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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [08/14/2012]
Contact Name: Jose A. Carnevali or Deanne Amaden
Phone Number: (415) 625-2631 or x2630
Release Number: 12-1559-DAL

US Labor Department sues Santa Ana, Calif., car wash for not paying workers minimum wage, overtime

Lawsuit seeks back wages and liquidated damages for Happy Hands employees

SAN DIEGO — The U.S. Department of Labor has sued Z & H Happy Hands Corp., doing business as Happy Hands Carwash, for violations of the Fair Labor Standards Act's minimum wage, overtime and record-keeping provisions. The lawsuit resulted from an investigation by the department's Wage and Hour Division that found the Santa Ana employer had willfully and repeatedly failed to properly pay employees for all hours worked.

Employees swiped a magnetic card that registered their work start/stop times with a computer-based timekeeping program. The company then manipulated the data electronically to reflect substantially fewer hours worked. This resulted in both minimum wage and overtime pay violations.

"The manipulation of records by this employer gave the appearance that employees were paid properly but in reality, most employees worked more than 40 hours per week and earned less than $3.50 per hour," said Kenneth Morrison, director of the division's San Diego District Office. "This lawsuit sends the very clear message that we will do what it takes to protect the rights and pay of low-wage, vulnerable workers."

The department's Regional Office of the Solicitor in Los Angeles filed the suit in the U.S. District Court for the Central District of California. The suit asks the court to award the employees the minimum wage and overtime compensation they are due plus an equal amount in liquidated damages. If damages are not awarded, the suit asks the court to order the payment of prejudgment interest instead. The suit also seeks to permanently prohibit the defendants from future violations of the law.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular hourly rates for every hour they work beyond 40 per week. Employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.

The FLSA also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The department's Fact Sheet No. 77A, "Prohibiting Retaliation Under the Fair Labor Standards Act," is available at http://www.dol.gov/whd/regs/compliance/whdfs77a.htm.

For more information about the requirements of the FLSA, contact the Wage and Hour Division's San Diego office at 619-557-5110 or the division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.