Purchasing and Contracting
Living Wage Program

August 11, 2016

VIA EMAIL

Mr. Johnson Le, Chief Executive Officer
Prizm Janitorial Services, Inc.
555 Country Club Lane, Suite C-196
Escondido, CA 92026
Dear Mr. Le:
Subject: Notice of Investigation of Living Wage Complaint #C17-002-Prizm Janitorial Services
The City of San Diego Living Wage Program received a Living Wage Ordinance [LWO]
Complaint alleging violations of the LWO by Prizm Janitorial Services on your janitorial
services contracts with the City of San Diego.
Specifically, this complaint alleges Prizm Janitorial Services:
 Does not pay LWO wages and benefits.
 Does not pay LWO compensated leave time to covered employees.
 Does not pay employees for all hours worked on covered contracts.
 Does not inform employees of their rights under the LWO.
 Does not properly classify workers as company employees and misclassifies them as
independent contractors.
 Does not comply with State law by paying some employees in cash without providing
pay statements.
San Diego Municipal Code [SDMC] section 22.4230(e) requires the City to investigate every
LWO Employee Complaint to determine whether or not a violation has occurred. To assist in
this investigation, within ten (10) business days, Prizm Janitorial Services must submit to this
office the following:
1)

Payroll records for the period from April 1, 2014 through August 9, 2016.
Records must comply with CA Labor Code Section 226(a) [Attachment] and include
employees from any sub-contractor(s) and show:
•Name for each covered employee who performed work on the subject contracts from
April 1, 2014 through August 9, 2016;
•Hourly wage rate paid to each covered employee in each pay period;
•Number of hours each covered employee worked in each pay period;
•Compensated leave time earned by each covered employee in each pay period; and
•Compensated leave time used by each covered employee in each pay period.

1200 Third Ave Suite 200
SAN DIEGO, CA 92101
MAlano@sandiego.gov

·

T (619) 236-6172
sandiego.gov

 2)

Records of compensated leave time for covered employees who performed work on the
subject contracts April 1, 2014 through August 9, 2016:
•Describe the firm’s method to accurately track compensated leave for covered
employees (25 hours LWO work = 1 hour compensated leave);
•If accrued leave time is not listed on pay statements, describe how employees are
informed of the total hours of accrued and used; and
•Provide a record of requests granted and denied for non-compensated leave time.

3)

If health benefits are provided to covered employees for your firm as a portion of the
Living Wage rate, submit:
•Copy of the health insurance policy with evidence of its premium costs (such as invoice
payment records);
•Names of employees covered by this policy who performed work on the subject
contracts from April 1, 2014 through August 9, 2016, and evidence of their enrollment
in a health insurance policy; and
•Proof of premium cost per hour for employees (if this cost is less than the current rate
of $2.45/hour, describe your firm’s method to address the difference in cost).

4)

Copies of California Employment Development Department Quarterly Contribution
Return and Report of Wages (Continuation) form DE9C, for your firm’s from April 1,
2014 through August 9, 2016.

5)

Evidence of the method used by your firm to provide notifications to covered employees
in accordance with SDMC section 22.4225(b):
•Describe how the firm annually distributes the Living Wage Ordinance Notice to
Employees; and
•Describe how the firm notifies its covered employees of the possible availability of
health insurance coverage under the Affordable Care Act and the possible availability
of the Earned Income Tax Credit.
5) Evidence of compensated leave earned by all covered employees for hours worked
on the subject contracts from April 1, 2014 through August 9, 2016; such
compensated leave is required in accordance with SDMC section 22.4220(c)

Please note, the LWO includes the following provision [SDMC section 22.4230(d)]:
A covered employer shall not:
(1) Retaliate against a covered employee who alleges non-compliance with this
Division or cooperates with an investigation regarding compliance with this
Division. Retaliation includes but is not limited to unfair immigration-related
practices, or any other discriminatory practice that violates federal or state law;
or

 (2) Discharge, reduce in compensation, or otherwise discriminate against any covered
employee for complaining with regard to the covered employer’s practices with respect
to this Division, for opposing any practice proscribed by this Division, for
participating in proceedings related to this Division, for seeking to enforce his or her
rights under this Division by any lawful means, or for otherwise asserting rights
under this Division.
Full text of the LWO is posted on the City’s website along with Rules Implementing the Living
Wage which further clarify a contractor’s obligations (go to www.sandiego.gov/administration/
and select Living Wage Program).
The above requested documents are due to my office within ten (10) business days. If you
have questions, please contact me at (619) 236-6172 or by email at Malano@sandiego.gov.

Sincerely,

Michele Alano
Senior Compliance Officer
Attachment: CA Labor Code Section 226(a)

cc: Lisa Hoffmann, Purchasing Specialist, Purchasing & Contracting Department
Nico Guerra, Contract Administrator, Public Utilities Department
Debbie Owen, Contract Administrator, Environmental Services Department
Carmen Garcia-Romo, Contract Administrator, Public Utilities Department
Duane Skarbic, Contract Administrator, Park & Recreation Department
Jaqueline Hall, Contract Administrator, Transportation & Storm Water Department
Thomas Sawade, Contract Administrator, Central Stores-P & C Department

 CA LABOR CODE
SECTION 226(a)
Every employer shall, semimonthly or at the time of each payment
of wages, furnish each of his or her employees, either as a
detachable part of the check, draft, or voucher paying the
employee's wages, or separately when wages are paid by personal
check or cash, an accurate itemized statement in writing showing
(1) gross wages earned,
(2) total hours worked by the employee, except for any employee
whose compensation is solely based on a salary and who is
exempt from payment of overtime under subdivision (a) of
Section 515 or any applicable order of the Industrial
Welfare Commission,
(3) the number of piece-rate units earned and any applicable
piece rate if the employee is paid on a piece-rate basis,
(4) all deductions, provided that all deductions made on
written orders of the employee may be aggregated and shown
as one item,
(5) net wages earned,
(6) the inclusive dates of the period for which the employee is
paid,
(7) the name of the employee and the last four digits of his or
her social security number or an employee identification
number other than a social security number,
(8) the name and address of the legal entity that is the
employer and, if the employer is a farm labor contractor,
as defined in subdivision (b) of Section 1682, the name and
address of the legal entity that secured the services of
the employer, and
(9) all applicable hourly rates in effect during the pay period
and the corresponding number of hours worked at each hourly
rate by the employee. The deductions made from payment of
wages shall be recorded in ink or other indelible form,
properly dated, showing the month, day, and year, and a
copy of the statement and the record of the deductions
shall be kept on file by the employer for at least three
years at the place of employment or at a central location
within the State of California.

 Purchasing and Contracting
Living Wage Program

November 30, 2016

VIA EMAIL

Mr. Johnson Le, Chief Executive Officer
Prizm Janitorial Services, Inc.
555 Country Club Lane, Suite C-196
Escondido, CA 92026
Dear Mr. Le:
Subject: Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial.
Prizm Janitorial [Prizm] was found to be in violation of the Living Wage Ordinance and other
laws. While Prizm refused to provide a complete list of all its employees, tax returns, W-2
forms, or complete and accurate records sufficient to determine the full extent of the
underpayment to its covered employees, Prizm agreed to compensate some of its employees a
total of $7,973.75 for backwages and compensated leave due, based on calculations from
limited records. Prizm also refunded the Public Utilities Department [PUD] $32,915.11 for work
billed and not actually performed.
BACKGROUND
On August 9, 2016, the City of San Diego, Living Wage Program, received LWO Complaint C17002 against Prizm alleging non-compliance with LWO requirements on covered janitorial
contracts with the City of San Diego. Prizm currently holds various Purchase Agreements and
individual purchase orders with a combined yearly value of approximately $393,000. To
investigate this complaint, Prizm was specifically requested to provide various payroll records
including records for hours worked and rates paid to all covered employees on the subject
contracts from April 1, 2014, through August 9, 2016.
 For the next three months, LWO Staff worked continuously with Prizm to obtain complete
information. Multiple requests for information, as well as, multiple requests for corrections
were requested from Prizm.
 Prizm initially compensated employees/independent contractors based on a set amount, not
on hours worked, then Prizm switched to paying employees for a set number of hours in a
pay period regardless of the number of hours employees worked. For example, Prizm would
pay a full time employee 80 hours per pay period and short its employees one or two days of
work per pay period.
 Prizm made some efforts to correct violations for current work, but failed to correct
violations for the entire review period. Prizm was asked to make backpay corrections for all
his covered employees, Mr. Le felt that only his two full employees were owed additional
wages for days shorted as described above, and he did not to make corrections for the rest of
his part time employees. Prizm also made calculations of compensated leave owed for several
current and former employees. Prizm paid a total of $7,973.75 for backwages and
compensated leave due.

1200 Third Ave Suite 200
SAN DIEGO, CA 92101
MAlano@sandiego.gov

·

T (619) 236-6172
sandiego.gov

 Page 2 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
 For the period under review Prizm was paid approximately $600,000 for services to the City,
yet total payroll records reported, including handmade receipts made out to cash, of
approximately $200,000 were reported. The amount of payroll does not appear to be
sufficient to support the labor hours needed to perform the actual janitorial work on these
contracts with the City. This points to a potential overbilling to the City, underpayment to
the workers, or a combination of both.
 Prizm was also asked to reimburse for hours billed, but not worked, under Purchase
Agreement 4600002454. Prizm agreed to bring staffing levels to those required under the
contract, and agreed to reimburse PUD $32,915.11 for the LWO wage rate, but not for the fully
loaded cost billed PUD. Prizm claimed it made no profit on this contract.
Prizm has been performing services for the City of San Diego for many years. A LWO
Compliance Review R13-002 was initiated on February 1, 2013, and completed on March 7,
2014. The LWO Compliance Review identified a violation for failure to disclose the use of
subcontractors. Prizm engaged in the practice of subcontracting 100% of the work to
individuals who were told they had to get a business license; the workers were sometimes even
personally driven by Mr. Le to get their business licenses. It is not clear that these individuals
met the criteria of independent contractors as Mr. Le controlled the supplies, hours of work,
and methods of operations.
Prizm began submitting LWO Exemptions requests on September 25 2014, by claiming it
employed 12 or less employees and failing to disclose the total number of subcontractors. On
payroll tax records submitted to this office in the form of DE9C forms, Mr. Le claimed that
Prizm only employed two people, himself and a second individual. Prizm continued to
outsource 100% of the work in violation of SDMC § 22.4210(c), and then claimed it was exempt
from the LWO because it employed 12 employees or less.
On November 15, 2015, Prizm submitted another LWO Application Exemption for purchase
order number 4500070998. During the examination of this LWO Application for Exemption,
Mr. Le disclosed that Prizm was paying some of the workers on City contracts in cash with no
pay statements, and provided originals of handmade receipts made out to cash for these
workers, and provided information for a few independent contractors. Mr. Le said that Prizm
had earned approximately $500,000 the prior year from all his contracts, which includes other
municipalities. LWO staff explained in detail the requirements of the LWO. Mr. Le claimed he
did not quite understand all the City requirements, but that he would start properly hiring
employees to comply with LWO requirements on City contracts.
Prizm’s request for LWO Exemption was denied and all previously approved LWO Exemptions
were rescinded because Prizm could not demonstrate that it actually employed 12 or less
employees, including subcontractors, and the level of work required would suggest more
workers were needed to perform the actual work. On January 21, 2016, Prizm provided LWO
Certifications of Compliance for its various contracts. On February 2, 2016, Prizm was mailed
official correspondence denying its LWO Application for Exemption.
Through workers interviews, interviews with contract administrators, review of records
provided by Prizm, and review of City’s contracts and invoice payments, LWO Staff has
identified numerous violations of the LWO and other laws.

 Page 3 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
FINDINGS
The findings for LWO Complaint C17-002 are as follows:
 Prizm did not notify covered employees of their rights under the Living Wage Ordinance
in violation of SDMC § 22.4225(b).
 Prizm did not pay full wages to all covered employees for all hours worked on the subject
contracts in violation of SDMC § 22.4220(a).
 Prizm did not pay LWO compensated leave time to covered employees for hours worked
on the subject contract in violation of SDMC § 22.4220(c).
 Prizm did not allow covered employees to take uncompensated in violation of SDMC §
22.4220(c). Employees were told that there was absolutely no time off, and if they could
not perform all the hours required, they should just resign.
 Prizm did not comply with record keeping requirements under SDMC § 22.4225(d) which
requires records maintained to include all wage records, proof of payment for health
benefits, covered employee name, address, data of hire, job classification, rate of pay,
cost and amount paid for health benefits, hours worked in each pay period, and paid and
unpaid time off (accrued and used).
 Prizm claimed to not know or employ several individuals that signed their names on
sign-up sheets collected by the Public Utilities Department specifically for Prizm
Janitorial employees coming in and out of the premises to perform work.
 Prizm paid some employees in cash with no pay statements in order to avoid complying
with the LWO, and when these employees complained, Prizm classified them as
independent contractors.
 Prizm classified some employees as independent contractors in order to avoid complying
with the LWO.
 Prizm did not ensure that all subcontractors file a Living Wage Ordinance Certification of
Compliance within thirty days of becoming a covered employer in violation of SDMC §
22.4225(c).
 Prizm did not pay full wages to subcontractors for all hours worked on the subject
contract in violation of SDMC § 22.4220(a).
 Prizm did not pay LWO compensated leave time to subcontractors for hours worked on
the subject contract in violation of SDMC § 22.4220(c).
 Prizm did not perform at least 50% of the work with its own employees in violation of
SDMC § 22.4210(c).
 Prizm, on or around February 2016, started compensating several covered employees half
of the time as employees and the other half time as independent contractors in an

 Page 4 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
attempt to comply SDMC § 22.4210(c) which requires contractors to perform at least 50%
of the work with its own employees.
 Prizm misrepresented and failed to disclose the complete number of employees,
including subcontractors, to secure LWO Exemptions per SDMC § 22.42159(b)(2).
 Prizm overbilled the City for work not performed.
 Prizm did not maintain records documenting compliance in violation of SDMC §
22.4225(d).
 Prizm did not make records available to the City upon request in violation of SDMC §
22.4225(d).
 Prizm did not comply with the City’s General Contract Terms and Provisions dated October
1, 2015, Article II, Section 2.1.1 which requires contractor to comply with all applicable
laws including Prevailing Wage and Living Wage.
 Prizm did not provide pay statements and did not itemize wage rates and hours as
required by California Labor Code 226(a)(9) which specifies that pay statements must
include “all applicable hourly rates in effect during the pay period and the corresponding
number of hours worked at each hourly rate by the employee.”
 Prizm did not comply with California Labor Code 246 which requires the accrual and
payment of sick leave.
 Prizm interfered with this LWO Investigation by requesting that the employees inform
the owner when City LWO Staff contacted them, and to refer questions to the firm. Prizm
was told several times to not interfere with the investigation by asking employees
anything about this investigation, but the firm continued to interfere.
CONCLUSION
While Prizm made some corrections for current work and paid some employees backwages
and compensated due, Prizm has by willfully violated the LWO requirements, violated State
laws, underpaid the covered workers, refused to provide complete records, refused to make
complete corrections, and overbilled the City for work not actually performed. The City may
proceed to seek remedies including, but not limited to, those found in SDMC § 22.4230(f).
If you have questions regarding this letter, please contact me at (619) 236-6172 or by email at
Malano@sandiego.gov.

Sincerely,
Michele Alano
Senior Management Analyst

 Page 5 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
cc: Lisa Hoffmann, Purchasing Specialist, Purchasing & Contracting Department
Nico Guerra, Contract Administrator, Public Utilities Department
Debbie Owen, Contract Administrator, Environmental Services Department
Carmen Garcia-Romo, Contract Administrator, Public Utilities Department
Duane Skarbic, Contract Administrator, Park & Recreation Department
Jaqueline Hall, Contract Administrator, Transportation & Storm Water Department
Thomas Sawade, Contract Administrator, Central Stores-P & C Department

 Purchasing & Contracting
Equal Opportunity Contracting

July 18, 2017

Via Email to: prizmjani@att.net and USPS Certified Mail# 7014 3490 0001 4961 9134
Attn: Mr. Johnson Le, Chief Executive Officer
Prizm Janitorial Services, Inc.
555 Country Club Lane, Suite C-196
Escondido, CA 92026

Reference:

City of San Diego - Living Wage Ordinance Case C17-002

Dear Mr. Le:
Subject:

Living Wage Ordinance Case Reassignment and Closure

This letter is to inform you that the above-referenced case with the City of San Diego’s Equal
Opportunity Contracting Program has been reassigned to a new Compliance Officer for
further investigation.
Prism Janitorial (Prizm) was previously found to be in violation of the City of San Diego’s
(City) Living Wage Ordinance (LWO), other labor laws and contractual requirements on
various City projects. Prizm was noticed of the City’s findings on November 30, 2016
(Attachment 1) by the Living Wage Program.
In order to confirm case closure and proof of payment of restitution to affected employees,
please provide copies of the following items within ten (10) business days of receipt of this
notice:
1.

Confirmation of case closure from previous Compliance Officer, Michele
Alano

2. Proof of payment of restitution in the amount of $7,973.75 by providing the
following:
a. Listing of all affected employees and amounts owed;
b. Copies of itemized wage statements;
c. Copies of restitution checks issued to employees; and
d. Proof of checks cashed by affected employees.

1200 Third Avenue, Suite 200 MS 56P
San Diego, CA 92101
ContactLWO@sandiego.gov

T (619) 236-6000
sandiego.gov/eoc

 Page 2
Mr. Johnson Le
July 18, 2017
City of San Diego - Living Wage Ordinance Case C17-002

For any questions regarding the status of the investigation, please contact the assigned
Compliance Officer. The Compliance Officer reassigned to this matter is Cheryl Smoot and
she can be reached at (619)236-6072 or via email at CSmoot@sandiego.gov.
Thank you,

Cheryl Smoot
Living Wage Manager
Equal Opportunity Contracting

Attachments:
1.

cc:

Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial dated November
30, 2016

Claudia Abarca, Program Manager, Equal Opportunity Contracting
Lisa Hoffmann, Senior Procurement Contracting Officer, Purchasing & Contracting

1200 Third Avenue, Suite 200 MS 56P
San Diego, CA 92101
ContactLWO@sandiego.gov

T (619) 236-6000
sandiego.gov/eoc

 Purchasing and Contracting
Living Wage Program

November 30, 2016

VIA EMAIL

Mr. Johnson Le, Chief Executive Officer
Prizm Janitorial Services, Inc.
555 Country Club Lane, Suite C-196
Escondido, CA 92026
Dear Mr. Le:
Subject: Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial.
Prizm Janitorial [Prizm] was found to be in violation of the Living Wage Ordinance and other
laws. While Prizm refused to provide a complete list of all its employees, tax returns, W-2
forms, or complete and accurate records sufficient to determine the full extent of the
underpayment to its covered employees, Prizm agreed to compensate some of its employees a
total of $7,973.75 for backwages and compensated leave due, based on calculations from
limited records. Prizm also refunded the Public Utilities Department [PUD] $32,915.11 for work
billed and not actually performed.
BACKGROUND
On August 9, 2016, the City of San Diego, Living Wage Program, received LWO Complaint C17002 against Prizm alleging non-compliance with LWO requirements on covered janitorial
contracts with the City of San Diego. Prizm currently holds various Purchase Agreements and
individual purchase orders with a combined yearly value of approximately $393,000. To
investigate this complaint, Prizm was specifically requested to provide various payroll records
including records for hours worked and rates paid to all covered employees on the subject
contracts from April 1, 2014, through August 9, 2016.
 For the next three months, LWO Staff worked continuously with Prizm to obtain complete
information. Multiple requests for information, as well as, multiple requests for corrections
were requested from Prizm.
 Prizm initially compensated employees/independent contractors based on a set amount, not
on hours worked, then Prizm switched to paying employees for a set number of hours in a
pay period regardless of the number of hours employees worked. For example, Prizm would
pay a full time employee 80 hours per pay period and short its employees one or two days of
work per pay period.
 Prizm made some efforts to correct violations for current work, but failed to correct
violations for the entire review period. Prizm was asked to make backpay corrections for all
his covered employees, Mr. Le felt that only his two full employees were owed additional
wages for days shorted as described above, and he did not to make corrections for the rest of
his part time employees. Prizm also made calculations of compensated leave owed for several
current and former employees. Prizm paid a total of $7,973.75 for backwages and
compensated leave due.

1200 Third Ave Suite 200
SAN DIEGO, CA 92101
MAlano@sandiego.gov

·

T (619) 236-6172
sandiego.gov

 Page 2 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
 For the period under review Prizm was paid approximately $600,000 for services to the City,
yet total payroll records reported, including handmade receipts made out to cash, of
approximately $200,000 were reported. The amount of payroll does not appear to be
sufficient to support the labor hours needed to perform the actual janitorial work on these
contracts with the City. This points to a potential overbilling to the City, underpayment to
the workers, or a combination of both.
 Prizm was also asked to reimburse for hours billed, but not worked, under Purchase
Agreement 4600002454. Prizm agreed to bring staffing levels to those required under the
contract, and agreed to reimburse PUD $32,915.11 for the LWO wage rate, but not for the fully
loaded cost billed PUD. Prizm claimed it made no profit on this contract.
Prizm has been performing services for the City of San Diego for many years. A LWO
Compliance Review R13-002 was initiated on February 1, 2013, and completed on March 7,
2014. The LWO Compliance Review identified a violation for failure to disclose the use of
subcontractors. Prizm engaged in the practice of subcontracting 100% of the work to
individuals who were told they had to get a business license; the workers were sometimes even
personally driven by Mr. Le to get their business licenses. It is not clear that these individuals
met the criteria of independent contractors as Mr. Le controlled the supplies, hours of work,
and methods of operations.
Prizm began submitting LWO Exemptions requests on September 25 2014, by claiming it
employed 12 or less employees and failing to disclose the total number of subcontractors. On
payroll tax records submitted to this office in the form of DE9C forms, Mr. Le claimed that
Prizm only employed two people, himself and a second individual. Prizm continued to
outsource 100% of the work in violation of SDMC § 22.4210(c), and then claimed it was exempt
from the LWO because it employed 12 employees or less.
On November 15, 2015, Prizm submitted another LWO Application Exemption for purchase
order number 4500070998. During the examination of this LWO Application for Exemption,
Mr. Le disclosed that Prizm was paying some of the workers on City contracts in cash with no
pay statements, and provided originals of handmade receipts made out to cash for these
workers, and provided information for a few independent contractors. Mr. Le said that Prizm
had earned approximately $500,000 the prior year from all his contracts, which includes other
municipalities. LWO staff explained in detail the requirements of the LWO. Mr. Le claimed he
did not quite understand all the City requirements, but that he would start properly hiring
employees to comply with LWO requirements on City contracts.
Prizm’s request for LWO Exemption was denied and all previously approved LWO Exemptions
were rescinded because Prizm could not demonstrate that it actually employed 12 or less
employees, including subcontractors, and the level of work required would suggest more
workers were needed to perform the actual work. On January 21, 2016, Prizm provided LWO
Certifications of Compliance for its various contracts. On February 2, 2016, Prizm was mailed
official correspondence denying its LWO Application for Exemption.
Through workers interviews, interviews with contract administrators, review of records
provided by Prizm, and review of City’s contracts and invoice payments, LWO Staff has
identified numerous violations of the LWO and other laws.

 Page 3 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
FINDINGS
The findings for LWO Complaint C17-002 are as follows:
 Prizm did not notify covered employees of their rights under the Living Wage Ordinance
in violation of SDMC § 22.4225(b).
 Prizm did not pay full wages to all covered employees for all hours worked on the subject
contracts in violation of SDMC § 22.4220(a).
 Prizm did not pay LWO compensated leave time to covered employees for hours worked
on the subject contract in violation of SDMC § 22.4220(c).
 Prizm did not allow covered employees to take uncompensated in violation of SDMC §
22.4220(c). Employees were told that there was absolutely no time off, and if they could
not perform all the hours required, they should just resign.
 Prizm did not comply with record keeping requirements under SDMC § 22.4225(d) which
requires records maintained to include all wage records, proof of payment for health
benefits, covered employee name, address, data of hire, job classification, rate of pay,
cost and amount paid for health benefits, hours worked in each pay period, and paid and
unpaid time off (accrued and used).
 Prizm claimed to not know or employ several individuals that signed their names on
sign-up sheets collected by the Public Utilities Department specifically for Prizm
Janitorial employees coming in and out of the premises to perform work.
 Prizm paid some employees in cash with no pay statements in order to avoid complying
with the LWO, and when these employees complained, Prizm classified them as
independent contractors.
 Prizm classified some employees as independent contractors in order to avoid complying
with the LWO.
 Prizm did not ensure that all subcontractors file a Living Wage Ordinance Certification of
Compliance within thirty days of becoming a covered employer in violation of SDMC §
22.4225(c).
 Prizm did not pay full wages to subcontractors for all hours worked on the subject
contract in violation of SDMC § 22.4220(a).
 Prizm did not pay LWO compensated leave time to subcontractors for hours worked on
the subject contract in violation of SDMC § 22.4220(c).
 Prizm did not perform at least 50% of the work with its own employees in violation of
SDMC § 22.4210(c).
 Prizm, on or around February 2016, started compensating several covered employees half
of the time as employees and the other half time as independent contractors in an

 Page 4 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
attempt to comply SDMC § 22.4210(c) which requires contractors to perform at least 50%
of the work with its own employees.
 Prizm misrepresented and failed to disclose the complete number of employees,
including subcontractors, to secure LWO Exemptions per SDMC § 22.42159(b)(2).
 Prizm overbilled the City for work not performed.
 Prizm did not maintain records documenting compliance in violation of SDMC §
22.4225(d).
 Prizm did not make records available to the City upon request in violation of SDMC §
22.4225(d).
 Prizm did not comply with the City’s General Contract Terms and Provisions dated October
1, 2015, Article II, Section 2.1.1 which requires contractor to comply with all applicable
laws including Prevailing Wage and Living Wage.
 Prizm did not provide pay statements and did not itemize wage rates and hours as
required by California Labor Code 226(a)(9) which specifies that pay statements must
include “all applicable hourly rates in effect during the pay period and the corresponding
number of hours worked at each hourly rate by the employee.”
 Prizm did not comply with California Labor Code 246 which requires the accrual and
payment of sick leave.
 Prizm interfered with this LWO Investigation by requesting that the employees inform
the owner when City LWO Staff contacted them, and to refer questions to the firm. Prizm
was told several times to not interfere with the investigation by asking employees
anything about this investigation, but the firm continued to interfere.
CONCLUSION
While Prizm made some corrections for current work and paid some employees backwages
and compensated due, Prizm has by willfully violated the LWO requirements, violated State
laws, underpaid the covered workers, refused to provide complete records, refused to make
complete corrections, and overbilled the City for work not actually performed. The City may
proceed to seek remedies including, but not limited to, those found in SDMC § 22.4230(f).
If you have questions regarding this letter, please contact me at (619) 236-6172 or by email at
Malano@sandiego.gov.

Sincerely,
Michele Alano
Senior Management Analyst

 Page 5 of 5
Findings Letter for C17-002 Living Wage Complaint Prizm Janitorial
November 30, 2016
cc: Lisa Hoffmann, Purchasing Specialist, Purchasing & Contracting Department
Nico Guerra, Contract Administrator, Public Utilities Department
Debbie Owen, Contract Administrator, Environmental Services Department
Carmen Garcia-Romo, Contract Administrator, Public Utilities Department
Duane Skarbic, Contract Administrator, Park & Recreation Department
Jaqueline Hall, Contract Administrator, Transportation & Storm Water Department
Thomas Sawade, Contract Administrator, Central Stores-P & C Department