A federal court has ordered Escondido-based Innovative Wall Systems Inc., which operates as Alta Drywall, to pay $790,000 after investigators uncovered widespread minimum-wage and overtime violations affecting 580 workers. Under a consent judgment, the company must cover back wages, match liquidated damages, and pay a civil penalty, and its chief executive is restricted from committing future Fair Labor Standards Act violations. The case throws a sharp federal spotlight on how drywall crews are getting paid across San Diego County.
According to a report from the U.S. Department of Labor, the Wage and Hour Division found that the employer failed to keep accurate records of hours, including pre- and post-shift work, travel between jobsites, and work on Saturdays, and did not pay the required time-and-a-half overtime rate for hours over 40 in a workweek. The agency states that the consent judgment, filed in the U.S. District Court for the Southern District of California on Sept. 12, 2025, requires Innovative Wall Systems to pay $385,000 in back wages and an equal amount in liquidated damages, along with a $20,000 civil money penalty. "Even when employers pay workers on a per-unit basis, they must track the hours those employees work and pay overtime when they exceed 40 hours in a workweek," Wage and Hour Division Assistant District Director Ginny Gomez said.
Alta Drywall denied the allegations in a statement to NBC 7 San Diego, saying it made no admissions in connection with the settlement, denies the allegations in the complaint, and has no further comment about the claims. The station reports that the federal lawsuit alleged the pay practices continued for years and affected hundreds of drywall installers who often worked long weeks. Local labor officials told NBC7 that workers frequently fear retaliation and immigration consequences, which can keep underpayment buried.
Projects Named on the Company Site
As reported by FOX 5 San Diego, Alta Drywall's website lists work on several apartment developments, including Park Boulevard Flats in East Village and the Siena and Stylus complexes in Mission Valley. The Department of Labor's release does not connect the judgment to any specific jobsites.
Why Enforcement Matters
Wage-theft cases like this are far from rare in the construction trades, where piece-rate pay and informal timekeeping can help hide overtime problems. Deputy Labor Commissioner Mabel Martinez told NBC 7 San Diego that employees often stay quiet because they fear retaliation or immigration consequences, and that state and federal offices will assist workers regardless of immigration status. Advocates say this latest judgment fits into a broader pattern of federal scrutiny on payroll practices in subcontractor-heavy construction work.
Legal Background
Court records list the case as Chavez-Deremer v. Innovative Wall Systems, Inc., case number 3:25-cv-2240, in the U.S. District Court for the Southern District of California. The docket on Justia shows that a consent judgment was entered in September 2025, with filings signed around Sept. 12. According to the court documents, the order not only requires payments to workers but also enjoins company president Jason Shane Bellamy from future FLSA violations.
Workers who believe they are owed wages can call the Wage and Hour Division helpline at 866-4US-WAGE or use the department's online compliance tools, according to a news release from the U.S. Department of Labor. The agency also directs employers to voluntary compliance programs and offers a free timesheet app intended to help prevent similar violations.
