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Largest Wage Theft Violation in California Leads to $12 Million Fine

The Labor Commissioner’s Office has cited a Southern California subcontractor for nearly $12 million in wage theft violations that left more than a thousand workers waiting weeks or months to be paid, only to receive a portion of what they were owed.

RDV Construction, Inc. hired crews to provide framing, drywall and other trade work for hotels, apartments and mixed-use buildings around Los Angeles. Over a 21-month period, the City of Industry-based company paid employees with checks that did not clear due to insufficient funds. After the checks bounced, RDV Construction failed to pay all wages due to the workers.

The Labor Commissioner’s Office launched its investigation in January 2017 and determined that between 2014 and 2017, RDV employed more than 1,000 workers at 35 construction sites in the region, and typically worked their crews nine hours a day without proper rest breaks or overtime. Investigators also found the employer habitually and illegally withheld 10 to 25 percent of earned wages from the workers.

RDV Construction Chief Executive Officer Rafael Rivas as well as project managers Juan Rivas and Nicolas Del Villar are jointly and severally liable for the citations issued to the corporation.

The Labor Commissioner’s Office launched an investigation of RDV Construction, Inc. after workers complained about pay violations to Carpenters Contractors Cooperation Committee, a non-profit labor-management organization.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer intentionally fails to pay all wages due to the employee at the time of separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days.

Most workers in California must receive a paid 10-minute rest period for every four hours worked. If workers do not receive rest breaks as required by Industrial Welfare Commission orders for their occupation, the employer must pay one hour of pay at the worker’s regular pay rate for each workday that the break is not provided, and civil penalties of $50 per worker per pay period for the initial violation, which increases to $100 each for subsequent violations.

Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime and other labor law violations, and calculate payments owed and penalties due. Civil penalties collected are transferred to the State’s General Fund as required by law.

[Edited from Department of Industrial Relations Release No. 19-16]