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Car Wash Chains Pay 4m for Underpaying Workers

March 7, 2014
By Stephanie West

New York, NY – Two interrelated car wash chains owned and operated by John Lage, Michael Lage and Fernando Magalhaes, which together operate approximately 21 car washes in New York City have consistently underpayed workers and was investigated by the New York State Attorney General.

Attorney General Schneiderman’s agreements require the car washes and their owners to pay restitution totaling more than $2.2 million to an estimated 1,000 car wash workers for nearly six years of underpaid wages, as well as more than $513,000 to the New York State Department of Labor’s Unemployment Insurance Division and nearly $1.2 million to the New York State Workers’ Compensation Board. In addition, the agreements require the car wash owners to pay for independent monitoring of their labor practices for up to three years, with unannounced on-site inspections and payroll audits, and with results reported to the Attorney General.
 
“When workers like these stand up for their rights, they need to know that state and city leaders will stand behind them,” Attorney General Schneiderman said. “These agreements will ensure that the car washes clean up their acts to comply with the law. And they ensure that New York businesses who play by the rules can do so on a level playing field.”
 
From November 29, 2006, through September 30, 2012, the car washes failed to pay all of their workers overtime and deducted pay for breaks that workers did not get. In some locations, managers improperly took shares of workers’ tips for themselves. The car washes also failed to pay “call-in pay,” required by law when workers must report to work but are sent home soon after.  
Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union, said, “When we began organizing car wash workers in the city, we were amazed at the terrible conditions and culture of lawlessness that permeated the industry. Car wash owners who would deprive their workers of the wages they are owed are put on notice – they will be held accountable for their actions, and there is a steep price to be paid for those who would break the law.”

March 6, 2014

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