Former NYC Car Wash Employees Win $8.5 Million Judgment Against Ex-Employer

Former NYC Car Wash Employees Win $8.5 Million Judgment Against Ex-Employer

Everyone knows there are minimum wage laws. Many New York City employers choose to disregard such laws, especially when employing low-skill or foreign-born workers. Such employers simply believe they are free to commit wage hour violations without consequence.

Bankruptcy Trustees Settle Wage Theft Case After Concluding There is “No Defense” of Employer's Actions

Unfortunately, in many cases these employers are right. As the New York Times noted in a recent report, wage theft “remains an epidemic problem.” The main reason for this is that despite the efforts of state and federal regulators, the “enforcement of wage laws depends to some extent on employees to report violations.” Many of the most vulnerable workers never come forward because they “fear retaliation from a boss, they may hesitate to contact a government agency and they may not know how to find a private lawyer.”

The Times reported on one case that proved the exception to this rule. A group of employees at a New York City car wash chain took on their former boss and won one of the most significant wage-hour cases in recent memory. The workers–who dubbed themselves “carwasheros”–were forced to work for as little as $300 per week for 72 hours of work, which was less than half of the applicable minimum wage and overtime rates.

According toThe Times, the employer claimed the carwasheros were “tipped” employees. But the employer never kept accurate payroll records. Instead, employees were simply handed cash at the end of their shifts. This, in and of itself, is against New York law.

After several employees filed a lawsuit charging the employer with wage and hour violations, they were fired. Their former boss then tried to claim none of the plaintiffs ever worked for him. The employer refused to comply with multiple court orders and then–in a final attempt to avoid responsibility–filed for bankruptcy protection a half-hour before a scheduled deposition in the wage-theft lawsuit, The Times reported.

The bankruptcy filing backfired. The carwasheros' employment attorney convinced the bankruptcy court to let their case proceed. When the employer remained defiant, the bankruptcy judge appointed two trustees to take control of the car wash business.

After reviewing the largely non-existent payroll records, the trustees admitted in court “there was no defense” to the employees' overtime and wage hour claims. The trustees therefore settled the lawsuit for what turned out to be $8.5 million, the Times said, with some individual carwasheros receiving upward of $200,000.

Speak With a New York City Overtime and Wage Hour Lawyer Today

This was an extraordinary case in many respects, but it does illustrate how employees can work together and use the legal system to hold their employers' accountable for wage-theft violations. If your employer is not paying you the legally-mandated minimum wage or overtime rate and you are unsure of what to do next, you need to speak with an experienced New York City employment attorney as soon as possible. Contact the Law Offices of Mahir S. Nisar today to schedule an initial consultation.

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