DOWNTOWN — Santa Monica-based Bonus Car Wash is among eight car washes in the state that have agreed to pay more than $1 million to settle a civil lawsuit in which they were accused of underpaying workers and violating labor laws.
Attorney General Kamala Harris, whose office filed the lawsuit in 2010, announced the settlement Tuesday.
“Workers at these car washes were taken advantage of by unscrupulous employers who illegally denied them the pay and benefits they earned,” Harris said. “I am pleased that the resolution of this case will allow workers to receive the pay they are owed.”
Many of the employees are unskilled, low-wage, non-English speakers who are at a high risk of being unemployed and without resources “and thus especially vulnerable to financial hardship,” the settlement states.
The Attorney General’s Office filed the lawsuit against the businesses after investigators interviewed more than 80 workers who said the car washes denied workers minimum wage and overtime, failed to pay wages owed to those who quit or were fired, denied rest and meal breaks and created false records of time worked.
The car washes required employees to report to work several hours in advance and be available, unpaid, until business picked up, Harris said. When workers were paid, many received paychecks that could not be cashed because of insufficient company funds.
Additionally, the car washes operated for years without licenses from the Labor Commissioner, which are required under California law, prosecutors said.
In court documents, the owners of the car washes denied the allegations. The settlement is not an admission of liability, but rather a “good faith agreement” that was the result of extensive negotiations.
Sergio Diaz-Esquivel and Juvenal Diaz-Esquivel worked for the Wash & Go Hand Wash in Irvine during 2005 and 2006 and quit because of the poor working conditions, according to prosecutors.
They worked seven days a week and were not paid for all the hours they worked, nor paid the overtime wages due to them. After they quit, Wash & Go Hand Wash continued to refuse to pay them, which forced the workers to go to the Labor Commissioner, prosecutors said.
In August 2007, they obtained judgments totaling $14,708.24, including penalties for the car wash’s failure to pay them their wages.
Along with more than $1 million in restitution of unpaid wages and civil penalties, the car washes are required to pay $50,000 in employment taxes.
The settlement requires that the first installment be paid by Jan. 15 and the second installment by July 15.
In October of 2011, employees and management at Bonus Car Wash on Lincoln Boulevard signed an agreement allowing the workers to unionize.
Efforts to organize began in the Marina Car Wash, owned by the same company, in Marina del Rey in 2008. That business closed down, but the desire to unionize had spread to its sister car wash in Santa Monica.
Workers received support from the CLEAN Carwash Campaign and the Los Angeles County Federation of Labor AFL-CIO, as well as local organizations like the Church in Ocean Park.