CA Labor Commissioner sues property developers in Beverly Hills for unpaid wages and penalties

The California Labor Commissioner is suing a group of property developers to collect $431,421 in unpaid wages and penalties owed to 23 workers who renovated a luxury property at 1712 Tropical Avenue in Beverly Hills, and were not paid for their work. 

The suit includes a mechanic’s lien against the property seeking $184,232 for the unpaid labor performed by the workers, plus $247,190 in statutory penalties.

Named in the lawsuit are four limited liability companies (LLCs): 1712 Tropical LLC, Eastwind Financial LLC, SBW Capital Partners LLC and Woodberry Square Center LLC, as well as Charles Infante and Danilo Reyes, two individuals without contractors’ licenses who hired the workers on behalf of the property owners.

“Workers deserve to be paid for all the work they do, regardless of their employers’ business model – it’s unconscionable that these workers’ wages were stolen,” said Labor Commissioner Lilia García-Brower. “My office is using every tool available to ensure they receive what they are owed.”

The Labor Commissioner’s Office began its investigation after the workers filed wage claims. The investigation found that 1712 Tropical LLC purchased the property in July 2018 for $5.1 million, and subsequently added the other LLCs with ownership interests.

The LLCs engaged the two unlicensed contractors, who then hired the workers to perform all the construction and improvements to the property. The renovated property was subsequently sold for $10 million last July. 

The workers were not paid for all of their hours worked, with some workers performing up to eight weeks of unpaid labor between February 1 and May 1, 2020. They are seeking to recover unpaid minimum wages, liquidated damages, regular wages and waiting time penalties.

The mechanic’s lien is an important collection tool for construction laborers who have suffered wage theft. Since 1879, the California Constitution has guaranteed the right of construction workers to obtain a court-ordered sale of property that they have worked on in order to recover unpaid wages, even if hired by a subcontractor.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid minimum wages plus interest. Waiting time penalties are imposed when the employer intentionally fails to pay all wages due to the employee at the time of separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days.

The Department of Industrial Relations’ Division of Labor Standards Enforcement, or the California Labor Commissioner’s Office, combats wage theft and unfair competition by investigating allegations of illegal and unfair business practices.

The Labor Commissioner’s Office in 2020 launched an interdisciplinary outreach campaign, “Reaching Every Californian.” The campaign amplifies basic protections and builds pathways to impacted populations so that workers and employers understand legal protections, obligations and how to defend them.