Classic Car Wash employees will receive back wages of $160,000 for work performed between September 2003 and December 2006 following an investigation by the U.S Department of Labor’s Wage and Hour division.

“This is not the first Southern California case where we’ve found pay violations in this industry,” said George Friday Jr., Wage and Hour Division’s regional administrator for the western states. “These low-wage workers were not properly compensated for their hours worked, and I am pleased we are able to recover back wages for them. The Department of labor is committed to the strong enforcement of federal labor laws.”

Investigators found employees at the car wash, located on Devonshire and Reseda, were not paid the required minimum wage and overtime pay for all hours worked.

John Apikian, manager of Classic Car Wash, has an explanation for the penalties. He said a few employees harbored bad habits, such as drinking and doing drugs, and after growing tired of constant warnings they decided to go to the labor board and file a complaint.

“They essentially lied,” Apikian said.

Classic Car Wash admits their payroll system may have been flawed prior to the complaint but said the business has always paid employees fairly.

The old system allowed employees to request to be paid in cash since many did not have personal bank accounts. This led to discrepancies in payroll records.

As for the failure to pay overtime, Apikian says the “bad apples” would show up for work on their days off, sometimes under the influence of alcohol, and demand to get paid. He said some of the people getting paid from the lawsuit worked at the car wash for two weeks and quit, and now they are getting large chunks of cash.

The new and improved payroll sheet includes spaces for signatures next to each worker’s weekly income to verify that employees are satisfied with their wages.

Classic Car Wash did not agree with the penalties but decided fighting was getting too expensive.

“We fought it almost to the end, but realized it was going to cost us an arm and three legs if we were going to continue,” Apikian said. “We figured if we settle at least the employees will get something out of it.”

Aimed at ending litigation, a consent judgment was filed on April 17, signifying an agreement between the two parties to settle the matter with an enforceable judgment to pay the penalties plus a four percent interest rate.

Apikian blames the department of labor for encouraging low wage employees to complain, by waving around the prospect of settling for thousands of dollars.

“This is enough money for people to move back to Mexico and open up a little snack shop, and be financially set. It’s hard to pass up,” he said.

He said that department targets the car washing industry and it would take years to make that kind of money by simply working.

“I have been working here for seven years and it has been nothing but a good experience,” Lupita Ortiz, a cashier at Classic Car Wash, said. “Some of the guys have been here longer than me, and I have never heard of any problems.” Ortiz said the employees that complained have now left.

Another car wash manager does not share Apikian’s sentiments on the department of labor.

“An agent from the department came in once a few years ago to do a check, and there were no problems,” Juan Lucatero, manager of Handy J Car Wash in Mar Vista, said. “We take care of our guys very well, so we don’t have to worry.”