Orange County Residential Care Home Operators Pays Workers $1,100,000 For Exploitive Working Conditions Resulting in Federal Violations

LOS ANGELES, CA – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), the U.S. District Court for the Central District of California entered a consent judgment resulting in two Orange County, California, residential care home operators paying $1,100,000 in back wages and liquidated damages to 66 employees for violations of the Fair Labor Standards Act (FLSA).

The final employee payments resolve a lawsuit related to working conditions at California care homes in Lake Forest and Mission Viejo, owned and operated by Lilibeth Ortiz and her husband Geraldo Ortiz. In addition to the couple, the suit included their businesses, namely Nuzon Corp., Margaret’s Villa Inc., Fil-Lyd Investments LLC and JuanJo Investments.

WHD investigators found the employer required employees to tend to clients with developmental disabilities at all hours of the day and night, resulting in employees working more than 87 hours per week. These long hours, combined with the employers’ practice of paying their employees a flat daily rate, resulted in employees receiving pay as low as $4 per hour for all the hours that they worked, a violation of FLSA’s minimum wage and overtime provisions.

Additionally, Lilibeth Ortiz and Geraldo Ortiz violated the FLSA’s anti-retaliation provisions during litigation. In one instance, shortly after settlement talks broke down, the defendants notified their live-in employees of pending eviction and later rescinded the notices after the Department responded promptly. In another instance, the defendants and their attorneys coerced employees into signing false or misleading statements about their working conditions. Evidence showed that Lilibeth Ortiz confronted employees individually to ensure that they would meet with her attorneys to help with her defense.

“Ensuring that workers receive all of the wages they have legally earned is a priority,” said Wage and Hour Administrator Cheryl Stanton. “The resolution of this case demonstrates our commitment to protecting workers, particularly in cases that involve retaliation or intimidation, and to leveling the playing field for employers who play by the rules.”

“In addition to subjecting employees to oppressive working conditions, the defendants attempted to silence workers and prevent them from exercising their rights,” said Regional Solicitor Janet Herold, in Los Angeles, California. “Enforcement of the Fair Labor Standards Act relies on brave employees who come forward. Thankfully, they did, notwithstanding the defendants’ concerted efforts at intimidation.” 

The judgment orders Lilibeth Ortiz and Geraldo Ortiz to take specific, affirmative steps to ensure FLSA compliance. The judgment requires the defendants to ensure accurate recording of the hours worked, with a time-clock system rather than handwritten timecards used previously. The defendants must also give employees notice of their rights under the FLSA in English and in Tagalog.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the Division’s toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program.  Information is also available at www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.
WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation's workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the Fair Labor Standards Act. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis-Bacon Act and the Service Contract Act, and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.