A California construction contractor has been ordered to pay nearly half a million dollars in back wages and damages following a federal investigation that uncovered widespread labor violations, according to the U.S. Department of Labor.
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The case involves SCA General Contracting, based in Newport Beach, along with operators Sundeep Pandhoh and Gary Tetone. The company must pay $468,505 to 137 workers for violations that occurred between Nov. 1, 2024, and Nov. 30, 2025.
The Department of Labor found that the contractor failed to properly compensate workers, citing missed payroll, unpaid overtime and retaliation against employees who raised concerns about their pay.
A U.S. District Court approved a consent judgment requiring the company to pay damages and reinstate a worker who had been terminated after complaining about wages. The ruling determined that the company’s actions violated the Fair Labor Standards Act, which sets standards for minimum wage, overtime pay and worker protections.
Construction Dive reported that the company and its legal representatives did not respond to requests for comment prior to publication.
Labor experts say the case highlights ongoing challenges within the construction industry, where wage theft remains a recurring issue, particularly in sectors reliant on subcontracting and lower-wage labor.
“Wage theft persists in construction and in a number of other low-wage industries because work is often pushed through layers of subcontractors, where intense price competition and thin margins create strong incentives to cut corners on pay,” said Jenn Round, director of the Beyond the Bill program at the Workplace Justice Lab at Northwestern University.
Round pointed to what researchers describe as a “fissured workplace,” in which larger firms oversee projects but are not the direct employers, leaving smaller subcontractors responsible for payroll compliance.
“They are inseparable,” she said of industry structure and enforcement challenges. “The same fissured structures that drive wage theft also make it much harder to enforce the law, because the companies that benefit most from the work are often not the ones directly employing the workers.”
In such arrangements, workers may also be misclassified as independent contractors, limiting access to wage protections and benefits. Complex contracting chains can obscure responsibility, making it difficult for enforcement agencies to hold the appropriate parties accountable.
Industry observers note that informal payment practices and poor recordkeeping can further complicate enforcement efforts, allowing violations to persist and placing compliant contractors at a competitive disadvantage.
The case serves as a reminder for general contractors to carefully vet subcontractors and ensure compliance with labor laws, as enforcement actions continue to target wage violations across the construction sector.
Originally reported by Keith Loria in Construction Dive.
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