New York state seeks $1.6 million in restitution, damages, and penalties from a Brooklyn car wash that allegedly cheated more than 150 workers out of $540,000 in wages and benefits over six years.

The lawsuit, filed Jan. 25 in state Supreme Court for Kings County, alleged that the owners of Tropical Breeze Car Wash denied the workers overtime pay for more than 16,000 hours. It’s the latest in a series of enforcement actions in the car wash industry that have...