IR #2005-29
Thursday June 30, 2005

Dean Fryer
Renée Bacchini

Car wash citied by labor commissioner for no workers' compensation
$29,350 for back wages and citations collected

San Francisco--The Department of Industrial Relation's Division of Labor Standards Enforcement (DLSE) today announced a $29,350 settlement agreement with Fidel Fernandez, the previous owner of Crescent Car Wash in La Palma, for penalties and back wages due four employees. The money was collected from an escrow account established in the sale of the business.

"This settlement shows that employers do not escape their responsibilities to their workers, nor can they circumvent the law by simply selling their business," said Donna M. Dell, state labor commissioner and chief of DLSE. "We will continue to aggressively pursue enforcement against employers who have no regard for labor law requirements and take advantage of their employees."

DLSE, in cooperation with the Employment Development Department, opened an investigation on Jan. 24 of this year following a tip that the company owed workers back wages and the owner was preparing to sell.

During the investigation it was found that the company was in the process of being sold and that an escrow account belonging to prior owner, Fidel Fernandez, was still open. A total of $29,650 was collected from the escrow account following a demand for the money. After a detailed interview with four employees seeking back wages it was found that minimum wage and overtime were not being properly paid.

The new owners, Raul Nolasco and Yolanda Huerta, took possession of the business on Jan. 3, but had no workers compensation coverage and were paying wages without deduction statements. The new owners have taken steps to bring their company into compliance after violations were pointed out. Based upon the findings of the investigation, citations issued to the new owners included:

"This enforcement action has been an opportunity for us to educate the employees and in this case the new employer on their rights and responsibilities," added Dell. "Education is an important element incorporated into our enforcement actions."

In a settlement agreement reached on June 25, it was agreed that DLSE would keep the $29,350 collected from the prior owner's escrow account and distribute $22,517 to settle the full back wages of the employees; and apply $6,833 towards citations against the former owner.

In California, regulations governing wages, hours, and working conditions are laid out in the Industrial Welfare Commission wage orders, which must be available at the worksite where employees can see and read them. Employers can access the Industrial Welfare Commission wage orders or other workplace postings on line at, click on workplace postings in the left navigation bar.