Court orders California construction contractor to pay $770K in back wages, damages after federal investigation finds minimum wage, overtime violations

ESCONDIDO, CA – The U.S. Department of Labor has obtained a consent judgment requiring an Escondido drywall construction contractor to pay $790,000 in back wages, damages, and penalties after a federal investigation found the employer failed to pay the federally required minimum wage and overtime to 580 workers.

The court action follows an investigation by the department’s Wage and Hour Division into Innovative Wall Systems Inc. – operating as Alta Drywall. Federal investigators found that the employer did not accurately keep records of hours worked, including pre- and post-shift work, travel between jobsites, or work performed on Saturdays. The employer also neglected to pay workers the required overtime rate of time-and-one-half for all hours worked over 40 in a workweek, resulting in Fair Labor Standards Act minimum wage and overtime violations.

“Even when employers pay workers on a per-unit basis, they must track the hours those employees work and pay overtime when they exceed 40 hours in a workweek,” said Wage and Hour Division Assistant District Director Ginny Gomez in Sacramento. 

Filed in the U.S. District Court for the Southern District of California on Sept. 12, 2025, the order enjoins Innovative Wall Systems Inc. and president and chief executive officer Jason Shane Bellamy, from future FLSA violations and requires them to pay the affected employees $385,000 in back wages and an equal amount in liquidated damages. In addition, the employer must pay a $20,000 civil money penalty for the willful nature of the violations.

“This consent judgment and order send a strong message that the Department of Labor will exercise its full enforcement authority when employees are paid well below their legally earned wages,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The Solicitor’s Office will seek all relief available under the Fair Labor Standards Act when we face employers – like those here – that falsify payroll records to attempt to hide overtime violations.”

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Employers and workers can call the division with questions and requests for compliance assistance at its toll-free helpline, 866-4US-WAGE (487-9243).

Employers are encouraged to use the agency’s industry-specific compliance assistance toolkits to learn about their responsibilities under the laws enforced by the division. The agency’s PAID program offers employers an opportunity to self-report and resolve potential minimum wage and overtime violations under the Fair Labor Standards Act, as well as certain potential violations under the Family and Medical Leave Act.

Download the agency’s free timesheet app, available for Android and iOS devices, to track hours and pay.