The investigation of a New York City car wash for failing to pay minimum wage and overtime wages to its employees is a part of a greater investigation of the car wash industry in New York. The ongoing investigation is being conducted by the New York State Department of Labor. Two years ago the Labor Department conducted a limited investigation to detect the level of violations across the state. The Labor Department investigated 84 car washes and found 78 percent of them had wage and hour law violations.
Since 2008, the Labor Department has investigated 150 car washes and the announcement of a recent settlement on October 12th represents an investigation that ran from June 2003 to August 2008. In the recent announcement, the Department of Labor settled with a car wash that did not pay minimum and overtime wages for $1.9 million. The owners of the car wash failed to pay their employees $1,273,664 in minimum wages, tips and overtime wages. The owners did not maintain whole payrolls and only 36 workers could be identified for payment. The workers who were paid in cash have not been identified yet.
In addition to the amount owed for wages, the car wash owners will pay $127,366 in liquidated damages. The owners will also pay $345,000 in interest to identified employees. Finally, the owners will also pay civil penalties to the Department of Labor. Currently, the car wash owners have only paid $200,000.
The car wash employees worked 72 hours per week often working 12 hours a day and six days of the week. They were never paid overtime wages for work completed past 40 hours. The employees were coerced into giving up small tips they earned and some only made $3.75 or $4.00 per hour.
Source: New York State Department of Labor, "New York City Car Wash in Hot Water for Not Paying Workers," 10/12/10