Press Release: Systematic Wage Theft Alleged in Construction of Pasadena Housing Project

FOR IMMEDIATE RELEASE                                                                                        December 19, 2017


Lizbeth Mateo,, 310-367-7774
Caleb Soto, Esq.,, (305) 582-8868

Systematic Wage Theft Alleged in Construction of Pasadena Housing Project 

Two workers at a Pasadena housing project have filed a complaint with the Labor and Workforce Development Agency to collect up to 1 million in wages and fines.

Pasadena, CA, December 19, 2017 – Two Pasadena construction workers at an affordable housing project that is partially funded by the City of Pasadena filed a complaint on December 14, 2017 alleging “systematic wage theft” against the project’s general contractor.

The complaint by Pasadena residents Lorenzo Aragon and Bayron Lopez alleges that RAAM Construction Corp. and its agents required them and other low-wage workers to give kickbacks to the project’s foremen, failed to pay them for overtime and weekend work, denied them statutorily-required meal and rest breaks, and misclassified them as independent contractors rather than as employees.  Aragon also alleges that he was fired after he objected to the wage theft.  Lopez alleges that he quit because of the wage theft and was therefore “constructively discharged” (a legal term for quitting when working conditions are intolerable).

The Aragon-Lopez complaint, filed with the Labor and Workforce Development Agency (“LWDA”) seeks to recover, under the Private Attorneys General Act (“PAGA”), fines for both themselves and other affected workers, keep 25% of the fines, and pay 75% of them to the LWDA. The complaint alleges that RAAM and its agents are liable for more than $1 million dollars in such fines.

The Aragon-Lopez complaint provides that, among other things: “[RAAM and its agents misclassified] low-wage workers doing manual work on a housing construction project at Summit Street and Orange Grove Avenue in the City of Pasadena, California (“the Summit-Orange Grove Project”) and other sites both inside Pasadena and in other areas, failing and refusing to make required reductions from their pay, requiring them to work for no pay for overtime and weekend hours, requiring them to kickback to the contractor or its agents portions of their wages in order to preserve their jobs, failing and refusing to allow them statutorily required meal and rest breaks, failing to provide them at times any itemized pay stubs, failing at other times to provide them accurate pay stubs, and terminating their employment when they objected to Labor Code violations.  The claimants [ . . . ] courageously objected to the wage theft of the general contractor and its agents and [were] consequently discharged from employment.”

Caleb Soto, a staff attorney for the National Day Laborers Organizing Network (“NDLON”) and one of the attorneys representing Aragon and Lopez, explained that the complaint filed with the LWDA is a necessary step before bringing a lawsuit. LWDA will have 30 days from the filing date to decide whether it will prosecute the claims; if it elects to not prosecute them, then the workers’ attorneys will file an action in Los Angeles Superior Court to recover unpaid wages, damages for wrongful termination, and the fines for the violations against all of the construction workers.

Lorenzo Aragon said during today’s press conference, “all I want is justice and to be paid for the work that I did. We have families to feed and we work hard to provide for them. I think that the fair thing to do is to pay us for all the work that we did.”

Bayron Lopez expressed how difficult is for workers to speak out and said, “At first I was afraid to speak out for fear of losing my job. I thought it would be best to stay quiet, keep my head down and keep working. Now I realize that I have rights and so do all workers. We all deserve to be paid what we are owed.”

Pablo Alvarado, Executive Director of NDLON, said: “The Summit-Orange Grove Housing Project, which is being developed by Heritage Housing Partners (“HHP”), is a laudable effort by the City to address Pasadena’s affordable housing crisis. We fully support City funding of the project. However, it is unconscionable that low-income workers who are part of the class for whom the affordable housing is being developed are exploited by wage theft from a contractor’s agents during the construction of the housing.  Failing to pay workers for their time is a minimum wage violations, therefore we urge the City to also take enforcement action against RAAM and its agents for violating the City’s minimum wage ordinance and to begin to monitor more carefully all construction for which it provides any funding.”

Kimberly Douglas, co-chair of Pasadenans Organizing for Progress (POP!) stated that “our coalition of faith, labor and progressive communities organized in 2016 to improve the wage conditions for low wage workers who otherwise have little or no political leverage.  We believe a society is best measured by the conditions that prevail among those with the least.  Pasadena can and should be a fair and just community.  Our coalition is committed to that goal.”

Wage theft is a big problem, especially in low wage industries. Just this week, a study by the Economic Policy Institute revealed that the U.S. Department of Labor (DOL) recovered $2 Billion in stolen wage in 2015 and 2016. In California, $116,723,603 in stolen wages were recovered for both years by the state labor department. But as the study points out, it is just a drop in the bucket. In that context, our efforts to recover the wages of Aragon and Lopez are more important than ever.


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