Construction Law: Huge Wage Theft Citation Imposed on Construction Firm

In February 2019, the Labor Comissioner's Office issued a press release that it had assessed a $12 million fine on RDV Construction for issuing paychecks which bounced. This is the largest fine of its type imposed in California history. Following the initial actions, the company then additionally failed to compensate its more than 1000 workers in full. 

The State conducted a one-year investigation covering three years of RDV's work. The company typically worked its laborers nine hours a day without legally mandated breaks and withheld 10-25% of pay which was owed. Additional violations were assessed for excessive waiting time in issuing wages, minimum wage violations, failure to pay overtime, and improper wage statements. 

The company's CEO, Rafael Rivas, and two of his project managers were held personally liable for the company's violations. The investigation was triggered by complaints filed by the workers with the Carpenters Contractors Cooperation Committee, a non-profit labor management organization. 

The company may have little in the way of assets to pay the fine. The usual reason to form a corporation is to limit personal exposure for corporate liabilities. However, Mr. Rivas and his project managers may well have personal assets available to satisfy this judgment.

Individuals may presume that when working for, or owning stock in a corporation they will not be personally liable for the debts of the corporation. A major exception to limiting liability to the corporation is when the acts appear intentional or egregious. This is a loud warning bell to corporate officers or managers who believe they will not be liable for bad acts they commit through a corporation.