Labor & Employment

Calif. Sues Janitor Cos., Claims 'Flagrant' Independent Contractor Abuses

In an apparent escalation of an ongoing effort to police companies that misclassify employees as independent contractors, two California agencies have announced joint litigation against two janitorial companies that send workers to restaurants in multiple counties.

In the first lawsuits resulting from a coordinated effort by Jerry Brown, the state attorney general, and the state Labor and Workforce Development Agency, the state has filed suit against Excell Cleaning and Building Services Inc. and MO Restaurant Cleaning Services of California Inc., alleging “flagrant” violation of labor laws requiring employees to be paid the minimum wage and overtime and provided with state-mandated breaks, among other issues. By coordinating on the cases, the two agencies can seek greater penalties against the defendant companies, if the suits are successful, according to the Los Angeles Times.

“In recent years, regulators in California and other states have stepped up oversight of companies that illegally classify delivery drivers, couriers, home care workers and other employees as independent contractors to dodge a number of workplace laws,” the newspaper explains. “Switching to the independent contractor model can save employers 30 percent to 40 percent in labor costs, allowing them to undercut competitors with conventional employees.”

As discussed in an earlier post about an unrelated case concerning delivery drivers, such cases can also pose significant issues for employers concerning the payment of social security taxes, unemployment and workers’ compensation benefits.

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