Southern California Grocery Store Janitors Settle Class Action For $22.4 Million
December 17, 2004
Southern California grocery chains Albertsons, Ralphs and Vons have agreed to pay $22.4 million to settle a class-action lawsuit filed by janitors who were illegally misclassified as independent contractors so that their employers could avoid complying with California wage and hour laws. The scheme called for the janitors to be characterized as "subcontractors" for Building One Service Solutions, a now-bankrupt janitorial service that "rented" the workers, mostly poor hispanic men, to the stores. The janitors did not provide their own tools, and worked on a schedule under the direct supervision of store managers. In every respect, they were treated as employees, except when it came time for things such as overtime pay, breaks and other rights that employees have, but independent contractors don't.
The money will be among more than 2,000 janitors who were employed from 1994 to 2001. Each worker will receive up to $9,300, depending on where they worked and for how long.
The misclassification of independent contractors is a common way for employers to avoid paying overtime, employer's share of payroll taxes, and unemployment benefits, as well as to avoid giving meal and rest periods to their workers. If you work as an independent contractor in the State of California and would like to have your situation reviewed to see if you have a claim, drop us an email and we would be happy to give you a free evaluation.
This story was in the Daily Journal on January 21st. Nice scoop.
Posted by: DBC | January 27, 2005 at 09:33 PM
I operate a consulting business that focuses on legal issues contingent employment, including temps, contractors and leased employees. I focus on worker misclassification, co-employment and other legal issues involving (perma)temps, etc. My web site is Temp Law On Line at www.contingentlaw.com. I write and report on these legal developments for newsletters, seminars, and various publications.
I would be interested in learning more about this case and getting the Complaint and any other svailable documents. This also appears to be a co-employment case (against the defendant stores and janitor firm). Am I correct? Was this argued?
I am following the Walmart Janitors' case from New Jersey, but this appears to be a different allegation and facts.
Finally, are you familiar with any similar cases in California or elsewhere?
Thanks.
Ron Wainrib, Esq., Editor and Publisher
Temp Law On Line
www.contingentlaw.com
(508) 528-5445
[email protected]
Posted by: Ron Wainrib | February 02, 2005 at 07:51 AM
I operate a small business in S. California, doing business for about 30 years. We contract our services to major corporations and employ an average of 25 people (all mandatory payroll taxes and benefits are paid on our employees). We are an example of an authentic independent contractor.
Companies like Building One Service Solutions are assisting in perpetuating a payroll tax scam. They offer "tax free" employees to major corporations under the cloak of "independent contractors". The Independent Contractors they lease out are actually regular, everday workers who they have been led through the process of setting themselves up, individually, as a fraudulent companies.
These workers are usually forced to pay for this service and to pay for a worthless occupation accident insurance policy which is represented as a replacement for Workman's Compensation. In addition, these workers are not fully prepared for the yearly tax bill they will owe, because most do not understand they must pay their own taxes. Signing up with a "pay to work" agency like this often condemns the worker to a lifetime of tax troubles.
The employee leasing agencies are only assisting in the problem. Major corporations, such as Albertsons in this case, are lining up for the savings. Usually, the corporations fully understand why and how they are saving so much money. The mandatory benefit and payroll tax burdens have been shifted to the low-level worker.
The employee leasing company is believed to be a sheild against tax agency suits. The corporation believes the leasing agency will get sued for the fraud, not them. Albertson's was named as a co-employer because Building One Service Solutions went bankrupt and the taxing agencies were intent on recovering the unpaid taxes.
This practice is illegal and it has been for at least as long as I've been in business. In recent years this type of payroll scam has increased substantially and it amazes me how the agencies are handling it. They are slowly plodding away, arguing every legal issue about what is and what is not an Independent Contractor. Get real...100's, 1000's, of low-level workers have become sudden "business owners" with the help of these so-called leasing agencies with the secret approval of large corporations, and the governing agencies are having a hard time proving that they are not in reality business owners? It is an obvious scam.
Meanwhile, honest tax paying companies who contract their services to major corporations are falling like flies due the the inability to compete against bidders whose workers who can be hired without the expense of benefit and payroll taxes. I believe the real users of this tax scam, the large corporations who have helped it grow by demanding ever lower prices and turning a blind eye to the legalities, are indeed liable.
Posted by: Lisa Huff | October 06, 2005 at 09:22 AM
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Posted by: Peo and Employee Leasing Since 1985 | July 10, 2006 at 12:28 PM
I am one of many DIRECTV so called independent contractors. We work the long hours, others benefit, and we don’t get paid. How can this be fair? DIRECTV promises free installation then out-sources installations to Connect Television who in turn subcontracts the work to small subcontractors. The subcontractor dispatches us to do the work. DIRECTV, Connect Television has no problem inflicting tremendous amount of pressure on us to be there on time, complete assignments, and make the customers happy. They have no problems ordering us to do extra work without compensating us, if we didn’t we are faced with losing our jobs. They hold our pay as much as they like, they charge us back for jobs we finished as they wish. Connect Television for one reason or another decides to fire the subcontractor we wok for, and the contractor takes the money and run and refuses to pay us. We call Connect Television asking for help they hung up the phone on us referring us to the company we worked for. We call DIRECTV for help they refer us to Connect Television. We are left with bills, mortgages and mouths to feed with no check, for jobs done, on the way. Where do we go from here, what can we do?
The latest incident is when Connect Television decided to end Big Dog Communication, a Modesto based company, installation contract in Orange County but keeps Big Dog Communication as its biggest subcontractor in the Bay area. On 4/ 12/ 07 Big Dog Communications promised over 14 of us pay within a week as of today only one was paid. Big Dog Communications still work for DIRECTV and Connect Television in the Bay area.
Please help us. Or direct us to anyone who might be able to help us.
Posted by: Samir Al'Jandali | June 06, 2007 at 10:50 PM
Reading your posts and also being one of many DirecTV installers I to am in the same boat, however my trouble is mainly from connect tv, they have recentley informed there contractors that they will not be paying them for a month (yet they continue to receive there pay from DirecTV) and that only certain companies will continue to get paid, they have told us that they still expect the techs to continue working... I have contacted the labor commision about this issue, but they are only geared to do a one on one, and I would actually have to go after the company that I contract with, however they did say that it is illegal for connect to do this and said that it needs to be reported and would be a superior court matter, this issue falls under both contract laws and some labor laws but has to be done by the contractors that are actually contracted with connect tv.... connect has a way of threating it's contractors with dumping there companies if they should refuse to roll out on jobs or speak up... I would like to hear from anyone that can help us or direct these small companies in anyway that could help resolve this issue.... please post any info or direct us in the right way....
Posted by: J.H. | June 12, 2007 at 11:21 AM
need some advise or an evaluation of case involving a misclassification of person as an independent contractor for approximately 8 years with company with daily work, paid weekly, same bank used every time check was cashed for the work performed company/ personal checks have always been given to "independent contractor" but still not an employee???? The only legal "employees" of this company are family of this business owner and only 1 of those people works for company from time to time as needed which is rarely ever.
Posted by: melissa | December 15, 2007 at 11:38 PM