Defunct California Construction Company Ordered To Restore Money To Employee Retirement Plan
The U.S. Department of Labor (DOL) filed a lawsuit against Fresno-based Explore General Inc. and Jaime M. Gonzalez, alleging that they failed to pay the required fringe benefits to the company’s 401(k) profit-sharing plan and breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The lawsuit was based on an investigation by the DOL. The defendants have been ordered to restore $519,601 to the company’s 401(k). It was established that Gonzalez was the company’s owner and president at the time of the violation.
The judge in the case found that the construction company, now out of business, was required to pay workers an hourly wage that included a fringe benefit for each participating worker in the form of contributions to the retirement plan whenever it was working on projects financed by government agencies. Although the company was paid in full for its work, including fringe benefit amounts, and certified that it was sending fringe benefit amounts to the plan, it failed to remit over $300,000 to the plan. Instead, it used the money for general operating expenses. In addition to the $300,000, the judge ordered the company to restore lost earnings to the plan.
“Retirement savings are a vital part of ensuring a steady income after we leave the workforce, which is a key reason that Congress chose to give them special protections,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “Unfortunately, the individuals entrusted with protecting this plan violated those safeguards.”