Long Beach Convention Center subcontractor accused of wage theft, tax evasion

A union representing hospitality workers has accused an event management company subcontracted by the Long Beach Convention Center of underpaying workers and potentially skirting payroll taxes.

The union, Unite Here Local 11, filed a complaint with the California Labor Commissioner’s office Thursday alleging that 1Fifty1 Inc., based in Costa Mesa, paid convention workers under the table with cash in envelopes.

ASM Global, which manages the city-owned convention center, subcontracts several staffing agencies whose employees make up the convention center’s workforce, in addition to workers it hires directly. ASM Global contracted with 1Fifty1 to provide workers to clean public areas such as bathrooms, break down and set up event spaces and perform groundskeeping since at least 2023, according to the complaint.

The cash payments appear to be in violation of labor laws that require workers be provided with their payment an itemized statement showing wages earned, total hours worked, tax deductions and other information, the complaint said.

The absence of pay stubs “raises questions about whether 1Fifty1 deducts employment taxes from its employees’ wages, as is required by federal and state law,” the complaint said.

The complaint also alleges 1Fifty1 engaged in wage theft by failing to pay some employees the minimum wage for Long Beach concessionaire workers, currently set at $17.97, as well as overtime wages for employees who worked seven- or eight-hour shifts seven days a week.

The union has been locked in contract negotiations with ASM Global since the bargaining agreement for workers directly employed by the company expired about about seven months ago.

The union’s inquiry has already prompted action. Stacey Escudero, a spokesperson for ASM Global, said the company had moved to terminate its contract with 1Fifty1 Wednesday night.

Long Beach City Manager Tom Modica said in a statement that elements of the union’s allegations were provided to the city on Wednesday and the city “immediately requested ASM investigate.”

“Long Beach fully supports paying workers according to state and federal law, and supports any outside review conducted by the Department of Industrial Relations for any employee who feels that pay is not being allocated per state law,” Modica said.

“We disagree with all of the statements in the letter. None of these allegations are true. We are in communications with the Convention Center to assure they know the truth and know they do not need to take these false allegations seriously. We are proud of our long-standing record of excellence and maintaining the highest standard of service for our clients and our workers,” Vincent Capizzi, chief executive officer of 1Fifty1, said in an email.

For months, Unite Here Local 11 had raised concerns to ASM Global broadly about its use of contractors, which the union argues tend to provide less pay and fewer job protections and benefits, undermining employees who are directly employed, said union co-president Kurt Petersen.

“It should not have taken this long,” Petersen said. “Now we need to make sure those workers have a good job at the convention center.”

Petersen said 1Fifty1 employees who worked at the convention center who have lost their jobs should be hired by ASM Global. The workers have preferential hiring rights under Long Beach’s concession worker retention ordinance.

The union compiled its complaint based on conversations its staff had with several 1Fifty1 workers in recent days as well as a video of cash payments made.

The video, captured by union staff last week and reviewed by The Times, shows a man wearing a black-and-white vest — the uniform for 1Fifty1 workers — receiving an envelope from a woman seated at a desk in an office. The man opens the envelope to show a slim bundle of cash.

The rate ASM Global paid 1Fifty1 for its services was higher than other convention center subcontractors, according to documents ASM Global provided the union in response to information requests during its negotiations.

1Fifty1 billed ASM Global $30 an hour for 145,422 hours in 2024, a total charge of more than $4 million. By contrast, ASM Global paid subcontractors that provided cooks no more than $26.60 an hour, a position that is typically more expensive to employ than workers performing general cleaning work, according to the union’s complaint and documents reviewed by The Times.

1Fifty1 employees the union spoke to earned between $17 and $19 an hour, meaning that 1Fifty1 probably charged ASM Global and the city of Long Beach a more than 60% markup for its workers’ services, according to the complaint.

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