Please note: As of January 20, 2017, information in some news releases may be out of date or not reflect current policies.

News Release

Court rulings provide more than $1M in back wages, damages for more than two dozen Bay Area workers

Labor Dept continues to combat widespread wage abuse in local residential care field

SAN FRANCISCO – Two separate court rulings in U.S. District Court for the Northern District of California are putting more than $1 million in back wages and damages into the hands of dozens of workers denied minimum wage and overtime by the owners of nearly a dozen Bay Area residential care facilities.

In a consent judgment entered May 17, 2016, by Magistrate Judge Donna Ryu, San Miguel Homes for the Elderly of Union City agreed to pay $425,000 in back wages and damages to 26 caregivers working at its Union City facilities, and admitted to not paying minimum wage and overtime.

The action follows a U.S. Department of Labor Wage and Hour Division investigation that found egregious minimum wage and overtime violations as the company made caregivers work around the clock without paying them for all of their hours. The department filed suit against San Miguel Homes in December 2015 after the company’s owners refused to meet with division investigators, claiming that they were not obligated to comply with the Fair Labor Standards Act. In January, the division learned that the company’s owners were threatening to sue workers suspected of cooperating with the investigation, and having employees falsify timesheets.

The consent judgment also requires the company to provide adequate coverage during all shifts to eliminate employees working off the clock and to ensure the company pays employees properly for all hours worked.

In a second ruling, Judge James Donato approved a consent judgment March 7, 2016, between the department and Razel Cortez and Elizabeth Palad, owners of eight residential care facilities. The facilities are Walnut Creek Willows in Walnut Creek, Elizabeth’s Care Home 1 and 2 in South San Francisco, Samantha’s Care Home in San Bruno, New Haven Care Home in Union City, and Rayzel’s Villa and Villa San Lorenzo in San Lorenzo.

Division investigators found the employer misclassified caregivers as independent contractors, paid them a flat monthly salary well below minimum wage, provided no premium for overtime even though the employees often worked 60 hours per week, and failed to keep any records of the employees’ hours worked. The court’s order requires the homes and their owners to pay unpaid wages and damages totaling $643,992 due to minimum wage and overtime violations of the FLSA.

That consent judgment also requires the defendants to hire a third-party monitor to audit their compliance with the FLSA, to post copies of the consent judgment and notices of employee rights in both English and Tagalog at each of their facilities, to provide detailed pay stubs to every employee each pay period and direct them to review the documents, and to provide contact information for the Wage and Hour Division, in both languages, with every pay stub.

“Dozens of Bay Area residential care workers will finally receive their hard-earned back wages, and damages, thanks to these court rulings,” said Janet Herold from the department’s Solicitor’s Office in San Francisco. 

“Too many hardworking men and women who tend to the most basic needs of our loved ones continue to be shortchanged for their efforts. We aim to put a stop to that through strong enforcement of federal labor laws along with a robust outreach and education program,” said Ruben Rosalez, regional administrator for the Wage and Hour Division’s Western Region.

The department’s Wage and Hour Division continues to find violations in the residential care field, particularly in the Bay Area. In the 2015 fiscal year, its San Francisco District Office concluded more than 100 investigations of residential care facilities and nursing homes, resulting in $3 million in back wages and damages for more than 475 employees.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Agency
Wage and Hour Division
Date
July 5, 2016
Release Number
16-1129-SAN
Contact: Leo Kay
Phone Number
Contact: Jose Carnevali