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Michael Jackson fined over Neverland labor miscues

State takes action over unpaid wages, lapsed workers' comp


Michael Jackson
Wages and Pensions

(CNN) -- California officials have fined Michael Jackson nearly $170,000 and ordered employees at the pop star's Neverland Ranch to stop working, after finding that employees had not been paid since December and the ranch's workers' compensation coverage had been allowed to lapse.

On Thursday, the California Department of Industrial Relations slapped a "stop order" on Neverland, which prohibits employees from going back to work until workers' compensation coverage is restored. It also fined Jackson $69,000 for the lapse.

On Tuesday, the same agency sent a letter demanding that Jackson pay employees at least $306,000 in back wages by next week, as well as a fine of more than $100,000 for failing to pay wages.

If the back wages and penalties aren't paid by March 14, the department "will pursue appropriate legal action," the letter said.

Jackson has not been living at Neverland in recent months. Shortly after he was acquitted on child molestation charges in June, he relocated to Bahrain, a small nation in the Persian Gulf.

Dean Fryer, a spokesman for the California Department of Industrial Relations, told CNN Thursday that the agency is investigating approximately 47 complaints from employees about unpaid wages. It was during that investigation that state officials discovered that Neverland no longer had workers' compensation coverage, he said.

"There have been ongoing problems with wages at Neverland, but we were surprised the ranch would let its workers' comp policy lapse as well," Fryer said.

"We were tipped by an employee filing a wage claim against the ranch for unpaid wages," he said. "We were told that the ranch had no workers' compensation coverage. We looked into our data bases and found that their policy lapsed January 10, and we moved forward to ensure the protection of employees by issuing a 'stop order.'"

Thursday's $69,000 fine amounts to $1,000 for each of the 69 employees that the ranch had on its payroll when it filed a tax report in December, he said.

The entertainer's accounting firm advised all workers Thursday that they cannot report for work until a workers' compensation policy is secured, according to Fryer.

Jackson must secure the policy immediately, ideally within 24 to 48 hours, Fryer said. If he fails to do so, the state will not allow him to maintain employees at Neverland, essentially shutting down the ranch.

If a new policy is secured, Jackson will have five days to appeal the "stop work" order and get clearance for employees to return to work. State investigators will be monitoring the situation at Neverland to ensure employee safety.

Neverland, equipped with an amusement park and a zoo, figured prominently in the child molestation case against Jackson.

Prosecutors charged that the one-time King of Pop used the ranch's playful atmosphere to lure teen-age boys for his own sexual gratification. Jackson steadfastly denied the charges, insisting Neverland was a haven for innocent fun.

After 32 hours of deliberation, a Santa Barbara County jury acquitted Jackson on all 10 charges lodged against him.

During the trial, Jackson's representatives said he had no plans to sell Neverland or leave the country. They also denied assertions by prosecutors that he was facing severe financial problems.

CNN's Dree De Clamecy contributed to this report.

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