Los Angeles--For the first time in the history of the Labor Commissioner’s Office, a settlement was reached over charges that a contractor did not provide adequate funds to a subcontractor resulting in employees being deprived of contributions to social security, disability and unemployment insurance. Tidy Building Services, Inc., based in New Orleans, has agreed to pay the state of California $100,000 on behalf of employees who worked in janitorial services in San Diego County and the Los Angeles area. California Labor Commissioner Angela Bradstreet filed the complaint in San Diego County Superior Court in March, 2008.

This is the state’s first lawsuit to enforce Labor Code section 2810, which makes it illegal to subcontract janitorial and other services without providing sufficient funding to allow the subcontractor to comply with all laws or regulations. Employees who are affected by the unlawful practice are entitled to recover damages.

“This settlement sends a strong message that my office will aggressively pursue contractors who seek to gain an unfair advantage by underfunding subcontracts,“ said Bradstreet, “The subcontractors get squeezed, the workers don’t get paid, and law-abiding contractors lose out as well through unfair competition.”

More than 200 employees will receive between $100 and $2,000 each in compensation as part of the settlement. The settlement provides that payment will be made by the end of this month. (please click link to read full story)