CA Increases Effort to Address Illegal Operations in Small Business

As part of an ongoing effort to address illegal operations in the underground economy, officials with the State Division of Labor Standards Enforcement (Labor Commissioner's Office) carried out a three-day August enforcement sweep by visiting 97 carwashes in Northern California.

Fifty-four of the carwash businesses were issued citations resulting in fines totaling more than $521,000, and thirty of them received work-stop notices until they can provide workers' compensation insurance for their employees and comply with labor laws, including:
l Providing work permits for minors
l Providing employees with an itemize wage deduction statement
l Paying overtime wages
l Paying the annual registration with the commissioner’s office
l Providing workers’ compensation coverage

“Our efforts are directed at illegally operating carwash businesses as part of the underground economy,” said California Labor Commissioner Angela Bradstreet. “These illegal operations have a negative impact on our state’s economy, do not provide the protection workers are legally afforded, and have an unfair advantage over competitors who do follow the law.”

A similar action in July investigated 72 businesses, netted 47 violations, and fined 28 of them, totaling $356,200 in fines to car washes in Los Angeles and Orange counties.

This action suggests that the Department of Labor Standards Enforcement may target other small businesses in the near future, in an effort to uncover unlicensed, illegal businesses in other industries.

“We will continue to strengthen our efforts in addressing these types of violations that are typically associated with the underground economy,” added Bradstreet.