Los Angeles, CACar wash owners are notorious for breaking California labor laws. In May 2012, four car wash workers filed a California overtime class action lawsuit alleging that they had to arrive early to work but they clocked in when there were enough cars to wash.
Just two months prior to this overtime lawsuit, two other lawsuits were filed against three Los Angeles car wash businesses -- Rosecrans King Car Wash, Wilshire Car Wash and Vermont Auto Spa -- for California labor code violations, including failure to provide minimum wage, failure to provide meal and rest periods, and overtime pay to employees. The plaintiffs are seeking unpaid wages, penalties and damages totaling more than $2 million.
Because car wash employees, or “carwasheros”, are classified as non-exempt, they must be paid for all hours worked. If their hours exceed more than 8 hours per day, or 40 hours per week, they must be paid overtime at a rate of 1.5 their regular rate of pay. And in the state of California, they are entitled to a 30-minute lunch break and two 15-minute rest breaks during an 8-hour shift.
Furthermore, if a carwashero receives tips, those monies belong to the employee, not the manager. And tips cannot be deducted from the regular rate of pay, which would be contrary to the California labor law.
Aren’t car wash employers familiar with California labor laws? Do car wash owners weigh the odds and decide that it’s more cost effective to break the law than pay their workers minimum wage and overtime? Say the car wash employer??"or any employer for that matter---has a class action lawsuit filed against them.
“In many class actions your typical opt-in rate may be only 20 percent, so there is a big incentive for employers to break the law,” says attorney Allen Vaught. “Many employers take the risk, and if they get caught, it’s no big deal.” In other words, employers make more money by breaking the law and paying the penalty because not everyone is going to join the class action lawsuit. Workers typically don’t come forward because they are afraid of retaliation??"but retaliation is another violation of the California labor code."
However, the gamble may not pay off. “An employer has to pay double the amount due, unless they have a good faith basis for not having paid overtime to their employees,” adds Vaught. “And they must pay legal fees.”
Vaught wishes there were stiffer penalties for overtime violations. “There is no mechanism for punitive damages so economically it makes more sense to break the law.”
Meanwhile, lawsuits will continue. But conditions for car wash workers may be improving, given a recent overtime settlement.
In January 2012, a settlement of $800,000 was reached in favor of employees at eight car washes in California. The car wash owners were alleged to have not paid overtime, falsified payment records, and denied workers rest and meal breaks.