Cindy Mitchell, a contractor in the tile business for 20 years, had a hunch her competitors hadn’t been playing by the rules when she discovered some rival companies bid half the amount she did on recent projects.
Her hunch was confirmed by workers formerly employed by competitors.
“I’ve even had some of my employees tell me they have been paid in cash,” said Mitchell, president of Citadel Tile and Marble in West Sacramento. “They don’t want to report it because they don’t want to get in trouble. It makes it unfair for those who play by the rules.”
Pay violations are rampant according to Mitchell and many others struggling to compete in a cutthroat marketplace. They say companies are illegally slashing payroll expenses by paying workers in cash, skirting workers’ compensation requirements, shorting workers on overtime and violating pay rules on public works jobs. It’s done to drive down their bids to win jobs.
Complaints about such tactics are soaring even as the state rolls out a new program to fight them.
Read more: Payroll violations soar with down economy - Sacramento Business Journal