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Car Washes So Dirty That The DLSE Makes Them Post Bonds For Wage Violations

How filthy are the wage and hour practices of car wash operators? So dirty that the legislature enacted Labor Code §§ 2050 to 2065 to the Labor Code to regulate these employers and establish the Car Wash Worker Restitution Fund. Many car wash employees are not paid a wage by their employers, but receive only the tips given by customers. Often, these employees are Spanish speaking immigrants who are paid below the minimum wage and never receive overtime pay while working extremely long hours without breaks.

In passing such measures, the legislature expressly noted that a number of employees have been harassed, intimidated, and mistreated by their employers because of their immigration status, that some employees work in substandard working conditions, and that existing labor laws and enforcement efforts had failed to remedy these problems.

To address and remedy these and other problems that plague the car washing and polishing industry, the legislature determined it would be in the interests of the public’s welfare, prosperity, health, safety, and peace to regulate the industry by requiring employers to register with the Labor Commissioner and pay a registration fee, and to procure a surety bond for the benefit of any employee damaged by the employer’s failure to pay wages or fringe benefits. This established the Car Wash Worker Restitution Fund as a source of compensation for persons damaged by an employer’s failure to pay wages, penalties, and other related damages.

Fifty dollars of each registrant’s annual registration fee is deposited into this fund, and half of the fines collected pursuant to Labor Code § 2064, for failure to register, are deposited into the fund. The new procedures for obtaining damages from the Car Wash Worker Restitution Fund are set forth in section 13694 of regulations proposed in recently concluded hearings before the DLSE.

The car wash industry is not the only industry in which employers must post a bond to secure payment to wages to their employees. For example, virtually every public works prime contractor must post a payment bond to secure the payment of their employees' wages. However, we aren't aware of other industries which must register and fund a worker's recovery fund specifically because of a history of wage and hour law abuses.

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