The California Division of Labor Standards Enforcement (“DLSE”) and other government agencies have continued the practice of targeting specific industries with surprise audit sweeps.
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ENFORCEMENT UPDATE
California DLSE
Continues Industry Sweeps,
Several Hundred Thousand Dollars
In Fines Assessed
By Christopher W. Olmsted
The California Division of Labor Standards Enforcement (“DLSE”) and other government agencies have continued the practice of targeting specific industries with surprise audit sweeps. Recently it has raided local restaurants and auto body shops, but other industries are on its hit list.
The DLSE is a division of the Department of Industrial Relations, which oversees employment and labor regulations in California. It is common practice for the DLSE to target a specific industry in a county and hit several dozen businesses in a short period of time.
On April 9 and 10, the DLSE raided 28 San Diego auto body businesses. According to a press release, investigators issued 41 citations for labor violations – with fines totaling more than $226,000. Violations included employment of a minor under the age of 18 without proper permits and certification at one shop; failure to pay overtime at four shops; failure to pay minimum wage at two shops; failure to keep records and post labor notices as mandated by law at 16 shops; and failure to maintain workers’ compensation insurance at 18 shops.
A few days later in April, the DLSE deployed to Riverside and San Bernardino Counties. There it issued 38 citations totaling more than $207,000 in fines to 39 restaurants during a two-day enforcement sweep.
The raids have been orchestrated by an inter-agency special task force instituted by Governor Schwarzenegger in 2005. Known as the EEEC, (Economic and Employment Enforcement Coalition) the joint effort was created as a multi-agency enforcement program consisting of investigators from the Division of Labor Standards Enforcement, Division of Occupational Safety and Health, Employment Development Department, Contractor's State License Board and US Department of Labor. The primary emphasis of the EEEC is to combine the enforcement efforts of the agencies and put as many investigators into the field as possible.
Of particular concern to the EEEC is workers compensation insurance. “These shops failed to carry workers’ compensation insurance, and that’s a violation we take very seriously,” said EEEC Director David Dorame, as quoted in the press release. “In these cases, we issue work stop orders and send employees home until the business proves an active policy is in place to cover workers. By targeting enforcement against illegal operators, we help level the playing field for law abiding businesses.”
During unannounced enforcement sweeps, the EEEC targets businesses that avoid labor, tax and licensing laws, safety and health regulations and carry no workers’ compensation insurance for their employees.
EEEC is currently targeting garment, agriculture, construction, pallet, auto body, car wash and restaurant businesses. These industries have been identified as having a high incidence of workplace violations and a lack of regulatory compliance.
Employers in other industries should remain vigilant because audits are not limited to target industries, and also the targets can change without prior notice.
Practical Tips:
Ask your employment law attorney about conducting a preventative “self-audit” to catch and fix problems before the DLSE makes a surprise visit. Fines can easily range in the tens of thousands of dollars, so an ounce of prevention--in the form of a few hours preparation--is worth a pound of cure.
Proper recordkeeping and workplace posting is absolutely essential to demonstrate compliance.
If the DLSE issues a citation against your company, seek legal counsel immediately, as there may be grounds for an administrative appeal.
More Legal Update articles.
Download entire May Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2008 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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