Wage Theft Settlement: Luxury Car Wash Pays $1.2M

A California carwash has agreed to pay $1.2 million to resolve “widespread wage theft” and other labor law violations, according to the California Labor Commissioner’s Office (LCO).

The payout will reimburse 23 affected employees for unpaid wages.

State Investigators Uncover Wage Theft

Newport Auto Spa, Inc., d/b/a The Car Spa, is a luxury carwash in Newport Beach, California. 

An investigation by the LCO’s Bureau of Field Enforcement found Newport Auto Spa denied full payment of wages, including overtime, to employees working as ticket writers, washers, dryers and detailers. The employees were also required to remain on-site without pay during slow business hours and routinely prevented from taking uninterrupted meal breaks and rest breaks in violation of California law.

Some affected employees had worked at Newport Auto Spa for up to 20 years and were “consistently underpaid and expected to work off the clock,” the LCO said in a press release. 

Some long-tenured hourly workers avoid reporting wage theft out of loyalty. This allows violations to continue for years — and inflates back pay exposure (with possible interest and penalties) until state or federal agencies investigate.

“Employers who deny workers their full pay exploit their workforce and hurt honest businesses that follow the law,” said California Labor Commissioner Lilia García-Brower. “This settlement ensures these workers finally receive the wages they earned and sends a clear message that wage theft will not be tolerated.”

According to LCO, the 23 employees affected by this settlement will receive payments ranging from $8,500 to $92,800.

California’s one-hour premium pay per missed meal or rest break – on top of back wages – adds up fast for employers with operations elsewhere, where federal rules alone might suffice.

HR Insight: State Laws Raise the Bar 

Federal wage and hour law sets only the minimum standard – the floor. Many states, including California, often impose stricter requirements that raise the bar for employers.

For example, California mandates a 30‑minute, uninterrupted meal break for employees who work more than five hours, and a second meal break after 10 hours. It also requires a paid, 10‑minute rest break for every four hours (or major fraction thereof) worked. Moreover, when employees are denied those protected breaks or asked to remain on duty during them, then those missed breaks must be paid as premium wages. Failing to do so can result in back pay and penalties, as this case shows.

HR Action Steps:

• Regularly audit timekeeping and scheduling practices to identify missed break premiums or “off-the-clock” time before they become compliance liabilities.
• Deploy a modern workforce management system to automate break tracking, overtime flagging, and state-specific rules (like California’s meal and rest mandates), with audit-ready reports that sync to payroll.