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ORANGE COUNTY – California Attorney General Edmund G. Brown Jr. today announced a settlement with an Orange County drywall contractor that will award $1.4 million in restitution to employees who were forced to work overtime and through state-mandated rest breaks without being fully compensated for their work.
“This settlement will right a wrong that’s been inflicted on the hard-working employees of Interwall,” Attorney General Brown said. “The company tried to increase its profit on the backs of its workforce, by denying employees rest breaks and overtime pay. With this agreement, Interwall will now be required to pay its employees a proper wage for every hour of work they performed.”
Brown sued Interwall Development Systems last January for engaging in unfair and unlawful business practices. The suit alleged that Interwall denied certain overtime pay, did not provide accurate itemized wage statements, and did not allow its employees to take breaks during afternoon shifts. Approximately 400 employees were affected by the company’s practices. The company slashed its labor costs in an effort to underbid competition for at least 150 drywall installation projects in Los Angeles, San Bernardino, Riverside, Orange and San Diego Counties.
The settlement, approved by the judge today in Orange County Superior Court, prohibits Interwall from circumventing the state’s labor laws. It will award just over $1.4 million to current and former employees of Interwall that were not properly paid for work they had done. Of the $1.4 million to be paid by the company, $674,396 will be applied to resolve unpaid overtime claims, $303,607 will resolve interest claims on the overtime, and $425,996 will be paid to compensate workers who had to work through state mandated break periods.
Additionally, Interwall will pay up to $131,000 in employer share payroll taxes that the company would have paid if it had adequately compensated its employees for their work.
Since the company violated provisions of the California Business & Professions Code on unfair business practices, it will have to pay civil fines in the amount of $200,000 to the state.
Investigators found that some Interwall employees worked Monday through Saturday, up to twelve hours per day, and received no overtime payments. Interwall also denied rest breaks to employees during their afternoon shifts. Under California law, workers are entitled to a ten-minute break every four hours and to overtime pay for working more than eight hours per day or forty hours per week.
To avoid paying overtime, Interwall set up a business operation with affiliate companies that paid employees, at regular pay rates, for the extra hours. In one case, an employee worked sixty-eight hours for Interwall, but was paid for forty hours by Felts Construction Company and twenty-eight hours by Cinco Construction.
Last December, Brown sued two janitorial companies, Excell Cleaning & Building Services and MO Restaurant Cleaning Services, for committing flagrant violations of California’s basic wage and hour laws. Brown also sued Brinas Corporation, a Southern California drywall contractor, found to be paying workers below minimum wage and also denying overtime wages. The state was awarded nearly $1.4 million in the Brinas case in June of this year. Brown also sued PacifiStaff, a company that was teaching construction companies how to avoid providing state mandated workers’ compensation benefits.
Attorney General Brown enforces California laws that require fair business practices in order to protect working men and women and ensure a level playing field where all businesses adhere to the same rules of conduct. His office has several ongoing investigations into employment, payroll and record-keeping practices of various businesses and construction companies across California.
The settlement and original complaint are attached.