Ongoing fraud and employee abuse in the car-wash industry
The car-wash industry has become a platform for widespread wage fraud and other employee abuse in the state of Virginia, and could be costing around $28 million a year in loss of taxes for the state government.
Workers from the car wash industry, mostly Latin American immigrants, are suffering a growing form of payroll fraud with employers changing their status from full-time workers to independent contractors. Unpaid overtime work, insecure working conditions, and tax exceptions for employers are some of the industry´s present practices, according to an investigation by the Washington Post.
Gov. Terry McAuliffe, from the Democratic Party, has criticized these malpractices, and is trying to counter such labour violations, with business from these kinds of industries increasingly relying on contractors and subcontractors. However, labour advocates are eager to see more action on the issue.
Officials from Virginia have estimated there are as many as 214,000 workers improperly classified as independent contractors, with most of them in low-paid, unstable jobs dominated by immigrants.
According to the Washington Post, many car-wash businesses are changing the traditional drive-through model for auto dealerships where they prepare cars for resale. A number of owners will use the independent contractor status as a way to avoid paying income taxes and complying with federal law protecting full-time workers.