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The onslaught of wage and hour class action filings continues.  And where retail and restaurant employers were previously a favorite target, plaintiffs’ attorneys are now aiming at other industries, including the construction industry. 
 
A new theory applicable to construction contracts arises under Labor Code section 2810, which prohibits anyone from entering into a construction contract where the person “knows or should know” that the agreement does not provide sufficient funds to allow the contractor to comply with all labor laws and regulations.  The plaintiffs’ argument is that a deal which seems to good to be true most likely is – and a general contractor is liable for a subcontractor’s violations because it should have known that a subcontractor was unable to meet its wage obligations.  These obligations include paying minimum wages, prevailing wages, and overtime.  General contractors who pay their workers legally are now finding themselves the subject of suits brought by employees of a subcontractor that does not.  General contractors can use a statutory presumption to protect themselves, but it is too often not utilized. 
 
Plaintiffs are also bringing portal-to-portal claims.  For example, plaintiffs have challenged the practice where workers are required to report to the contractors’ shop to pick up tools, equipment, and material, but clock in later when they arrive at the job site.  Plaintiffs contend that the travel time to the job site is compensable because it follows the first “integral and indispensable” activity – gathering the tools and materials necessary to do the job.  Plaintiffs are also bringing claims that foremen either explicitly or implicitly require employees to work off-the-clock.
 
Construction employers have been hit with claims that employees have been required to provide their own tools and/or safety equipment in violation of Wage Order 16, which provides that the employer must provide such tools unless the employee earns at least twice the minimum wage. 
 
In addition, employers in the construction industry face the usual wage and hour claims:  unpaid overtime and missed meal breaks.  Because construction workers can sometimes work long shifts, employees may bring claims that an employer failed to provide a second meal break, as required under Labor Code section 512.  Similarly, long shifts and seven day workweeks can provide employees with unpaid overtime claims.  Plaintiffs may also bring “add on” claims for violations of Labor Code sections 226 (failure to provide itemized wage statements) and 1174 and 1174.5 (failure to maintain accurate records).  The recent case of Brinker Restaurant Group v. Superior Court (2008) 165 Cal.App.4th 25, is helpful, in that it holds that employers are only required to provide breaks and are not responsible if the employees elect not to take them.
 
Finally, employees bring unfair competition claims against employers, based on all of the above conduct, which can increase the statute of limitations on their claims to four years.   Because plaintiffs argue that the violations are part of the employers’ policies or practices, the claims are routinely brought as class actions, with classes ranging from about fifty employees to several thousand employees. 
 
Construction employers therefore need to familiarize themselves with the intricacies of the Labor Code and Wage Order 16, and ensure that they fully comply with all provisions.  Moreover, general contractors need to be cautious when dealing with subcontractors and take steps at the outset to protect themselves from Labor Code section 2810 claims brought by subcontractors’ employees.  Cooper, White & Cooper is available to assist with this endeavor.

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