Attorney General Recovers $2 Million in Unpaid Wages for Workers Cheated by Bay Area Construction Company

Wednesday, August 25, 2010
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

OAKLAND – Attorney General Edmund G. Brown Jr. today secured a $3.9 million settlement, that includes $2.2 million in back pay for more than 120 construction workers “cheated hour-by-hour” by Livermore-based Country Builders, Inc., after investigators uncovered a multi-year scheme to shortchange employees and shave workers’ compensation costs.

“Country Builders won millions of dollars in government contracts to build housing for low-income Californians,” Brown said, “but then the company turned around and callously cheated its own workers hour-by-hour. Today’s settlement recovers more than $2 million its workers are owed.”

Brown’s office initiated its investigation into Country Builders in late 2008 after employees reported their pay stubs falsely indicated they were paid a higher hourly rate of pay than they actually received.

Investigators found that between 2006 and 2008, the company routinely failed to pay many of its workers the state’s prevailing wage for work done on government-funded construction projects, as required by law. A review of the company’s timesheets revealed that 124 employees were underpaid on at least one occasion.

The company also misreported its hourly wage rates to escape paying the full amount it owed the state in workers’ compensation premiums.

Brown filed suit against Country Builders in March, alleging that the company engaged in unfair competition and violated state labor laws.

Today’s $3.9 million settlement requires Country Builders to pay $2.2 million in back pay to employees (including unpaid payroll taxes), $1.6 million in civil penalties and other costs and $136,000 to the State Compensation Insurance Fund for unpaid workers’ compensation premiums.

Today’s settlement also prevents Country Builders from working on any government-funded public works project for three years, the maximum period allowed by state regulations.

Some of Country Builders’ government-funded construction projects included:

• The Fairways multi-family apartments in San Jose
• Giant Road Family Apartments in San Pablo
• Jubilee Senior Housing in Berkeley
• Seven Directions Apartments in Oakland
• Pioneer Heights student housing for California State University, East Bay
• University Village student housing for University of California, Berkeley

Country Builders will pay back wages in two equal installments of $1.1 million, the first by December 31, 2010, and the second by April 30, 2011. A restitution administrator will oversee the distribution of these funds to workers.

To report violations of the state’s labor laws, contact Brown's office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php.

Copies of Brown’s original complaint, filed in Alameda County Superior Court, and today’s settlement are attached.

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