LA Garment Maker, 5 Plus 2, Cited $282k for Wage and Employment Violations

07/09/2013 // Keller Grover LLP // Keller Grover, LLP // (press release)

You can try to run from California Labor Commissioner Julie A. Su, but she proved that you can’t hide. A Los Angeles garment maker who moved and changed its business name in an attempt to avoid previous labor law violations, has hit a dead end and must pay $282,582 for failing to pay 19 workers minimum wage and overtime in violation of wage and hour rules, reports Los Angeles wage and hour lawyer Eric Grover.

The garment maker, 5 Plus 2, Inc., was fined for paying its 19 workers below minimum wage and for failure to pay overtime wages. In addition, the garments made at 5 Plus 2 were confiscated because they failed to properly register the business, as required by labor laws.

“This case demonstrates our commitment not just to addressing wage theft but also to cracking down on the shell games used to avoid detection,” said Labor Commissioner Su. “A phenomenon of the underground economy is the practice of employers who, when caught breaking the law, close down that business in name only and operate another phantom one under someone else’s name. This practice is intended to avoid responsibilities to workers and undercuts honest employers. We are conducting in-depth investigations to uncover and put a stop to these abusive practices.”

The citations were issued following a May 28 inspection of the 5 Plus 2, Inc. facility in Los Angeles. As a result of the investigation it was discovered that Yeong Sil Kim was also the owner of Bultina Fashion, Inc., which had been cited $26,750 in February 2011. Kim failed to pay for the violations and did not respond to a request for information regarding the outstanding payments to employees. Following the citations and inspection in 2011, Bultina moved its operation from its previous address, the Labor Commission revealed.

During the August 2012 investigation of 5 Plus 2, investigators interviewed employees and discovered that the owner of record, So Hye Park, was not the one exercising control over the employees. Instead, the employees confirmed they were working for Kim who was acting as the owner/manager of Bultina Fashion.

At 5 Plus 2, employees were paid by the piece. Although that is not a problem in and of itself, there were no time cards or records to verify hours worked and the pay they received.

The Labor Commission issued had previously $18,900 in fines and 5 Plus 2 promptly filed an appeal. But because the employer did not appear at the appeal hearing, the citations stood.

An audit of wages owed to workers was conducted by the Labor Commissioner’s office, and 150 articles of clothing were confiscated, as a result of failure to register with the Labor Commissioner’s office (Labor Code 2675). Kim then acknowledged being the true owner of 5 Plus 2.

“No matter how you’re paid—hourly or by the piece—employers must keep accurate records and require their employees to clock in and out of work. For employees a time card is their proof of the hours they worked, which is the only way to guarantee that they get paid what they are entitled to under wage and hour laws. It is against the law for employers to not document employee’s time on the job, as 5 Plus 2 did. Failure to keep accurate and clear documentation of an employee’s time facilitates wage theft by employers who often try to take advantage of piece workers and avoid paying them what they’re rightfully owed,” says Los Angeles employment lawyer Eric Grover.

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