NY says car wash workers getting hosed

August 15, 2008 4:56:51 PM PDT
The car wash is still a rare bargain in New York City. For the price of a couple gallons of gas, you can get your car dazzlingly clean, usually by a crew of immigrant men who speak little English but work so fast most drivers happily hand over an extra buck or two in tips.

The deal is not quite as good for the workers.

State labor officials announced Friday that a round of surprise checks on dozens of city car washes found that 78 percent were in violation of wage or overtime laws - a crackdown that mirrored similar recent efforts in Southern California.

New York's random inspections, conducted over two weeks, found some businesses where workers were being paid only $4 or $5 per hour before tips, well under the state's $7.15 minimum wage.

Others were scheduling employees for 60 or 70 hours a week without paying any overtime. Some managers were illegally taking a cut of workers' tips. Others were accused of improperly paying employees a reduced wage that is allowed in some businesses where workers are tipped heavily, but only under specific conditions.

Altogether, the Department of Labor estimated that the car washes targeted in the sweep underpaid workers by $6.5 million.

Dennis Lalli, an attorney representing about 12 of the car washes targeted in New York's sweep, acknowledged that the industry was once rife with problems, but said it had reformed in recent years. Outright, intentional violations of wage laws, he insisted, are now rare.

"That era, to my understanding, and certainly among my clients, is over," he said.

Lalli said the Labor Department had been too aggressive in its recent sweeps. He said that in some cases, disgruntled workers had exaggerated how many hours they worked, perhaps hoping for a big payday if their boss was ordered to cough up back wages.

In other cases, he said, owners were being cited for violating rules they were unaware of, like a law granting some uniformed workers a $8.40 weekly stipend to launder their shirts.

"They are coming after these guys for tons of money over record-keeping violations," Lalli said. "These are small employers. They are not sophisticated people. They are trying to start a business and create jobs for people."

In California, the problems were so pervasive that officials began requiring car washes to register with the state in 2006. Dean Fryer, a spokesman for California's Department of Industrial Relations, said recent enforcement efforts have continued to uncover rampant wage violations. One lead investigator for the department told The Los Angles Times earlier this year that half or more of car wash owners violated minimum-wage law.

New York car washes had been put on notice that tougher enforcement could be coming east.

A lobbyist for the New York State Carwash Association warned in a posting on the trade group's Web site last October that businesses needed to be "meticulous in the payment of minimum wages" or risk the type of crackdown happening in California.

New York labor officials said the action would be just the first in a series targeting low-pay industries notorious for their disregard for minimum wage laws.

They declined to specify what types of businesses might be next on their enforcement list, but labor activists have long complained about wage violations in the city's vast underground economy, where it isn't unusual to find restaurant delivery workers, grocery store baggers and even retail sales clerks paid less than the legal minimum.

In most, but hardly all cases, the workers are poor immigrants of questionable legal status who keep quiet because of their difficulty finding better jobs.

"There are whole industries in New York in which violations are the norm and labor law compliance is unusual," said Terri Gerstein, the labor department's deputy commissioner for wage and immigrant services. "What we want to do is change the culture with our enforcement efforts - change the culture so that compliance becomes the norm."

The checks, conducted late last winter, were performed on 84 car washes statewide that were selected randomly.

In all, about 13 percent of the state's estimated 640 car washes were inspected in the sweep. Businesses upstate tended to fare far better in the checks than those in New York City, which had the majority of the problems.

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