California Cartage Co.'s Customs examination facility. Courtesy photo

A Long Beach trucking company must pay $3.5 million to 1,416 employees after an investigation revealed it underpaid federally contracted warehouse workers, it was announced last week.

Investigators with the U.S. Department of Labor Wage and Hour Division found California Cartage Co. LLC—which provides trucking, warehousing and distribution services—in violation of the federal McNamara-O’Hara Service Contract Act, which requires certain government contractors and subcontractors to pay employees prevailing wages and fringe benefits.

California Cartage received federal funds for transporting cargo selected for inspection by U.S. Customs and Border Protection at a centralized examination facility at the Port of Los Angeles/Long Beach, officials said.

“No contractor receiving federal funds to provide services to the government should gain an economic advantage by paying workers below the wages and fringe benefits required by applicable law,” said Wage and Hour Division District Director Kimchi Bui. “Workers must be paid what they are legally owed for their work. Violations can be avoided, and we encourage employers to reach out to us for guidance.”

It was also discovered that California Cartage did not apply the correct wages for five subcontractors who in turn failed to pay the required wages and benefits to their employees as well.

“The contract required certain hourly rates, depending upon the positions workers held, and also required the payment of fringe benefits, holiday, and vacation time,” officials with the Labor Department said.

The investigation covered the period of Nov. 26, 2014 to Nov. 25, 2016.

Earlier this year, California Cartage’s affiliated company Cal Cartage Transportation was one of three trucking companies operating at the Los Angeles/Long Beach port complex that were hit with a lawsuit by Los Angeles City Attorney Mike Feuer.

The lawsuit alleges the company intentionally misclassified its drivers as independent contractors instead of employees to evade taxes and avoid providing them with benefits.

In February, the Long Beach City Council voted unanimously to begin addressing issues related to the misclassification of port truck drivers at the port complex.

“NFI/California Cartage has shown that they don’t care about the law. They think they can silence us warehouse workers and truck drivers by disrespecting us, making us wait every day to see if we are going to get any work, steal our wages, and retaliate against us for speaking up,” said Jose Rodriguez, a warehouse worker at NFI/California Cartage. “We won’t be silenced. We are standing up and demanding that the law is followed and that our rights are respected.”

NFI Industries, a supply chain company that acquired California Cartage and its affiliates last October, stated that settlement discussions moved quickly following the acquisition “in part because of NFI’s commitment to ensuring that its employees are compensated fairly and in compliance with all laws.”

The company says that all employees at the Carson-based facility are now paid the required prevailing wage and welfare rates, which are continually monitored to ensure compliance.

“NFI and its Cal Cartage family of companies remain committed to creating a best-in-class working environment for all of their employees throughout the United States and Canada,” the company stated.

Editor’s note: This story has been updated with a statement from NFI Industries, which acquired California Cartage last October. It has also been updated to reflect that only warehouse workers were deemed underpaid during the investigation.

Stephanie Rivera is the community engagement editor. Reach her at [email protected] or on Twitter at @StephRivera88.