Builder Broke Labor Laws, Workers Say : Inquiry: State looking into complaints Anaheim construction company underpaid employees on publicly funded project.

State officials are investigating accusations that an Orange County construction company working for the city of Burbank violated state labor laws by underpaying workers and keeping inadequate payroll records.

Paulson Construction of Anaheim is being investigated because of complaints last month to the Division of Labor Standards Enforcement by 15 current and former employees, King Cheung, an investigator for the division, said Thursday.

Company owner Brian Paulson did not return phone calls from The Times on Thursday.

The complaints were filed with the help of a nonprofit watchdog group, the Center for Contract Compliance, which is supported by construction business and labor interests.

Under state law, workers on publicly funded construction projects must receive “prevailing wages,” which generally are interpreted as comparable to union scale, although municipalities are not required to use union labor. Paulson, which did the masonry work at a $3.2-million recycling center in Burbank, is accused of paying employees about one-third of the prevailing wages for bricklayers and helpers, called brick tenders.

Michael McGrorty of the El Monte-based Center for Contract Compliance said his group was contacted by the employees in June, just after Paulson finished work on the site. The 15 employees contend they were owed at least $47,000 in back wages, McGrorty said. He said he expects the figure to rise because a total of about 20 to 30 workers were employed by Paulson at the site.

Cheung would not comment on details of the investigation other than to say that his department would review company payroll records and interview employees. If the state finds in favor of the workers, they would be entitled to back wages. Paulson could also be fined up to $50 a day that each employee was paid improperly, Cheung said.

The complaint alleges that the employees were paid less than prevailing wages, were not paid for every hour they worked and were not paid for overtime. Some employees were paid cash, with no deductions for state and federal taxes, the complaint also alleges.

“The complaint claims there is gross underpayment,” Cheung said. “The complaint says they received only one-third to two-thirds of what they were supposed to get.”

It is not the first time the company has been accused of underpaying workers on the Burbank site. In a separate dispute in May, six employees told Burbank city officials that Paulson underpaid them.

But the company has since agreed to provide the workers with back pay, said Joy Hamilton, a public works official who oversees the project for Burbank. In such wage disputes, the city has the authority to withhold payment to the general contractor until all parties come to an agreement.

“We’ve got signed releases from the employees that they’ve been paid in full,” Hamilton said.

In both cases the accusations of underpayment center on the company’s allegedly lax records. Under state law, subcontractors on publicly funded projects must provide copies of their payrolls to the municipalities awarding the contract. But that does not guarantee the information is correct.

“Paulson did not keep written time cards,” Hamilton said. “The employees would just call in their time. That’s where the conflict is. After the contract was done, the employees said they were working more hours than the contractor was paying them.

“Because there are no time cards, it’s their word against the employers,” Hamilton said.

McGrorty said the 15 employees his group is helping were also victims of faulty record-keeping.

“The workers in question claimed to us that Paulson was not paying taxes. There is tremendous irregularity in payments,” McGrorty said. “Some people were paid in cash. Others received cash and a check. Some employees said they were given a check and told to split it with another employee.”