AG Bonta accuses California construction firm of wage theft and tax evasion – Silicon Valley

On November 28, 2024By Online Niel

California Attorney General Rob Bonta filed 31 felony charges wage theft and tax evasion against a construction company that he said cost the state and the company’s employees $2.6 million, he announced today.

Bonta filed a criminal complaint on Aug. 26, alleging that US Framing West evaded more than $2.5 million in state taxes on wages and low-paid workers at a public housing project in Cathedral City in Riverside County. The company, which builds timber frames for projects such as hotels, apartments and housing developments, shorted workers at least $40,000 when it failed to pay the prevailing wage, Bonta said.

“For some reason, US Framing West seems to think it can operate outside of California’s prevailing wage laws,” Bonta said at a news conference in Los Angeles today. “I’m here with a simple message: they can’t. No company can.”

Cal Matters contacted officials with US Framing West named it website but got no answer.

Bonta accused the company and two of its officials, Thomas Gregory English and Amelia Frazier Krebs, of wage and tax violations in Riverside, San Diego, Los Angeles, Orange, Alameda, Santa Clara, San Francisco and Contra Costa counties.

Political observers expect Bonta to announce a run for governor, so publicizing a major labor case may help him garner support from unions. Most cases of wage theft brought by the state are resolved administratively or in civil court.

Between 2018 and 2022, US Framing West hired unlicensed subcontractors and underreported its payroll to the Department of Employment Development, Bonta said. He accused the company of grand theft, payroll tax evasion, prevalent wage theft and filing false documents with the state.

US Framing West also omitted personal income tax withholding and state unemployment and disability insurance premiums, Bonta said, and submitted false payroll records for workers on Veterans Villagethe Cathedral City project. The facility opened in 2022, offering 60 units of housing and services for veterans.

The complaint says the company stole wages from 19 Riverside County workers in 2021 and 2022. California Penal Codeemployers can face grand theft charges for stealing more than $950 in wages or tips from one employee or a total of $2,350 from two or more employees in one year.

The Carpenters Regional Council of Northern California notified the state Department of Justice of potential wage theft violations at an Oakland construction project in 2019, Bonta said. The department subsequently reviewed US Framing West’s other projects in the state.

The bureau filed charges in August, and the two named defendants surrendered and were arraigned this month.

Subsidizing crime

California’s prevailing wage requirements apply to most projects built with public funding, said Matthew Miller, senior labor compliance representative for the Nor Cal Carpenters Union. He said US Framing West is working on at least four tax credit-financed housing projects.

“California taxpayers are subsidizing criminal activity in the affordable housing industry,” Miller said.

He added that developers should avoid doing business with companies that evade employment and tax laws.

Wage theft can take many forms — employers don’t pay employees for all hours worked, don’t pay minimum wage, don’t pay overtime, or don’t allow legally mandated breaks. In California, workers lose about $2 billion a year to wage theft, Bonta’s office said, and workers in low-wage industries are the hardest hit. In 2020 and 2021, workers filed claims for more than $300 million in stolen wages each year.

Lorena Gonzalez, president of the California Federation of Labor, called wage theft the “number one crime” in the burglary and theft category and said businesses should not be able to pay to get away with wage theft violations.

Originally published: Nov 27, 2024 at 9:29 am PST