California Contractor Ordered to Pay $468K in Wage Theft Case

May 19, 2026

By: Wiss Team

Wiss Team

A Newport Beach, California, construction contractor has been ordered to pay $468,505 in back wages and damages to 137 workers following a federal investigation into wage-and-hour violations, according to the U.S. Department of Labor.

SCA General Contracting, along with operators Sundeep Pandhoh and Gary Tetone, failed to pay workers in compliance with federal minimum wage and overtime laws between November 1, 2024, and November 30, 2025. Violations included missed payroll, unpaid overtime, and retaliation against workers who raised pay concerns, per the DOL. A U.S. District Court approved a consent judgment requiring the company to pay damages and reinstate a worker terminated after complaining about compensation practices, in violation of the Fair Labor Standards Act.

Construction Dive, which first reported the case on April 20, 2026, noted that SCA General Contracting and its legal representatives did not respond to requests for comment prior to publication.

A Persistent Pattern in Construction

Wage theft is not a new problem in the construction industry, but cases of this scale draw attention to structural conditions that legal experts say make violations both common and difficult to remedy.

Jenn Round, director of the Beyond the Bill program for the Workplace Justice Lab at Northwestern University, told Construction Dive that the issue is deeply embedded in how construction work is organized.

“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.

The concept Round references is what researchers call the “fissured workplace,” a structure in which larger firms set project terms and pricing but are not the direct employers of the workers performing the work. Smaller subcontractors at lower tiers of the chain carry the payroll obligation, often under significant cost pressure. Workers at the bottom of those chains may also be misclassified as independent contractors, which limits their access to the wage protections afforded to employees under federal and state law.

Enforcement Challenges in Layered Contracting Structures

The same structural dynamics that create conditions for wage theft also complicate efforts to address it, Round noted.

“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,” she told Construction Dive.

Complex contracting chains can obscure accountability at each tier. Firms higher in the chain are typically not the direct employers of lower-tier workers, and are often shielded from direct liability when those workers are not paid properly. Informal payment practices, poor recordkeeping, and cash transactions at the subcontractor level can make violations difficult to detect and harder to prove during enforcement proceedings.

Legal experts advise general contractors to carefully vet subcontractors and review contract terms for provisions that may reduce exposure to downstream wage violations. Construction Dive noted that enforcement agencies can face difficulty holding the most influential firms accountable when subcontracting structures obscure who is responsible for payroll at each level, a dynamic that can put compliant contractors at a competitive disadvantage relative to those cutting costs through improper pay practices.

Regulatory and Financial Context

The Fair Labor Standards Act establishes federal minimum wage and overtime requirements for covered employees. Violations can result in back wage liability, liquidated damages equal to the amount of unpaid wages, civil money penalties, and, in cases involving retaliation, reinstatement orders and additional damages. The consent judgment in the SCA General Contracting case required both payment of wages and reinstatement of the terminated worker, reflecting the full scope of remedies available under the FLSA.

The DOL’s Wage and Hour Division, which conducted the investigation, has the authority to pursue civil enforcement actions under the FLSA. Consent judgments entered in the U.S. District Court carry the force of a court order and are legally binding on all named parties.

The case is the latest in a series of wage enforcement actions affecting construction firms, a sector that legal experts and labor researchers consistently identify as among the most vulnerable to wage violations due to the volume of subcontracting activity, the prevalence of lower-wage labor, and the limited oversight that can accompany complex project delivery structures.

Source: Construction Dive, “California contractor ordered to pay $468K in wage theft case,” by Keith Loria, published April 20, 2026.