through unfair competition."

The action was the state's first lawsuit aimed at enforcing Labor Code Section 2810. Tidy Building Services Inc. has agreed to pay the state of California the sum of $100,000 on behalf of employees who worked in janitorial services in San Diego County and the Los Angeles area.

Labor Code 2810 was designed to spread the responsibility for systemic violations of minimum labor standards by making those entering service contracts responsible for fully and accurately estimating service contract performance. The cost of labor law compliance must be incorporated into the contract price paid.

While contractors may approach tenders with low bids to secure a job, the bid is often so low that the contractor cannot afford to uphold the provisions of California labor law, thus under-funding subcontractors.

You might also like

No Comments

Leave a Reply

Note: Your name will be published with your comment.

Your email will only be used if a response is needed.

Legal Help Form

Please complete this form to request a review of your complaint by an attorney.