Dive Brief:
- A California construction contractor must pay $468,505 in back wages and damages to 137 workers after a federal investigation found violations of minimum wage and overtime laws, according to the U.S. Department of Labor.
- Newport Beach-based SCA General Contracting, along with operators Sundeep Pandhoh and Gary Tetone, failed to pay workers properly between Nov. 1, 2024, and Nov. 30, 2025, including missed payroll, unpaid overtime and retaliation against employees who complained, per the DOL.
- A U.S. District Court approved a consent judgment requiring the company to pay damages and reinstate a worker who was terminated after raising pay concerns, in violation of the Fair Labor Standards Act.
Dive Insight:
Construction Dive contacted SCA General Contracting and its legal representatives for comment but did not receive a response prior to publication.
Wage theft remains a recurring issue in construction, particularly in segments with heavy subcontracting and lower-wage labor, where oversight can be more limited, which is why legal experts advise general contractors to carefully vet subcontractors and contracts to reduce exposure to wage violations.
This is a growing concern as violations like unpaid overtime, withheld wages and improper payroll practices can affect hundreds or even thousands of construction workers.
Wage theft is closely tied to how work is organized across subcontracting layers, said Jenn Round, director of the Beyond the Bill program for the Workplace Justice Lab at Northwestern University.
“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,” Round said, pointing to what researchers describe as a “fissured workplace.”
In these structures, larger firms often set the terms of 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,” 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.”
Often, subcontracting structures can obscure responsibility, with firms higher up the chain often shielded from liability when lower-tier subcontractors fail to pay workers.
For instance, complex contracting chains can make it difficult to determine responsibility, while informal practices such as cash payments or poor recordkeeping can obscure violations. As a result, enforcement agencies may struggle to hold the most influential firms accountable, potentially allowing wage theft to continue and putting compliant contractors at a disadvantage.
