The California Labor Commissioner's Office has slapped hefty fines on the Ritz-Carlton Hotel Company and its subcontractors for misclassifying workers, citing more than $2 million in penalties and unpaid wages for 155 janitors. According to a recent report by the Department of Industrial Relations, these janitors, working at the upscale Half Moon Bay hotel, were wrongly labeled as independent contractors, stripping them of fundamental labor rights such as minimum wage, overtime pay, paid sick leave, and workers' compensation.
Investigations by the Labor Commissioner's Bureau of Field Enforcement uncovered that the Ritz-Carlton contracted with Empire Unistar Management Inc., a Georgia-based firm not currently registered with the state's mandated janitorial registration program, from July 2021 to January 2024. These subcontractors further passed work along to other out-of-state companies, such as TK Service of Virginia and later JM Spa Group of Florida, which were also unregistered with the program. This chain of subcontracting has been identified as a method used by employers to circumvent California labor laws, a move condemned by Labor Commissioner Lilia García-Brower, who stated, per the Department of Industrial Relations, "We've seen this pattern before, employers hire or contract with out-of-state janitorial companies, thinking they can sidestep California labor laws."
The situation came to light after a worker's complaint via Coastside Hope, a local nonprofit that assisted in interviews and supported workers, propelling the San Mateo County District Attorney’s Office to refer the case to the Labor Commissioner. According to the California Labor Commissioner's Office, this is part of a broader problem in the subcontracted janitorial industry, which is characterized by low wages and heightened labor violations. The state's janitorial registration program and strengthened joint employer accountability laws are efforts to combat such industry malpractices and protect workers.
If the principal contractors fail to remedy the wage and penalty assessments, California law holds that the Ritz-Carlton and Empire Unistar Management will be jointly liable for a substantial amount, totaling $746,001.
