Brown investigation finds violations of labor laws

By Kathy Woods | Mar 4, 2010

Jerry Brown (D)

SACRAMENTO, Calif. (Legal Newsline)-California Attorney General Jerry Brown filed a lawsuit Wednesday against Country Builders Inc. for allegedly violating the state's labor laws.

The lawsuit alleges that the company engaged in unfair business practices, a statement said.

During his investigation of Country Builders, a Livermore-based company, Brown said he found that the company "cheated workers out of wages," falsified the company's payroll records to hide underpayments, deliberately misclassified workers to reduce the company's workers' compensation premiums and violated state prevailing wage laws.

The investigation was launched in 2008 to find out why some worker's were receiving fewer wages than what was shown on their check stubs.

The state has a prevailing wage law that requires workers on public work projects to be paid in accordance with the rates established by the California Department of Labor Standards Enforcement.

The rate required under California law is $32 to $34 per hour. The investigation found that the company was inflating the pay rate of some workers to lower its workers' compensation premiums.

"Country Builders cheated its workers out of wages and falsified payroll records," Brown said. "This is an outrageous case about a company that took public money and then cooked its books to shortchange the state's workers' compensation fund."

Brown's investigation revealed that Country Builders saved $1 million in wages and underpaid its premiums to the State Compensation Insurance Fund by at least $136,000.

Brown is seeking relief in the form of permanent injunction against the company and restitution for the workers.

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