Zurich American Insurance Company has filed suit in the U.S. District Court for the Central District of California against two Ontario-based staffing companies — Managing Personnel Services, Inc. and Employee Force Provider, Inc. — alleging breach of contract for failure to pay over $1.1 million in workers’ compensation insurance premiums following post-policy audits.
The defendants, described in the complaint as a captive insurance provider and program, were issued two consecutive workers’ compensation policies by Zurich. The first policy (WC Agreement I) covered the period July 1, 2023 through July 1, 2024. The second (WC Agreement II) covered July 1, 2024 through July 1, 2025, but was canceled by Zurich effective June 9, 2025 for nonpayment of premium.
Managing Personnel Services, Inc. (MPS) was incorporated in California on February 11, 2015, and as of late 2024 maintained an active filing status with the California Secretary of State. The company describes its core mission as empowering employers by building workforces and assisting job seekers, specializing in outsourced employment and human resource services. It serves machine operators, clerical, general labor, and light industrial sectors.
Employee Force Provider, Inc. (EFP) was also founded in 2015 and is headquartered at 3400 Inland Empire Blvd., Suite 210, Ontario, California — the same street address listed in the complaint for both defendants. EFP describes itself as supporting companies ranging from small to Fortune 500 firms throughout the United States, offering on-site, direct hire, temp-to-hire, and temp services, with specialties in distribution/logistics, manufacturing/industrial, clerical, and IT/technical staffing.
The BBB profile for Employee Force Provider lists two CEOs: Walter Ladislao Ramirez and Jairo Mendoza Jr. Both companies operate in the same Inland Empire labor market, were founded in the same year, share the same street address, and appear to offer nearly identical services. The complaint itself specifically alleges that the two defendants are alter egos of one another and essentially extensions of each other.
Under both policies, initial premiums were based on estimated payroll exposure, subject to a “true-up” audit at the end of the policy period — a standard feature of workers’ comp policies for staffing and labor-intensive businesses. When actual payroll exposure exceeds the estimate, additional premium is owed; if lower, a refund is issued.
The audits here produced substantial additional premium obligations. In December 2024, the audit for WC Agreement I revealed an additional premium owed of $179,753. The defendants made a partial payment of $100,000 in May 2025, leaving a balance of $79,752. The post-cancellation audit for WC Agreement II, issued in August 2025, produced a demand of $1,059,255 — which the defendants did not pay at all.
In February 2026, Zurich issued a consolidated Statement of Account demanding $1,139,007, plus interest. When the defendants failed to respond, Zurich filed this single-count breach of contract action in federal court, invoking diversity jurisdiction based on the parties’ differing states of incorporation and the amount in controversy exceeding $75,000. Zurich seeks a judgment for the full $1,139,007, pre-judgment interest at the applicable statutory rate, and costs of suit. A bench trial has been requested.
This lawsuit is a reminder of the significant premium audit exposure that can arise in workers’ compensation programs serving staffing companies, particularly those operating under captive or loss-sensitive structures. The gap between estimated and audited payroll — particularly for WC Agreement II, where the audit produced a figure nearly six times the outstanding balance from WC Agreement I — underscores the importance of diligent mid-term payroll monitoring and timely premium collections. Carriers and program administrators would do well to review their audit enforcement procedures and premium security mechanisms before exposure of this magnitude accumulates.
Case filings are publicly available through PACER. The case docket does not contain any responsive pleading from any named defendants.