N.Y. Carwash Chain to Pay $3.4 Million in Labor Dispute

A New York carwash chain and its president, John Lage, have agreed to pay 1,187 current and former employees $3.4 million in back wages and liquidated damages to resolve a lawsuit filed by the U.S. Department of Labor, according to a government press release.

Carwashes named in the suit include: Atlantic Auto Care Center Inc.; 109th & First Avenue Corp.; 3808 Boston Road Car Wash Inc.; 2434 CW Corp.; Boulevard Car Wash of N.Y. Inc.; Michael's Car Wash Inc.; Howard Beach Car Wash Corp.; and 613 Car Wash Corp. Lage Management Corp. is the parent company.

The agreement is a final partial consent judgment stemming from a suit filed in 2005, which named several related carwashes and fast lube businesses as defendants. Three previous settlements recovered more than $1.3 million for more than 200 employees, labor officials said.

In total, settlements from the labor dispute have recovered more than $4.7 million in back wages, liquidated damages and post-judgment interest to more than 1,300 employees. The lawsuit was filed following an investigation that uncovered violations related to minimum wage, overtime and recordkeeping requirements, labor officials said.

"This case should be a loud wakeup call to other employers of vulnerable workers that the U.S. Department of Labor will not hesitate to pursue them in federal court in order to compel them to pay employees properly for all hours worked," said Hilda L. Solis, secretary of labor. "Employers must be aware of their obligation to comply with all federal labor laws, and we are here to make sure that they do."

The federal Fair Labor Standards Act requires employers pay workers at least the federal minimum wage and time and one-half their regular wage for hours worked over 40 per week.

The Wage and Hour Division's district office in New York City is attempting to locate several workers who are no longer employed by the establishments to pay them the back wages, officials said.

In the last two years, the Wage and Hour Division has recovered more than $5.4 million for New York City carwash workers.