In the back area of a Fairfax County auto dealership, a crew of mostly undocumented workers provides a snapshot of the challenges that Virginia faces with its steadily transforming economy.
There, immigrants from Latin America rush to clean a steady line of used cars that their employer — an independent car-detailing company — was hired by the dealer to prepare for resale.
Each of them has bounced between several jobs in a loosely regulated industry that, according to lawsuits, is contributing to a growing form of payroll fraud that state officials estimate costs Virginia $28 million a year in lost taxes, after full-time workers are illegally categorized as independent contractors.
“It can be a difficult life,” said Paulo Rodriguez, who is attempting in Northern Virginia’s U.S. District Court to recover $23,000 from a company that, he says, forced him to work 72 hours per week without paid overtime when it classified him as an independent contractor. “Some people don’t last very long in this type of work.”
Gov. Terry McAuliffe (D) is trying to crack down on such labor violations as more businesses, which critics say are often trying to cut corners, rely on contractors and subcontractors.
State officials estimate that Virginia businesses are improperly classifying as many as 214,000 workers as independent contractors, mostly in industries that are employing immigrants and that are rife with other labor abuses.
“It impacts state revenue, and it’s no small amount of money,” said Virginia Secretary of Commerce and Trade Maurice Jones, who leads a state task force to reduce a problem that he says also is unfair to businesses that are playing by the rules.
“This is about fairness to the competitive marketplace and fairness to our workers,” Jones said.
It’s unclear how much McAuliffe can accomplish with a state legislature controlled by staunchly pro-business Republicans.
Organized labor has long viewed Virginia as weak on worker protections. Business advocates, meanwhile, credit the state’s regulatory environment for helping grow the economy.
The investigations unit of the state Department of Labor and Industry was briefly defunded by former Republican governor Robert F. McDonnell in 2013. McAuliffe reinstated the funds last year.
Labor advocates and some Democrats were eager to see more-aggressive enforcement under McAuliffe. But they have been frustrated that there are still just four state investigators, plus their supervisor, available to field the 19,360 complaints so far this year about possible wage and hour violations.
“It’s maddening,” said state Sen. Adam P. Ebbin (D-Alexandria,) who was chief deputy commissioner for the Department of Labor and Industry when U.S. Sen. Mark R. Warner (D-Va.) was governor.
“The governor has pointed us in the right direction,” Ebbin said of McAuliffe. “I’d like a lot more to be done. I think it’s my job and the General Assembly’s to work toward additional funding so we can deal with this.”
McAuliffe has had a complicated relationship with organized labor, courting both unions and pro-business groups during his 2013 campaign and declining to endorse an increase in the minimum wage. He has heavily courted Latinos, though, including at a recent Latino summit where activists praised him for supporting federal immigration reforms.
That courtship could continue into next year, when the governor’s close friend and fellow Democrat Hillary Rodham Clinton may be on the presidential ballot.
But some of those same activists also complained that work-site abuses experienced by Virginia’s 316,000 Latino immigrants are getting only modest attention.
“We’re looking for solutions to keep people stable, and there’s not a lot of that going on in Virginia right now,” said Molly Maddra-Santiago, director of the Centreville Labor Resource Center, an organization that helps day laborers. “Virginia has some laws on the books, but the enforcement structure needs some teeth.”
The Washington region’s steadily morphing car-wash industry illustrates abuses that are often unchecked in Virginia, attorneys and community activists say.
Many car-wash companies operate at multiple locations and are moving away from traditional drive-through or self-serve models. Instead, they are at auto dealerships that once used their own staff members to prepare cars for resale.
Although many employers legitimately rely on independent contractors for their work, others use the designation as a way to avoid paying income taxes and adhering to federal labor laws protecting full-time employees, federal officials say.
“We see that in the restaurant industry, we see that in agriculture, and it looks like now we’re seeing that in the automobile industry,” said Mark Lara, a U.S. Labor Department director who oversees enforcement in Northern Virginia, the District and Maryland. But the trend is difficult to track, which makes enforcement and restitution in private lawsuits challenging.
“If the company is careful not to exercise any supervisorial authority over the employees, there is no one you can sue,” said Thomas Hennessy, an attorney in Fairfax who represents car-wash workers in several lawsuits. “You’ve got this disreputable little company that is, in essence, judgment-proof.”
In Northern Virginia, two carwash companies — Presidential Detailing and New Look Auto Appearance — are defendants in a federal lawsuit that alleges that workers were improperly classified as independent contractors and that the employees were not allowed lunch breaks or paid for overtime. That case recently reached a settlement of $141,000, said Hennessy, who is representing the seven plaintiffs.
Ashley Charles Dean, an attorney for the companies, declined to comment.
Another company, VRY Auto Detail, is being sued in federal court by eight former employees who claim they are owed a total of $136,000 in unpaid wages.
That company’s attorney, Michael E. Veve, also declined to comment.
In interviews, workers in both cases described verbal abuse from bosses, demands to work until 1 a.m. and, in the cases of women, sexual harassment.
“It was torture,” Quiriat Ordoñez said in her native Spanish, about what she alleged were unwanted sexual advances from one of her Presidential Detailing supervisors.
Workers at VRY Auto Detail said their bosses often bounced paychecks or underpaid them.
“He gave me three checks without funds,” Wilmar Valencia said about his former boss. “I asked him why he did that, and then he gave me another check without money.”
Authorities in other metropolitan areas have recently imposed stiffer regulations on car washes — part of a broader national push to improve conditions across the board for low-wage employees.
New York City requires car washes to become licensed and to buy $150,000 surety bonds in case they’re fined or sued for wage theft. Unionized car washes have to purchase $30,000 bonds.
California has a similar law, allowing the United Steelworkers union to win contracts in 30 Los Angeles-area car washes that guarantee salaries of at least 20 percent above the state minimum wage of $9 per hour.
But in Virginia, where unions are struggling to hold on to small memberships, the problems in car washes and other blue-collar jobs have festered — amounting to $2.1 million in total outstanding claims so far this year, according to state figures. The agency has collected nearly $397,000 in unpaid wages so far this year.
“I think most unions that are attempting to organize are trying to achieve greater density, rather than break into elements like carwashes,” says John Boardman, head of Unite-Here Local 25, which represents hotel workers and recently joined an effort to elect state legislators more favorable to low-wage workers.
C. Ray Davenport, commissioner of the Virginia Department of Labor and Industry, said his agency is short on resources to pursue violations more aggressively.
The agency recently stiffened penalties for employers who improperly classify their workers as independent contractors, he said. But because of federal sequestration cuts and state budget problems, the agency has 40 of its 191 positions unfilled in its $14 million annual budget, Davenport said.
“If you have it fully staffed, there’s a whole lot more we can do,” he said.
For car-wash workers, the goals are more immediate.
Many work two or three jobs to earn enough for rent, food and aid to send to relatives in their homelands.
Their days are mundane, working as long as four hours on one car and sometimes three cars per day in a cycle of degreasing motors, vacuuming floorboards, drenching cars in soap and water and, ultimately, buffing them to a reflective shine.
Few wear protective gear to guard against a stew of skin-burning chemicals used in the process.
Recently, Ordoñez and her husband, Allan Cuello Aguilar, launched their own car-detailing company, AK American Detail, hiring some former co-workers in hopes of competing against their former bosses.
The couple pledged to treat their new employees fairly.
“I know the ugliness of mistreatment,” Cuello Aguilar said, but he conceded that he now knows the pressures of keeping a business afloat in what can be a cut-throat automobile sales industry, where there is high demand for fast work and quick sales. Each car that is prepared and washed means $80.
“The privilege belongs to the dealer,” Cuello Aguilar said, while watching one worker wax a previously filthy SUV that took all morning to finish. “If he has eight or nine cars for the day, I can’t leave. If I leave, we leave behind four or five cars. That’s money.”