A Rio Linda-based construction subcontractor has found itself at the center of a major labor investigation in the Bay Area, facing nearly three-quarters of a million dollars in potential fines over allegations of wage theft and labor violations.
The San Jose Department of Public Works has cited REO Mechanical, a heating, ventilation, and air conditioning (HVAC) company headquartered at 6800 Rio Linda Boulevard in Rio Linda, for multiple violations of the state labor code. The citations stem from work performed on the Mariposa Place affordable housing project in San Jose.
According to documents obtained by San José Spotlight, the assessed fines totaling $717,592 represent one of the most significant enforcement actions San Jose has issued in recent years, highlighting a growing crackdown on labor exploitation in the construction sector.
A Breakdown of the Allegations
The controversy centers on the construction of a seven-story, 80-unit apartment building located at 748-750 W. San Carlos St. in San Jose. City inspectors allege that REO Mechanical engaged in a pattern of labor violations, including:
- Late or underpayment of wages.
- Failure to contribute to workers’ 401(k) plans.
- Misclassification of workers.
- Failure to pay required “travel and subsistence” stipends.
According to the city’s notice of violation issued on October 29, the total amount of restitution directly owed to workers exceeds $225,000. The city also levied an additional fine of $42,250 for alleged late payroll submissions. When combined with penalty multipliers standard in labor code enforcement, the total assessment reached the $717,592 figure…