A Houston-based vendor that provides detailer, car wash, and valet services to area dealerships recently agreed to pay $166K to resolve an employee misclassification complaint filed with the United States Department of Labor – but luckily area dealerships were never caught up in the legal web that ensnared the detailer. Instead, for the dealerships, this remained a “them” problem and not an “us” problem. According to the complaint, Majestic Dealership Services Inc. treated the workers providing these services to its dealership customers as independent contractors when they should have been classified as employees. The USDOL determined that these workers were actually Majestic’s employees and that the company had not paid them in compliance with applicable law. This insight summarizes the situation that unfolded and provides four suggestions your dealership can take to ensure this remains a “them” problem and not a “you” problem.
Dealerships Avoid Legal Troubles – But That’s Not Always the Case
Although it could have, there is no indication that the USDOL’s investigation ever focused on the dealerships using Majestic’s services. There are no reports that the federal authorities made any attempt to hold any of the dealers responsible for the unpaid wages. Majestic’s payment of the settlement amount has or should bring closure to this matter for all involved.
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