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Feds bust Lozano’s for mistreating workers

April 21, 2009

From December 2006 to December 2008, Mountain View’s favorite carwash failed to pay its workers for more than 40,000 hours of labor.  According to a U.S. Department of Labor press release:

An investigation revealed that workers were required to arrive at the establishments at their scheduled times but had to wait to be placed on the clock based on car wash service volume.  Workers waited between 15 minutes to over an hour each workday.

"Listen up, everyone: Lozano's a dick."

"Listen up, everyone: Lozano's a dick."

Lozano’s sort of got away with its nickel-and-diming, too.  The company’s fine of $268,501 (which works out to an average of nearly $1,000 per worker for the 270 workers) is based on the federal minimum wage of $6.55.  DOL does not have the power to enforce state minimum wage.  California’s minimum wage is $8.00, which means the company owed workers about $60,000 more than it paid.

DOL public affairs officer Deanne Amaden told me that workers will often choose to pursue their remedies under federal law rather than state because they can remain anonymous while doing so.  State labor laws enables workers to recover for up to three years worth of unpaid wages and to do so at the higher wage, but state officials can only bring enforcement actions on behalf of a single employee, often revealing that employee’s identity circumstantially.

DOL goes through a surprisingly intensive process to make sure the victimized workers get compensated, sending letters to the last known addresses the employer had, spreading the word through news outlets and community organizations, asking foreign consulates to help locate their citizens and publish notices in foreign newspapers and using a locator service for those they still can’t find.  “We have three years to try to find the employees.  If within three years we haven’t found them, the funds go back to the U.S. Treasury.”  If any readers worked there between Dec. 10, 2006 and Dec. 6, 2008, or know somebody who did, call (408) 291-7730, ext. 12 to see if you are eligible.

Amaden said the department has been targetting carwashes recently, because of the concentration of low-wage workers who often don’t speak English.  She also told me the department does not disclose the source of its complaints, but that they usually arise from current or former employees, or from a competitor.  “That happens way more than people expect,” she said.

I couldn’t reach Lozano’s owner, but for what it’s worth, Amaden said the company was remarkably cooperative, especially compared to their counterparts in Southern California.  Still, I couldn’t help but think of the Zoolander scene above.

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