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Inspectors find dirt on books at Southern Calif. carwashes
Ateam of state inspectors strode into the Blue Wave Car Wash in West Los Angeles, past latte-sipping customers in electric massage chairs and into the gritty carwash tunnel.
"¿Cuánto gana usted?" the inspectors asked worker after worker, about 20 of them, most Latino immigrants. "How much do you make?" Each carwashero responded that he earned minimum wage or more -- just as the owner of the Blue Wave, one of the region's busiest carwashes, had told the inspectors.
Looking over payroll records, however, the regulators became suspicious. Employees who said they were full time were listed as working just 10 or 15 hours a week.
Inspector Martha Mendoza ushered Juan Cruz Santiago, a small man with salt-and-pepper hair, away from the others. During gentle questioning under a ficus tree, he admitted that most days, he and his 66-year-old father worked for tips only. So did nearly half the other employees, he said. It had been that way for at least six years.
"It's bad," the 41-year-old Oaxacan immigrant whispered to Mendoza, his eyes darting nervously toward his boss' office. "Other carwashes are the same, no?"
Many are. A Times investigation has found that hand carwashes -- automotive beauty shops patronized by tens of thousands of Southern California motorists every day -- often brazenly violate basic labor and immigration laws with little risk of penalty.
Half or more of carwash owners flout the minimum-wage law, estimated David Dorame, the longtime lead investigator for low-wage industries at California's Division of Labor Standards Enforcement.
Despite many undocumented workers' reluctance to complain to authorities, employees at a fifth of Southern California's carwashes in the last five years have formally accused owners of illegally underpaying them, The Times found.
From Santa Monica to Westwood to Koreatown, many workers said they received only tips for some or all of their shifts. Labor division inspectors estimated that about 10% to 20% of car dryers are not paid by owners.
"Tips only" is a requirement for some new workers until owners are satisfied that they can properly dry a car, laborers said. Their take is typically $10 to $30 a day.
At the Blue Wave, owner Isaac Shanfeld told inspectors that all of his workers earn at least minimum wage, costing him $700,000 a year. The Beverly Hills resident said he didn't know of anyone working for tips alone, but added: "I can't police everyone." After the inspection last fall, he was issued a $2,600 citation for wage violations.
'Want to go home?'
Paid workers at some of the other 1,000 washes throughout Southern California said they earned as little as $1.63 an hour. As of January, the minimum wage rose to $8 an hour.
"We sweat like animals," said detailer Manuel Varela, 42, who until recently worked at a carwash just west of downtown Los Angeles.
To survive, carwasheros often pool resources, cramming into cheap one-room apartments, sometimes sleeping side-by-side on the floor like, as one worker put it, salchichas embolsadas, or stuffed sausages.
"Employers feel out the lowest amount these workers will take," said Timothy Kolesnikow, a former senior attorney at California's labor division who now represents carwasheros and others in his private practice. "People don't realize the human misery involved in getting their cars washed. There is a dark side to this."
Desperate for a toehold in the region's underground economy, many in the largely undocumented workforce are loath to complain for fear of being fired, physically threatened or deported.
Pedro Guzman, an illegal immigrant from Honduras, said a manager at a Hollywood carwash was able to keep employees washing at a furious pace -- 350 to 700 cars a day -- with two words in ungrammatical Spanish: "Quiere casa?" "Want to go home?"
Immigration authorities have done little to discourage the steady flow of undocumented workers into carwash jobs, affording owners an endless supply of cheap, eager and easily exploited laborers.
Despite the national debate over illegal immigration and a recent crackdown on some employers, U.S. Immigration and Customs Enforcement officials say they have not raided a single California carwash in at least four years.
A 2000 survey by the U.S. Census showed that 92% of Los Angeles County's carwasheros were noncitizens, and nearly a third acknowledged they were undocumented. Even some owners say that a majority of the workforce is in the country illegally.
"I cannot get legal employees," said Gene B. Ho, owner of Pico Car Wash on West Pico Boulevard near Western Avenue. "If anyone called immigration authorities, they'd shut me down."
The Times analyzed worker claims and lawsuits as well as all state inspection reports for the last five years at carwashes in California's eight southernmost counties. A reporter interviewed dozens of workers and owners and visited numerous carwashes, sometimes accompanied by state inspectors or labor advocates.
The problems are hidden in plain sight. Carwashes dot nearly every Southern California neighborhood, but workers often are paid off the books. Regulators tend to visit carwashes infrequently, and they hold employers to account even less often.
Nearly a quarter of carwashes inspected in the last five years were not itemizing payroll deductions, suggesting not only that they might not have been paying minimum wage but that the government was losing significant tax revenue.
Thin profit margins
In Southern California, each carwash grosses an average of nearly $1 million a year, according to the Western Carwash Assn., an industry trade group. But legitimate operators typically run on 8% to 10% profit margins and sometimes struggle to make payroll, said Randy Cressall, a board member of the association and owner of Valencia Auto Spa in Valencia.
Operators who skirt minimum-wage and other laws -- a minority, according to Cressall -- make it tough to compete.
His association actually supports increasing fines as much as threefold so that they are not accepted as merely a cost of doing business.
"We still allow people to operate cheaper illegally, even faced with fines, than legally," he said. "Large carwashes can save $5,000 or $10,000, at least, a month by not abiding by the law."
He has advice for customers as well: Shun carwashes that offer a complete cleaning, inside and out, for as little as $5.
Fares Ennabe, the Honduran immigrant owner of Western & Fourth Car Wash in Koreatown, said owners are just trying to give customers what they want.
"People here want good quality, and cheap," said Ennabe, who in 2005 and 2006 paid three settlements totaling $42,500 to workers who claimed he did not pay minimum wage, records show.
According to a 2005 survey by the International Carwash Assn., nearly two-thirds of motorists nationwide used carwashes, often going four to six times a year. In car-obsessed Southern California, the numbers might be higher.
On a fall day at Pico Car Wash, a steady flow of vehicles rolled through the wash's tunnel, pulled along by a chain as workers rushed to soap them up.
"The chain doesn't stop," said Erick Garcia, a secador, or dryer. He has done every job at Pico, which has settled five individual wage claims totaling nearly $22,000 since 2000 and is embroiled in a lawsuit over wages by 13 workers, including Garcia.
Soapers, or jaboneros, wash 500 cars on the busiest days, crouching to brush wheel rims and climbing to scour SUV roofs, Garcia said.
"Your hands have to be like lightning," swiftly lathering one side in less than two minutes as the boss expects, Garcia said.
After a worker parked dripping cars in a line, a sweating Garcia toweled off one after another. As customers waited in the shade, he wiped the interiors of vehicles cooked uncomfortably hot by the midday sun, then sprayed degreaser on the wheel rims. He and the other workers, about a dozen men ranging in age from about 20 to 40, wore baseball caps over wet rags on their heads to keep from overheating.
Time was everything. Garcia's boss, inside an air-conditioned office adorned with a "God Bless America" banner, watched his workers on security monitors. And Garcia said he didn't want customers to complain or hold back on his tip.
By comparison with some of his co-workers' jobs, his was easy. He pointed toward the entrance of the carwash, where vacumeros were suctioning dust out of carpets and plucking out debris, including rotten food, matted dog hair and used condoms.
"You spend all day stooped over," said Garcia, who spent his first year at the wash as a vacumero. His back would spasm as he bicycled home after 11-hour days.
The owner, Ho, said his workers are exaggerating. "They are trying to rip me off," said Ho, who emigrated from South Korea in 1979. He called many of his workers lazy.
"I try to treat employees better than at any other carwash."
Drying by hand
Elsewhere in the country, most carwashes are automated, requiring few workers. But in Southern California, hand carwashes proliferated in the 1990s, fueled by a large influx of cheap immigrant workers and low start-up costs. (Such carwashes sometimes use machinery to soap cars but rely on people to dry them by hand.)
Many of the business owners are legal immigrants from Asia and the Middle East. Kevin Kish, an attorney with Bet Tzedek Legal Services, a nonprofit agency that provides low-wage workers free legal help, said the new owners often brought from their homelands a cavalier attitude toward the law and a tendency to treat workers almost like property.
Many Latino immigrants, particularly those newly arrived, find working at a carwash preferable to the uncertainty of day labor and are happy to earn many times what they can back home.
An aggrieved worker, however, has limited options for redress.
He can rely on state inspectors to fine owners for problems on the job. Or he can seek back pay through a lawsuit or a wage claim, which involves administrative proceedings.
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.
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."