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California Labor Commissioner orders janitorial subcontractor to pay $3.9 million in penalties and back wages

A subcontractor that provided janitorial services to retail businesses across the state has been ordered to pay $3.9 million in owed wages and penalties after California Labor Commissioner Angela Bradstreet filed a civil suit seeking a default judgment following an investigation launched in response to wage claims received from 15 employees in Northern California. The Division discovered that E & R Services failed to properly pay at least 50 employees who worked across California from December 2006 through January 2009. The investigation found the company paid employees a fixed sum of $60 a day, which resulted in minimum wage violations. E & R Services also failed to pay overtime, did not provide employees with meal and rest breaks, and evaded payroll taxes. E & R Services, Inc, a Las Vegas-based janitorial contractor, had contracts in the state with FoodMaxx supermarkets and Fry’s Electronics. The company is no longer in business. A default judgment was filed in State Superior Court in Los Angeles County after E & R Services failed to make an appearance or respond to an initial complaint.

This is the first default judgment ever to include a violation of Labor Code section 2810, which makes it illegal to subcontract janitorial and other services without providing sufficient funding to allow the subcontractor to comply with all laws. The Labor Commissioner’s office determined that E & R Services provided insufficient funds to subcontractors for janitorial work. “California will not tolerate employers who operate in total disregard of the law and try to increase their profits by underfunding subcontractors, cheating workers out of wages and undermining the ability of legitimate competitors to compete for work in this tough economic climate,” said Labor Commissioner Angela Bradstreet. “Labor Code Section 2810 was created specifically for violations like this to address the particular problems faced by low wage workers who are oftentimes more vulnerable to being exploited.”