En EspaƱol Know Your Rights
Source: New York Daily News
Subject: Workplace Justice
Type: Media Coverage

State probes whether New York car-wash kingpin John Lage cheated workers out of wages

The state is investigating whether New York City’s car-wash kingpin has financed a life of luxury by cheating workers out of wages, the Daily News has learned.

Attorney General Eric Schneiderman last week slapped a subpoena on John Lage, who is linked to more than a dozen car washes and lives in a $900,000 lakefront house in Westchester.

Workers claim that the car washes pay $5.50 an hour — $1.75 less than the legal minimum — plus a pittance in tips. They don’t make overtime and complain about harsh working conditions.

Sources close to the investigation say Schneiderman is zeroing in on “serious” allegations of wage-and-hour violations.

Lage’s lawyer, Dennis Lalli, called the AG’s demand for the company’s paperwork “exceedingly aggressive,” but declined to comment further. Also subpoenaed were Lage’s son Michael Lage and associate Fernando Magalhaes.

Together, the three men are connected to at least 21 car washes across the city, according to public records. The state is probing just 10 of them.

The Lages and Magalhaes could not be reached directly for comment. Only a housekeeper was home at Lage’s turreted home, which overlooks a reservoir in Eastchester and had a Mercedes parked in the driveway.

Advocates say Lage is living large off the backs of workers who are too afraid to complain about low pay and harsh conditions.

“There’s just no excuse for the abuses at these car washes,” said Deborah Axt of Make the Road New York.

“These are not mom-and-pop business owners who are just trying to get by.”

Three years ago, Lage agreed to pay some of his workers $3.4 million in back pay and damages after a federal suit.

More of his car washes have come under scrutiny from Schneiderman against the backdrop of a unionization push.

Employees backed by Axt’s group and New York Communities for Change have held protests, and the Retail, Wholesale and Department Store Union has been meeting with them.

The issues include low pay, caustic cleaning solutions and lack of protective gear.

Julian Cruz, 32, a washer at LMC Car Wash and Lube on E. 109th St. in Manhattan, said he makes $5.50 an hour and no overtime for 12-hour shifts.

He gets tips, but it doesn’t always add up to the state-mandated minimum wage of $7.25 an hour, he said.

“One of my co-workers hurt his finger in the machine where they dry the towels last year, and they sent him home for a week without any pay,” said Cruz, a Mexican immigrant who lives in East Harlem.

In 2005, the U.S. Department of Labor sued Lage over conditions at six of his outfits in Brooklyn, the Bronx and Queens.

When he agreed to pay up in 2009, Secretary of Labor Hilda Solis called it a “loud wake-up call to other employers of vulnerable workers.”

Lage is paying what he agreed on schedule, but critics say he hasn’t cleaned up his act.

Now Schneiderman is looking into allegations of wage, tip and overtime violations and whether managers are breaking the law by sending workers home without pay when it rains.

The state is also investigating claims that workers have to pay for damage to cars out of their own pocket, sources said.

An umbrella campaign called WASH New York is in discussions with the Occupational Safety and Health Administration about possible violations at Lage-owned outfits, including improper gear.

The group says that while Lage owns one of the city’s biggest car-wash chains, conditions are bad industry-wide.

“It absolutely is just the tip of the iceberg,” said Axt, whose group is preparing to sue some car-wash owners.

Organizers spent months canvassing nearly 200 car washes and interviewed 89 workers. Two-thirds said they were paid less than minimum wage at times. Some took home just $125 a week.

More than 75% of the workers reported getting no overtime pay, even if they worked more than 100 hours a week. None had paid sick days, and only one was offered an employer-sponsored health plan.

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