While California’s minimum wage increased earlier this year, employees from US Framing West may have been underpaid. Recently, California Attorney General Rob Bonta filed 31 felony charges of wage theft and tax evasion against the construction company, stating US Framing West owes the state and the company’s employees a total of $2.6 million.
Filing a criminal complaint on August 26th, Bonta alleges that the company failed to pay more than $2.5 million in state payroll taxes. At a conference last Tuesday, the attorney general also stated, “We also allege that, at a public works project in Cathedral City, US, Framing West also underpaid its workers by approximately $40,000,” failing to pay the prevailing wage.
US Farming West builds wood framing for hotels, apartments, and housing developments.
“For some reason, US Framing West seems to think it can operate outside the prevailing wage laws of California,” Bonta said in a recent press conference in Los Angeles. “I’m here with a simple message: They cannot. No company can.”
Details on the Charges
Along with the company, Bonta filed charges against two of its officials, Thomas Gregory English and Amelia Frazier Krebs, with wage and tax violations in Riverside, San Deigo, Los Angeles, Orange, Alameda, Santa Clara, San Francisco, and Contra Costa counties.
Bonta alleges that, between 2018 and 2022, US Framing West hired unlicensed subcontractors and underreported its payroll to the state Employment Development Department. The attorney general charged the company with grand theft, payroll tax evasion, prevailing wage theft, and filing false documents with California.
Other charges US Framing West faces include skipping personal income tax withholding and premiums for state unemployment and disability insurance. According to Bonta, the company filed false payroll records for workers on Veterans Village, the Cathedral City project that opened in 2022, offering 60 housing units and services for veterans.
Bonta also said that the company stole wages from 19 Riverside County workers during 2021 and 2022. Under California’s penal code, employers 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 within a year.
California Laws
According to a senior field representative for labor compliance for Nor Cal Carpenters Union, Matthew Miller, the prevailing wage requirements apply to most projects that are built with public funding. Miller stated that US Framing West was working on at least four housing projects financed with tax credits, expressing that developers should avoid doing business with companies that violate employment and tax laws.
“California taxpayers are subsidizing criminal activity in the affordable housing industry,” Miller said.
Bonta’s office stated that workers lose roughly $2 billion a year to wage theft, with workers in low-wage industries being the most impacted. In each year of 2020 and 2021, workers filed claims for over $300 million in stolen wages.
Wage theft can occur in various ways, such as employers not paying their staff for all hours worked, not paying the minimum wage, skipping overtime, or not allowing legally required breaks. According to the president of the California Labor Federation, Lorena Gonzalez, wage theft is “the number on crime” in the burglary and theft category, stating that companies should not be able to pay their way out of wage theft violations.
Most wage theft cases are handled administratively or in civil court after being brought to the state.
Bonta stated that the Northern California Carpenters Regional Council tipped off the state Department of Justice to potential wage theft violations at an Oakland construction project in 2019. Following the tip, the department looked into US Framing West’s other projects throughout the state.
The office filed charges in August, with both English and Krebs surrendering and arraigned in November.
Political observers believe Bonta will announce a run for governor, which would make publicizing this high-profile labor case potentially helpful in building union support.
