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On Tax Fraud Days of Action, California AG Pledges Continued Fight Against Wage Theft and Tax Fraud

Flanked by Union Carpenters, AG Bonta Delivers Remarks at Los Angleles City Hall

During an April press conference marking the beginning of the Carpenter Union's annual Tax Fraud Days of Action, California Attorney General Rob Bonta reaffirmed his commitment to protecting workers' rights and combating labor law violations. He cited recent successes against West Coast Drywall and Paint, and Almafi Stone and Masonry as prime examples of his office's dedication in fighting contractor fraud.

During the press conference, Bonta spoke of his upbringing, having come from a family of Union organizers. Organized labor is in his blood. Bonta, flanked by a large group of union members, made it clear that he has always been in the corner of organized labor. "We stand with workers, we stand with unions, we stand with you, it's that simple at the California DOJ." stated Bonta during the press conference.

Two Recent Successes

The AG took a moment to highlight two recent cases the DOJ has successfully pursued. The first one, against West Coast Drywall and Paint, alleged a litany of violations against the Southern California-based construction subcontractor. They were accused of failing to pay employees wages owed, neglecting overtime wages, providing inaccurate and incomplete itemized wage statements, withholding reimbursement for tools and equipment, and denying mandated breaks for field employees since at least August of 2019.

According to a press release from the AG's office, the company is a significant presence in the construction industry and boasts itself as the largest drywall and painting subcontractor in Southern California. The company's client roster includes prominent home builders such as KB Home, Lennar Homes, and Shea Homes. Over the past four years, West Coast Drywall & Paint has employed approximately 7,000 workers, primarily as drywall and painting field employees.

At the heart of the case against West Coast Drywall & Company is its piece-rate compensation system. Instead of paying a fixed hourly wage, the company compensates its field employees for each piece completed at a predetermined rate. While piece-rate compensation systems are common in the construction industry, they are often susceptible to abuse by employers seeking to underpay their workers. The Department of Justice investigation revealed that West Coast Drywall & Company failed to provide employees with essential information regarding the number of pieces forming the basis of their pay, thereby preventing workers from accurately calculating their owed wages. Bonta thanked the Carpenters for bringing the case to his attention and their compliance team for helping build the case.

Many of the same charges were leveled against Amalfi Stone and Masonry, however Bonta specifically highlighted Amalfi's use of an illegal labor broker to find cheap exploitable workers- a practice all too common in these cases. The company ultimately settled for a million dollars and In a rare turn of events, Amalfi, sincere in its desire to right its wrongs, paid what it owed and has pledged to do business the correct way.

Bonta applauded the company, "there's also something else about the story that I think is really important. Amalfi has also agreed to turn things around and abide by all labor laws and tax laws and it’s now a union signatory company. This is proof that companies can choose to change course, to do better, to comply to follow the rules, follow the law and treat their employees better."

The Path Forward

Attorney General Bonta's dedication to defending workers' rights extends beyond these lawsuits. Through various sections of the California Department of Justice, including the Civil Rights Enforcement Section, the Worker Rights and Fair Labor Section, and the Antitrust Law Section, Bonta has demonstrated a consistent enforcement of California's laws in protecting workers and maintaining a fair and competitive labor market.

Bonta is tackling the problem head on but he stresses that the DOJ can't be everywhere at once. BDN spoke with the AG after the press conference and he pointed up the importance of partners like the Carpenters Union and other compliance teams in being eyes and ears on the street, "working with compliance teams who are onsite seeing the violations, who can share with us information, documents...provide us with witnesses, how the law may or may not be complied with, That's invaluable. There's a synergy in it. They want enforcement and we need the facts and the evidence to be able to enforce. It is important that we have a point of contact with all the compliance teams."

The Attorney General tells BDN that he is proud to lead the charge against this criminality and promises that the DOJ will do everything in its power to stamp out the scourge of wage fraud, tax fraud, and worker exploitation. He hopes the DOJ's efforts serve as an example for other states and that more and more scofflaw contractors will learn that they will pay handsomely for this type of fraud and for the exploitation of the workers.

For one week every April, The United Brotherhood of Carpenters’ Tax Fraud Days of Action spotlights the pervasive problem of construction industry tax fraud. This years TFDOA took place the week of April 13-19th.  

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