California Labor Commissioner Cites Ritz-Carlton and Subcontractors $2M

The California Labor Commissioner’s Office cited the Ritz-Carlton Hotel Company LLC and three contractors more than $2 million for reportedly misclassifying 155 janitors as independent contractors at its Half Moon Bay hotel.

The citations include $1.9 million in wages and penalties payable to affected workers.

An investigation by the LCO’s Bureau of Field Enforcement reportedly found that the out-of-state contractors misclassified the janitors as independent contractors and denied them legal protections, including minimum wage, overtime, paid sick leave and workers’ compensation benefits. T

According to investigators, the Ritz-Carlton contracted with Georgia-based Empire Unistar Management Inc. to handle janitorial services from July 2021 through January 2024. Empire Unistar Management subcontracted the work to two other out-of-state companies, TK Service of Virginia and later JM Spa Group of Florida. None of these janitorial contractors were registered with the state’s mandated janitorial registration program, according to the Labor Commissioner’s Office.

The investigation was referred to the ofice by the San Mateo County District Attorney’s Office. The referral followed a worker report to Coastside Hope, a local nonprofit human services agency.

California law mandates that companies cannot outsource responsibility for worker protections. If TK Service and JM Spa fail to pay the wage assessments and penalties, under Labor Code sections 2810.3 and 238.5, both the Ritz-Carlton Hotel Company LLC and Empire Unistar Management, Inc. will be jointly liable for a total of $746,001.

Employers or contractors cited by LCO have the right to appeal citations by filing an appeal with LCO within 15 days.

Established under the Property Service Workers Protection Act, the janitorial registration program requires janitorial employers in California to register annually with the labor commissioner. Employers must also provide sexual violence and harassment prevention training every two years to supervisors and staff.

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California