Attorney General Bonta Holds Contractor Liable for Unpaid Overtime and Back Payroll Taxes That Resulted from Past Relationship with Labor Broker

Amalfi Stone & Masonry Company to pay $826,000 to resolve violations of payroll tax and labor code

OAKLAND – California Attorney General Rob Bonta today announced the filing of a complaint and stipulated judgment with Amalfi Stone & Masonry Company, Inc., (Amalfi) resolving allegations of unfair competition, payroll tax and labor violations committed by Amalfi and between July 2018 and May 2020. During this period, Amalfi, a stoneware company located in Sunland, California, utilized an unlicensed, out-of-state labor broker named Fabio Anselmo through their business, MALU Company, Inc. A joint investigation with the California Department of Justice (DOJ), the Employment Development Department (EDD), and the Labor Commissioner’s Office – Criminal Investigation Unit (LCO-CIU, as part of the Department of Industrial Relations) found that Amalfi failed to report and pay payroll taxes, pay overtime, and provide itemized wage statements to workers as a result of their association with Anselmo, the labor broker. 

“Workers are the backbone of California’s economy, and all workers deserve to enjoy the fruits of their labor. The California Department of Justice will hold accountable companies who gain an unfair advantage in the market by using unscrupulous labor brokers who cut costs through wage theft or violating payroll taxes,” said Attorney General Rob Bonta. “The growing use of labor brokers makes it difficult for honest, law-abiding companies to compete, and results in the mistreatment of workers. Today’s agreement with Amalfi Stone & Masonry is an important step towards correcting payroll tax and labor code violations, and we appreciate the steps that Amalfi took to cut ties with Anselmo in 2020. My office will continue to stand up for workers and defend labor laws and wages owed for workers across the state.”

“EDD and its partners stand firmly dedicated to combating unlawful activity in the underground economy, which hurts both law-abiding businesses and California workers," said EDD Director Nancy Farias. "Our investigators will continue working in collaboration with our law enforcement counterparts to apprehend and bring wrongdoers to justice." 

 “The construction industry has joint liability laws holding companies accountable for contracting with an unlicensed contractor. In this case, the company who contracted with an unlicensed contractor will pay the owed wages to workers,” said Labor Commissioner Lilia García-Brower. “Thanks to our collaborative work with the Department of Justice and the Employment Development Department, we are able to hold companies who hire labor contractors accountable and ensure workers are protected.”

Anselmo, a Florida resident and unlicensed labor broker, acted as a labor broker for Amalfi, recruiting and paying workers on Amalfi’s behalf to work on projects in Southern California. Most of the workers were from Florida and did not know that they were entitled to overtime pay when they worked more than eight hours a day or 40 days a week. None of the wages of the workers recruited by Fabio Anselmo were reported to the Employment Development Department (EDD). In 2020, Amalfi ceased using the services of the labor broker, Fabio Anselmo, and the company has taken steps to correct its practices in accordance with labor law. The stipulated judgment filed today resolves violations against Amalfi stemming from its association with Fabio Anselmo, and as part of the agreement, Amalfi will pay restitution for the victims and repay all unpaid taxes.

As part of the stipulated judgment, which is subject to court approval, Amalfi has agreed to pay the total amount of $826,430, including $426,340 to the EDD for back payroll taxes plus interest, $280,000 to 86 workers who were recruited by Anselmo and not paid overtime wages for overtime hours, $100,000 towards a civil penalty, and $20,000 for the cost of a restitution administrator.

Attorney General Bonta is committed to defending workers' rights, workplace safety, and California's fair and competitive labor market. Through the Civil Rights Enforcement Section, the Worker Rights and Fair Labor Section, and the Antitrust Law Section, Attorney General Bonta enforces California’s laws to protect the welfare of California workers and legitimate businesses operating in California. In 2024, Attorney General Bonta took action by defending wages and overtime owed in the West Coast Drywall Lawsuit. In 2023, Attorney General Bonta took action to protect workers, launching an historic investigation into gender discrimination in the National Football League, joined 17 attorneys general in supporting the Federal Trade Commission’s proposed rule limiting noncompete agreements, fought for the rights of transportation workers, and immigrant children. In November 2022, Attorney General Bonta joined 21 attorneys general in filing an amicus brief opposing McDonald’s attempt to evade liability for past alleged efforts to stifle competition and undercut wages through the use of “no-poach” agreements. In October 2022, Attorney General Bonta filed an amicus brief in an effort to protect Californians from discrimination in the employment hiring process. 

A copy of the complaint is available here and stipulated judgment pending court approval is available here.