Southern California grocery chains Albertsons, Ralphs and Vons have agreed to pay $22.4 million to settle a class-action lawsuit filed by janitors who were illegally misclassified as independent contractors so that their employers could avoid complying with California wage and hour laws. The scheme called for the janitors to be characterized as "subcontractors" for Building One Service Solutions, a now-bankrupt janitorial service that "rented" the workers, mostly poor hispanic men, to the stores. The janitors did not provide their own tools, and worked on a schedule under the direct supervision of store managers. In every respect, they were treated as employees, except when it came time for things such as overtime pay, breaks and other rights that employees have, but independent contractors don't.
The money will be among more than 2,000 janitors who were employed from 1994 to 2001. Each worker will receive up to $9,300, depending on where they worked and for how long.
The misclassification of independent contractors is a common way for employers to avoid paying overtime, employer's share of payroll taxes, and unemployment benefits, as well as to avoid giving meal and rest periods to their workers. If you work as an independent contractor in the State of California and would like to have your situation reviewed to see if you have a claim, drop us an email and we would be happy to give you a free evaluation.