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Workers getting soaked at Southland carwashes

A TIMES INVESTIGATION

Owners frequently violate labor and immigration laws with little risk of penalty, officials say. Many employees are loath to complain, but some have formally accused their bosses of underpaying them.

March 23, 2008|Sonia Nazario and Doug Smith | Times Staff Writers

With just a dozen labor division investigators to focus on carwashes and six other low-wage industries statewide, inspections are relatively rare. Until 2007, state labor investigators visited just a few dozen of California's 1,600 carwashes each year.

Increased oversight

In the last year, the division has stepped up its oversight. Together with federal labor inspectors, as well as health, safety and tax regulators, it has targeted those suspected of being the worst offenders. Visits are triggered, for instance, when workers at a single carwash have filed five or more wage claims.

Regulators still are hampered by bosses who routinely threaten workers or coach them to lie, said Lupe Almaraz, who retired last year as the labor division's deputy chief in charge of field operations.

Inspectors often are reduced to relying on the employer's own records, which they say are easily falsified.

A 2003 state law gave the division better tools and more funding to crack down on the industry. But the agency has largely failed to implement the law.

Nearly four in 10 carwashes aren't even registered with the state, the law's most basic requirement.

Two-thirds of carwashes inspected in the last five years were out of compliance with one or more state labor laws -- considered by regulators to be the worst record among the state's low-wage industries, including agriculture and garment manufacturing. Although some violations were minor, others were fundamental: underpaying workers, hiring minors, going without workers' compensation insurance and denying meal breaks.

When the state fines the businesses, not only are the amounts often low, but workers don't see much of what is collected. Since 2003, the state has fined carwashes a total of $4.7 million. Most went to the state, with just 12% going to workers, according to a Times analysis of state data.

State officials say one reason is that workers have the option of filing suits or claims. But that carries its own risks. Not the least of them is retribution from bosses.

Three former workers from South Gate Car Wash were granted temporary restraining orders in December, saying the former owner threatened one man's life and another man's family in Guatemala after the men filed wage claims. The matter was settled.

In fact, more than half of claims end without any award, often because the worker drops the matter.

State labor officials acknowledge that they encourage settlements rather than full hearings, to spare the strapped division the cost and time involved. From 2003 through 2007, workers who received settlements got a third of what they claimed to be owed, state data show.

A settlement -- or even a victory -- doesn't ensure compensation. About half the time, owners still don't pay, labor division and worker advocates said.

In some cases, the money at stake can be substantial.

The owners of Thousand Oaks Hand Wash saved themselves more than $1 million by underpaying 100 employees over four years, according to an ongoing lawsuit by one undocumented worker that seeks class-action status.

The 2007 suit triggered a state inspection, and the owners, Hadi and Barbara Shirazi, were fined $372,000 for not paying minimum wage and for overtime and child-labor violations. To settle the state's case, the owners agreed to pay $200,000 to current and former employees without admitting wrongdoing, according to the Shirazis' attorney, Michael Justice.

Such a resolution is rare.

Some carwasheros, like Gabriel Chavez, 24, have learned that complaining to the state doesn't pay.

The former bus driver from Chiapas, Mexico, was on his knees, vacuuming a car, at Nary's Hand Car Wash west of downtown L.A. when a pair of labor division inspectors made a surprise visit in April 2004. As they talked to owner Patrick Lo in his office, Lo's wife hurried up to Chavez and half a dozen other workers and pressed two fingers against her lips, according to Chavez and a co-worker.

Chavez felt torn. He had crossed the border illegally to pay off $3,000 in debt and feed his wife and two young daughters back home. He needed this job.

Still, he felt what Lo was paying was unjust. Speaking out might boost his pay, even get him back to his daughters faster. Quietly, behind the carwash, he told one of the inspectors about his true pay, then between $3 and $4 an hour.

The inspector informed Chavez of what minimum wage was at that time: $6.75 per hour. "He's robbing us," he told the other workers that day. "We have to tell the truth."

The officials fined Nary's and Lo $17,000 for violating payroll requirements. But the money went to the state, not to workers, and the government did nothing to investigate further, state records indicate.

Lo started paying minimum wage, but workers say he compensated them for fewer than half the hours they actually put in.

Through his attorney, Lo said he had to pay workers less than minimum wage to stay competitive. "In the laws of the underground economy, he couldn't raise wages without having no or a very small return," said Jonathan Primuth.

All Chavez knew was that his paycheck totaled the same as before the inspectors arrived.

"From now on," he told himself, "I'll just take what the boss gives me."

--

sonia.nazario@latimes.com

doug.smith@latimes.com

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