Employers Jailed for Failing to Pay Back Wages

Ever wonder just how far government agencies will go to punish employers who don’t pay back wages?

As the owners of Southern California Maid Services and Carpet Cleaning Inc. found out recently, the U.S. Department of Labor (DOL) is prepared to take misbehaving employers all the way to the jail house to enforce back wage orders.

Following a lawsuit brought by the DOL, the owners of the maid service—Sergio Maldonado and Lorenza Rubio of Rolling Hills Estates—were ordered by a California court in August 2007 to pay $3.5 million in back wages and penalties to 385 of their current and former employees. The owners ignored the court’s order.

Paying Overtime: 10 Key Exemption Concepts

Only one thing really matters in the determination as to whether or not an employee is exempt: The duties the employee performs. Learn how to avoid costly, preventable mistakes with our free White Paper, Paying Overtime: 10 Key Exemption Concepts.

The DOL then obtained a contempt order from the court, and on October 30, 2009, the owners were arrested and held for 4 days at the Santa Ana jail. The owners were released following a hearing, where they were ordered to pay the entire $3.5 million by November 12 or face new contempt charges.

This case is a stark reminder that the new Labor Secretary, Hilda Solis, means to make good on her promise to come down hard on employers who fail to pay properly. With the recent addition of over 250 new wage and hour inspectors, the DOL has more resources available to not only get judgments against employers, but also enforce those judgments. Employers should expect that California’s Department of Industrial Relations will follow the DOL’s lead.