Sep 1, 2009 4:21 pm US/Pacific
On The Money: Car Wash Restitution Fund
Reporting
Sam Shane
SACRAMENTO (CBS13) ―
California's economy is trying to make a comeback, but should businesses be forced to spend more than a $1 million into a special fund for workers when hardly anyone has filed a claim?
California has more than 1500 car washes, and is the only state to have a restitution fund for car wash workers who don't receive their full wages. Supporters say tats protection for workers, but critics like Jon Coupal, President of the Howard Jarvis Taxpayers Association, say that fund is now soaking California businesses.
"When these special funds are created, they are more difficult to audit. They create a bureaucracy and they create a drain on the economy," says Coupal.
There's $1.7 million in the car wash workers restitution fund, money provided by fees imposed on every car wash business in the state, but only a handful of workers have actually filed a claim.
"So far there have been three claims, totaling just under $93,000," says Erika Montrerroza, Dept. of Industrial Relations.
Only three claims in three years for just a fraction of what's in the fund, a special fund that's supposed to fade out of existence next year, in which case the $1.7 million could be used for education, transportation or other pressing needs.
But the California Assembly has already voted to extend the car wash worker's restitution fund another four years.
The bill's author is Oakland Assemblyman Sandre Swanson. He says the fund is necessary for potential future claims.
"In the car wash industry you find a lot of violations, minimum wage, you find working conditions that may expose these workers to chemicals," says Swanson.
Over the past two years, enforcement agents have documented hundreds of labor violations in the car wash industry, resulting in $10 million worth of penalties, so why have so few workers filed claims?
"There are a lot of intimidation that takes place and people are interested in maintaining their jobs," says Swanson.
Bill Carbonel is the Vice President of the Western Car Wash Association. He says that the car wash industry says it's doing a much better job of regulating itself, and the extra fees are hurting the business.
"Each operator, between the registration fee, the bond that we have to get, it's costing us $1000 a year to participate with this program," says Carbonel.
Which is money that's just sitting now in the car wash workers restitution fund.
The State Senate is expected to vote as early as this week on a bill extending the car wash workers restitution fund for another four years. If it passes, the Governor will ultimately decide the fate of that special fund.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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