LOS ANGELES, Calif. – In September 2022, janitorial industry watchdog group and advocates from the Maintenance Cooperation Trust Fund (MCTF), along with California Labor Commissioner Lilia Garcia-Brower, Los Angeles District Attorney George Gascon, Insurance Commissioner Ricardo Lara, and California SEIU State Council President David Huerta, announced a long-awaited resolution of criminal charges filed against Pacific Commercial Company (PCC). A plea agreement against PCC cites the company for $522,220 for a litany of labor violations, which includes over $240,000 in stolen wages to be paid back to over a dozen California janitors.
The janitors, formerly employed by Pacific Commercial Company (PCC), received their backpay checks as a result of a joint investigation by the California Labor Commissioner’s Office, Department of Insurance, and the Employment Development Department (EDD) which revealed that PCC underreported their payroll by $14.4 million to their worker’s compensation insurance premium and payroll taxes. The investigation started in 2016 when investigators from the Maintenance Cooperation Trust Fund (MCTF), brought findings of wage theft at PCC to the attention of state regulators.
“This plea agreement resolving this case is a huge win for workers all across the state. We’re proud to have brought this case against PCC, which robbed workers of their wages and stole the ability for communities of color to build wealth and financial security,” said Yardenna Aaron, the Executive Director for MCTF. “Anytime irresponsible contractors impede the flow of money to frontline essential workers, they take money out of the community.”
“Willful misclassification harms not only workers but law-abiding employers and the public,” said Lilia García-Brower, California Labor Commissioner. “When a company like PCC misclassifies a janitor, that means they do not purchase workers’ compensation for that worker if they are injured on the job. This undercuts law-abiding employers in the janitorial industry and that’s bad for California. This case represents our commitment to combating this unlawful practice as a business model in the janitorial industry,” added García-Brower. “Thank you to the brave janitors who came forward to report these violations. It is because of their actions that we are able to send a strong message today that wage theft and fraud will not be tolerated.”
“Workers are the backbone of our economy. Pacific Commercial Company broke the law, took advantage of the system, and put their employees at risk when they underreported payroll to illegally save on workers’ compensation insurance and failed to pay their employees for their hard work,” said Ricardo Lara, California Insurance Commissioner. “This plea agreement serves as a reminder that the Department of Insurance and our law enforcement partners will continue to do everything we can to protect California workers from fraud and abuse and get them what they are owed.
“Depriving workers of money they have rightfully earned breeds mistrust and deceit in our labor force and damages the workplace,” said George Gascón, Los Angeles District Attorney. “The checks given out today not only represent the recovery of unpaid wages but also symbolize what happens when government agencies band together to prioritize workers’ rights. My office is committed to reducing wage theft to ensure workers receive economic justice.”
PCC was contracted to clean buildings on the Wilshire Corridor in the City of Los Angeles. In the course of its investigation, MCTF spoke to janitors employed by PCC and found many non-compliant business practices.
MCTF filed a formal complaint to the California Department of Industrial Relations Division of Labor Standards Enforcement outlining the labor violations that PCC workers faced on the job. Janitors shared being misclassified as independent contractors rather than employees and being required to recruit other janitors in order to complete their shifts. Janitors expressed having no control over their schedules and being told that if they could not make a shift they would have to find a replacement on their own. In cases where they had to secure a replacement, janitors were forced to pay them from their own paycheck.
“Pacific Commercial took advantage of us. They neglected to provide us benefits or pay us our overtime because they purposely misclassified us as independent contractors yet, not once did we have any control over our schedules. And when I spoke up about being underpaid, they retaliated by reducing the hours of my shifts, forcing me to clean several floors at an abusive pace. At the end of the day, I was not receiving the wages that I earned, significantly impacting my ability to make my rent on time and provide for my three girls. I’m glad that we were able to take a stand and show that workers deserve justice,” said Edith Lopez, a former worker for Pacific Commercial Company, who worked to clean buildings for the company for three years.
The multi-year investigation also found that workers were paid by the square foot instead of by the hour, paid with checks with no paystub, and were asked to sign documents outside of their native language, among many other egregious working conditions.
“We’re helping other workers bring law breaking contractors in the shadows of the underground economy into the light to feel comfortable speaking about their lived experiences. Our goal is to make sure all workers know their rights and to prevent these flagrant crimes from ever happening again,” said Rafael Ventura, Field Director for MCTF.
“The consequences of wage theft can be devastating especially for working people making a low income. Lost wages can lead to children going without dinner, rent being paid late and even homelessness. We are proud to stand with organizations like MCTF who bring low-road contractors like PCC to justice. This is a victory for working people everywhere,” said California SEIU State Council President David Huerta.