Hospital chain fined $7 million for unpaid wages

California labor officials have fined a Southern California hospital chain, Pacific Health Corp., more than $7 million for not paying employee wages and bouncing payroll checks.

The company operates the Los Angeles Metropolitan Medical Center, Tustin Hospital, Newport Specialty Hospital, Bellflower Medical Center and Anaheim General Hospital.

All of the locations were cited except the Newport Beach facility.

“Employers have an obligation to pay workers the wages they’ve earned,” said Christine Baker, director of the California Department of Industrial Relations. “Forcing employees to wait for payment or depriving them of promised benefits are illegal acts and cause unacceptable hardship.”

Calls for comment to Pacific Health’s corporate office were not answered or returned.

The company was fined $524,300 for late payments and payments with checks from accounts with insufficient funds. An additional $6.5 million in penalties was for failing to provide complete and accurate itemized wage statements to workers.

State Labor Commissioner Julie A. Su said her staff began an investigation of Pacific Health in September when an anonymous caller said Bellflower Medical Center had been bouncing checks. The labor commissioner’s office received similar complaints last month. A subsequent probe revealed that the employer was deducting premiums for benefits from employees’ paychecks but not passing the funds along to insurance providers.

The commissioner’s office has ordered Pacific Health to make payments immediately to restore employee benefits.

Pacific Health’s problem with the state is its second run-in with law enforcement agencies in less than a year. Last August the company agreed to pay the federal government $16.5 million to settle allegations that it engaged in an illegal kickback scheme.

The government charged the company with paying recruiters to deliver homeless Medicare or Medi-Cal patients by ambulance from skid row in Los Angeles to the hospitals for medical treatment that often was unneeded.

Los Angeles Doctors Hospital Inc., a Pacific Health subsidiary, agreed to plead guilty to a federal conspiracy charge related to the kickbacks, according to the U.S. attorney’s office in Los Angeles.

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