Santa Ana—The Labor Commissioner’s Office has cited Anaheim-based Inventory Professionals Inc. $1,651,627 for wage theft violations affecting 64 workers. The citations also hold Trader Joe’s and Grocery Outlet each liable for $825,813 as client employers.
Inventory Professionals Inc. workers are due $1,608,727 in minimum wages, overtime, liquidated damages and waiting time penalties. The company has also been fined $42,900 in civil penalties. All three employers have appealed the citations.
Labor Commissioner Lilia García-Brower, said, “State law prohibits employers from entering into a contract that does not include sufficient funds to pay required wages. Entities who contract with the lowest bidder should be aware that they will be held liable if that vendor cuts corners by committing wage theft.”
Investigators found the 64 workers, who went aisle by aisle and counted all items in more than 300 Grocery Outlet and Trader Joe’s stores statewide, worked approximately 65 hours a week during a three-year period ending in August 2018 and were not paid the minimum or overtime wages due.
The investigation also found that two minors, aged 14 and 17, worked until 2 a.m. in violation of California’s child labor laws.
Inventory Professionals Inc. owner Arun D. Gandhi is held jointly and severally liable for the full citation amount due, which includes $550,033 in unpaid minimum wages, $262,871 in unpaid overtime, $645,937 in liquidated damages and $149,885 in waiting time penalties.
Inventory Professionals Inc. was also fined $1,500 for its failure to secure minors’ work permits or maintain records on the minors as required by law.
Trader Joe’s and Grocery Outlet are responsible per California’s client-employer liability law, in effect since 2015. The law holds client employers that obtain labor from a subcontractor liable for their workplace violations.
A client employer may have to pay for the subcontractor’s owed wages, damages, and penalties, as well as workers’ compensation violations.
The investigation was initiated after workers filed labor law violation reports with the Labor Commissioner’s Office.
Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime, and other labor law violations and calculate payments owed and penalties due.