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Dive brief:
- California construction contractor must pay $468,505 in back wages and damages to 137 workers after federal investigation verify violations of the minimum wage and overtime laws, according to the US Department of Labor.
- Newport Beach-based SCA General Contracting, along with operators Sundeep Pandhoh and Gary Tetone, failed to properly pay workers between Nov. 1, 2024 and Nov. 30, 2025, including lost paychecks, unpaid overtime and retaliation against employees who complained, according to the DOL.
- A U.S. District Court granted a consent judgment requiring the company to pay damages and reinstate a worker who was fired after raising wage concerns, in violation of the Fair Labor Standards Act.
Diving knowledge:
Construction Dive reached out to SCA General Contracting and its legal representatives for comment, but did not receive a response prior to publication.
Wage theft remains a recurring problem in construction, especially in segments with heavy subcontracting and lower-wage labor, where oversight may be more limited, so legal experts advise general contractors to carefully scrutinize subcontractors and contracts for reduce exposure to wage violations.
This is a growing concern as violations such as unpaid overtimewithheld wages and improper payroll practices can affect hundreds or even thousands of construction workers.
Wage theft is closely tied to how work is organized through layers of outsourcing, said Jenn Round, director of the Beyond the Bill program for Northwestern University’s Workplace Justice Lab.
“Wage theft persists in construction and several other low-wage industries because work often flows through layers of subcontractors, where intense price competition and thin margins create strong incentives to cut wages,” Round said, noting what researchers describe as a “cracked workplace.”
In these structures, larger companies often set the terms of the projects but are not the direct employers, leaving smaller subcontractors responsible for payroll. Workers at the bottom of these chains may also be misclassified as independent contractors, limiting access to wage protections.
Round noted that these same dynamics complicate enforcement efforts.
“They are inseparable,” he said of the industry’s structure and enforcement challenges. “The same cracked structures that lead to wage theft also make law enforcement much more difficult, because the companies that benefit most from labor are often not the ones that directly employ workers.”
Subcontracting structures can often obscure liability, with companies further up the chain often shielded from liability when lower-level subcontractors fail to pay workers.
For example, complex procurement chains can make it difficult to determine responsibility, while informal practices such as cash payments or poor record keeping can obscure wrongdoing. As a result, enforcement agencies may struggle to hold the most influential companies accountable, potentially allowing wage theft to continue and putting compliant contractors at a disadvantage.
