Labor Commissioner’s Office Awards $3.5 Million Against Oakland Contractor

The California Labor Commissioner cited Oakland construction contractor, Attic Pros, and its owner for misclassifying 119 workers as independent contractors. The Commissioner ordered the company to pay more than $3.5 million, including unpaid minimum wages and overtime, liquidated damages, waiting time penalties, and civil penalties for violations during a 32-month period.

The Commissioner awarded $3.5 million based on 10–14 hour workdays up to six days a week, but the company paid them a daily rate amounting to less than minimum wage.

The award consisted of:

• $191,400 for minimum wage;
• $321,300 for overtime;
• $191,400 in liquidated damages (a type of fine that doubles the minimum wage payment);
• $1,405,350 in waiting time penalties (up to 30 days of extra pay for not paying all wages due when an employee leaves the company); and
• $1,481,600 in civil penalties.

Commissioner Julie Su stated: “This is an egregious case of wage theft, with workers misclassified and denied a just day’s pay. My office enforces California’s labor laws to stop employers willing to cheat employees of their pay as a means to gain an unfair advantage over their law-abiding competitors.”

Misclassification of employees as independent contractors can become a costly proposition. Whether someone is an independent contractor or should be classified as an employee is a legal question based upon multiple factors in the relationship, and is not merely a matter of choice by the parties. Various government agencies have posted guidance online for making a correct classification determination. See Independent Contractor (Self – Employed) or Employee? and EDD Employment Determination Guide. The Division of Labor Standards Enforcement (DSLE)  has posted on its website frequently asked questions for proper classification of workers.

See also:

• Location, Location, Location…Location, California Municipal Minimum Wage Rates Continue to Grow (July, 2017)
• A Super-Sized MacDonald’s Overtime Class Action Ruling (April, 2017)
• Contractor Misclassification … Class Action? (October, 2014)
• Classifying Workers, Employees or Independent Contractors? (June, 2014)
• Independent or Employed (April, 2014)
• California’s Exemptions from Overtime Pay (January, 2012)
• Working Overtime in California

If you need assistance to determine how to classify employees correctly, please contact one of our attorneys, Tim Bowles, Cindy Bamforth or Helena Kobrin.

November 20, 2017

Helena Kobrin