NYC Council Passes Licensing Bill For Car Washes

This past June, the New York City Council passed a bill that requires, for the first time, the city’s 200+ car washes to get licenses to operate, Politico New York reported. The bill, which passed 43-7, will also put into place checks to ensure that the city’s car washes comply with all relevant labor and environmental laws. The new requirements would seek to stop the problem of wage theft in the car wash industry, where some workers have been found in the past making as little as half of what the law sets as the required minimum.

Two years ago, current speaker of the city council, Melissa Mark-Viverito, introduced the bill to enhance oversight of the city’s car wash industry. The bill targeted the car wash industry because it had a long track record of flouting labor laws. In 2008, the New York Times reported on a state Labor Department investigation, which found that almost one-half of the state’s car washes and nearly 80% of the car washes in New York City did not follow the law when it came to paying the minimum wage or overtime. That investigation found that some workers made as little as $3 per hour, and some worked as much as 72 hours in a week without receiving any time-and-a-half pay for their overtime.

The bill requires car washes to obtain licenses, which are good for two years, at a price of $550. The Department of Consumer Affairs would use several criteria to decide whether to issue or renew a license. One of these factors is the business’ “moral character.” That criterion relates to the company’s history of workplace conditions and labor law compliance.

Car wash owners fought against the licensing bill, telling the city council that the new requirements would functionally end the car wash industry in the city. One of the most contentious parts of the originally proposed bill would have required car wash owners to obtain a bond in the amount of $300,000 to cover claims such those related to wage theft. Wage theft can include a number of labor law violations, such as failing to pay overtime, paying a sub-minimum wage, or mishandling workers’ tips, among other misconduct. The version of the bill that passed in June set the required bond at $150,000 for car washes where the workers are not unionized. For those allowing unionization, the bill set the bond requirement at $30,000.

Organized labor leaders praised the bill as necessary to combat the car wash industry’s long history of non-compliance with labor laws. “Rampant wage theft and employee mistreatment in the car wash industry demand the type of reform provided by this legislation,” Stuart Applebaum, president of the Retail Wholesale and Department Store Union, told Politico. Applebaum pointed out that, two weeks before the licensing bill passed, the state’s Labor Department raided eight New York City car washes as part of the department’s investigation into wage law and working conditions violations.

In some industries, failing to follow the law on minimum wages and overtime has been an epidemic problem. The New York minimum wage attorneys at Phillips & Associates are here to represent the rights of workers in the New York City area in claims involving wage theft, along with many other labor law violations. To schedule a free and confidential consultation with one of our experienced attorneys, contact us today online or at (212) 248-7431.

More blog posts:

New York AG’s $3.9M Settlement with Car Wash Owners Shines Light on Industry’s Underpayment of Workers, New York Employment Attorney Blog, Aug. 10, 2015

Diplomatic Immunity May Bar Lawsuits for Sexual Harassment Against Consular Officials in New York City, New York Employment Attorney Blog, Aug. 5, 2015

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