Still Trying to Clean House in California
Posted on 06-Nov-09 by The Timekeeper
Back in 2007, I reported on the case of California Maid Services and Carpet Cleaning in Gardenia, California. They were the company that got socked for $3.5 million in back wages and $1 million in wage and hour penalties for misclassifying 385 of their workers as “independent contractors” when they were, in fact, employees. Well, OK, that and not paying overtime, not paying minimum wage and not keeping any timekeeping records at all (much less adequate records).
Time for an update.
In September of 2008, payment had apparently still not been made, so lawyers for the DOL filed for civil contempt charges. In April 2009, the (sometimes slow-turning) wheels of justice finally assessed fines of $2,000 per day from the company plus an additional $200 per day from the company owners for every day the money remained unpaid.
Fast forward to October of 2009… and apparently the back wages still haven’t been paid.
So apparently warrants were issued. According to the LA Times, the owners, Sergio Maldonado and Lorenza Rubio, turned themselves in to the U.S. District Court on Friday October 31 and were taken into custody. They cooled their heels until Tuesday, Nov. 3, when they were released after promising to pay $30,000 by Thursday, Nov. 5, and the balance by Nov. 12.
If they don’t pay by then, and they can’t show a good reason why — despite having over two years to work it out (or at least make some sort of good faith effort to pay something) — they can’t pay the balance, they could end up in jail.
Lessons to be learned
Company owners can be held personally liable for things their companies do. It happens all the time — and incorporation doesn’t necessarily shield you.
It’s a bad idea to ignore DOL fines and penalties, thinking they’ll go away. They don’t.
The case in question came up because of one inquiry from one disgruntled employee. Point is, it doesn’t take much to get the ball rolling.
The DOL has hired nearly 250 additional wage and hour investigators in the past few months, promising vigorous and thorough investigation of complaints and a more proactive approach to identifying problems to start with. It’s probably not smart to figure you’re too small or too obscure to attract attention.
I really don’t want to find myself writing about judgments and penalties assessed against any of my own beloved readers here! So let’s be careful out there, ‘kay? 
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