News Release

US Department of Labor obtains judgment ordering California adult care provider to pay $690K in back wages, damages to 108 workers

Neldy’s Adult Residential Care Home’s history of wage violations continues

GARDEN GROVE, CA – A federal court has approved a consent judgment ordering a Southern California adult care provider with a history of labor violations to pay $690,696 to 108 employees after the U.S. Department of Labor recently found the Garden Grove-based employer denied workers all their earned wages.

The Dec. 14, 2022, action by the U.S. District Court for the Central District of California follows the discovery by the department’s Wage and Hour Division that Neldy’s R.C. Inc., operating as Neldy’s Adult Residential Care Home, purposely did not combine all hours worked and paid the affected employees with multiple paychecks to hide their illegal practices. Division investigators also found Neldy’s deducted meal breaks from workers’ wages when their duties required them to work during their breaks, and failed to keep time and payroll records as required.

Specifically, the court ordered Neldy’s R.C. Inc. to pay $345,348 in back wages and an equal amount in liquidated damages to the affected workers, and $25,000 in civil money penalties for its willful violations of the Fair Labor Standards Act. The order also permanently prohibits the care provider from committing future FLSA violations at its 12 locations in Orange and Riverside counties.

“The court’s action and our investigation send a clear message to unscrupulous care industry employers that we will hold them accountable for their attempts to exploit their workers and deprive them of their hard-earned wages,” said Wage and Hour Division District Director Min Park-Chung in San Diego. “The fact that the operator of Neldy’s Adult Residential Care Home continues to abuse their workers’ rights so blatantly despite their prior violations is truly appalling.”

Prior investigations into the company’s pay practices from 2013 through 2016 led to the department’s recovery of $1,069,730 for 58 workers, following the discovery that Neldy’s R.C. Inc. violated minimum wage and overtime provisions in the FLSA.

The department’s Wage and Hour Division San Diego District Office conducted the investigation, and attorneys with the department’s Office of the Solicitor negotiated a resolution of the investigation and the terms of the consent judgment.

“The U.S. Department of Labor has shown again that we will follow all legal avenues to protect the rights of workers when we find shameless employers abusing them,” said Regional Solicitor Marc Pilotin in San Francisco. “Enforcing the law and stopping wage theft is a priority for us.”

In fiscal year 2021, the division recovered $13.8 million in back wages for more than 17,000 workers in the U.S. healthcare industry, one in which low wages and high rates of violations are common. As the U.S. population ages and demand for home healthcare services increases, employment in a variety of healthcare sectors is projected to grow 16 percent from 2020 to 2030 – faster than the average for all occupations – adding about 2.6 million new jobs. 

The division enforces the law regardless of where a worker is from and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). 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. Download the agency’s new Timesheet App for i-OS and Android devices to ensure hours and pay are accurate.

Read this news release En Español

Agency
Wage and Hour Division
Date
January 10, 2023
Release Number
22-2367-SAN
Media Contact: Michael Petersen
Media Contact: Jose Carnevali
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