Calif. Labor Commissioner Sues Car Washes to Collect $2 Million in Unpaid Wages, Penalties

Both lawsuits allege violations of minimum wage, overtime, and recordkeeping laws and failure to issue itemized wage deduction statements.

California Labor Commissioner Julie A. Su recently filed two separate lawsuits in Los Angeles Superior Court against three Los Angeles car wash businesses for alleged violations including failing to provide minimum wage and overtime to employees. The complaints seek unpaid wages, penalties, and damages totaling in excess of $2 million.

The California Department of Industrial Relations’ (DIR) Division of Labor Standards Enforcement (Labor Commissioner’s Office) conducted investigations and alleged that Rosecrans King Car Wash, Wilshire Car Wash, and Vermont Auto Spa violated state laws.

“Wage theft is a serious problem that harms workers and employers who follow the laws as well as the state economy. As this case shows, we will hold employers accountable to the full extent of the law,” said DIR Director Christine Baker.

Both lawsuits allege violations of minimum wage, overtime, and recordkeeping laws and failure to issue itemized wage deduction statements as required by law. B.B.L. Investment Corporation d.b.a. Wilshire Car Wash and V5 Car Wash, LLC d.b.a. Vermont Auto Spa were also found in violation of meal and rest period requirements.

“Our investigations found that employers knowingly and willfully failed to properly record accurate time records for each worker and failed to provide them with itemized wage deduction statements with their pay,” Su said. “By not providing an itemized statement, workers had no way to verify if the pay they received covered all hours worked. This routine practice by the employers is nothing less than an act of wage theft.”

In the complaint filed against Rosecrans King Car Wash, the labor commissioner found that between January 2009 and present, the company routinely and systematically failed to pay workers all wages earned. Evidence obtained shows that the employer did not pay workers for all hours worked, which resulted in workers not being paid proper minimum wage and overtime. The lawsuit filed seeks $1.6 million in minimum wage, overtime, and penalties as well as attorney fees.

The second complaint is filed against B.B.L Investment Corporation, d.b.a. Wilshire Car Wash, and V5 Car Wash LLC, d.b.a. Vermont Auto Spa, for violations found between March 2009 and August 2010. V5 Car Wash is the successor carwash to B.B.L. Investment Corporation. The investigation by the labor commissioner found that B.B.L Investment Corporation used the same facility and workforce to offer substantially the same services between March 2009 and August 2010 when operations continued under V5 Car Wash. Both entities were acting at all times within the course and scope of an employment partnership or joint venture. Under California law, this makes V5 the legal successor to B.B.L. Investment Corporation.

“The law is intended to address the problem of shell games, where employers caught violating the law simply close one entity down and open a new one under a different name,” said Su. “When this happens, both the original employer and the successor entity are responsible for making sure workers are paid.”

The lawsuit filed seeks $348,732 in minimum wages, overtime, and penalties for meal and rest period violations as well as attorney fees.

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