Don’t Mess with Taxes err Texas or California for that matter!

State Agencies stick together and clean-up!

What started off as an inquiry of a complaint against two janitorial company’s for cheating its workers out of overtime quickly revealed not so squeaky clean business practices. After an extensive investigation both employers were charged with evading payroll taxes, failure to pay minimum wage and overtime for more than 300 California janitorial workers. The investigation also revealed workers were intentionally misclassified as independent contractors to avoid paying nearly $250,000.00 in payroll taxes.

On April 17 the janitorial duo were ordered to pay $13 Million dollars after a judgment was handed down to Excell Cleaning and M.O. Restaurant Cleaning of California. The companies were caught by California Labor Commissioner Angela Bradstreet and Attorney General Edmund G. Brown who decided to team up to catch tax cheats. “As Labor Commissioner, my top priorities include protecting workers and targeting these kinds of companies that operate in the underground economy,” said Bradstreet. “These illegal operations undercut legitimate businesses and are damaging to our state’s economy.” The shadow workforce investigation revealed employees were required to work over eight hour days, seven days a week at a flat rate of $50.00 per day!

The $13 million dollar judgment is a clear and strong message to employers. The States have zero tolerance for tax cheats. Bottom line…do it right or get ready pay!