(1)The Barbering and Cosmetology Act provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements. That act requires the board to inspect an establishment within 90 days after issuing the establishment a license and requires the board to maintain a program of random and targeted inspections of establishments, as specified. A violation of the Barbering and Cosmetology Act is a misdemeanor unless a specific penalty is otherwise provided.

This bill would require, on and after July 1, 2017, an establishment licensed by the board to post a notice in English, Spanish, Vietnamese, and Korean regarding workplace rights and wage and hour laws, as described in paragraph (2), in a conspicuous location in clear view of employees and where similar notices are customarily posted. The bill would require the board to inspect an establishment for compliance with that requirement when it conducts the above-mentioned inspection, and would provide that a violation of that posting requirement is punishable as an administrative fine.

(2)Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

This bill would require the Labor Commissioner, on or before June 1, 2017, to create a model posting notice in English, Spanish, Vietnamese, and Korean pertaining to the workplace rights and wage and hour laws for employees of establishments licensed under the Barbering and Cosmetology Act. The bill would require the model posting notice to be developed using plain language and would require the commissioner to post the notice in all of the specified languages on the commissioners Internet Web site, as specified. The bill would require the notice to contain, at a minimum, certain information, including laws regarding overtime compensation. The bill would require the model notice to be translated into specified languages.

(1)The Barbering and Cosmetology Act provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements. That act requires the board to inspect an establishment within 90 days after issuing the establishment a license and requires the board to maintain a program of random and targeted inspections of establishments, as specified. A violation of the Barbering and Cosmetology Act is a misdemeanor unless a specific penalty is otherwise provided.

This bill would require, on and after July 1, 2017, an establishment licensed by the board to post a notice in English, Spanish, Vietnamese, and Korean regarding workplace rights and wage and hour laws, as described in paragraph (2), in a conspicuous location in clear view of employees and where similar notices are customarily posted. The bill would require the board to inspect an establishment for compliance with that requirement when it conducts the above-mentioned inspection, and would provide that a violation of that posting requirement is punishable as an administrative fine.

(2)Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

This bill would require the Labor Commissioner, on or before June 1, 2017, to create a model posting notice in English, Spanish, Vietnamese, and Korean pertaining to the workplace rights and wage and hour laws for employees of establishments licensed under the Barbering and Cosmetology Act. The bill would require the model posting notice to be developed using plain language and would require the commissioner to post the notice in all of the specified languages on the commissioners Internet Web site, as specified. The bill would require the notice to contain, at a minimum, certain information, including laws regarding overtime compensation. The bill would require the model notice to be translated into specified languages.

(1)The Barbering and Cosmetology Act provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements. That act requires the board to inspect an establishment within 90 days after issuing the establishment a license and requires the board to maintain a program of random and targeted inspections of establishments, as specified. A violation of the Barbering and Cosmetology Act is a misdemeanor unless a specific penalty is otherwise provided.

This bill would require, on and after July 1, 2017, an establishment licensed by the board to post a notice in English, Spanish, Vietnamese, and Korean regarding workplace rights and wage and hour laws, as described in paragraph (2), in a conspicuous location in clear view of employees and where similar notices are customarily posted. The bill would require the board to inspect an establishment for compliance with that requirement when it conducts the above-mentioned inspection, and would provide that a violation of that posting requirement is punishable as an administrative fine.

(2)Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

This bill would require the Labor Commissioner, on or before June 1, 2017, to create a model posting notice in English, Spanish, Vietnamese, and Korean pertaining to the workplace rights and wage and hour laws for employees of establishments licensed under the Barbering and Cosmetology Act. The bill would require the model posting notice to be developed using plain language and would require the commissioner to post the notice in all of the specified languages on the commissioners Internet Web site, as specified. The bill would require the notice to contain, at a minimum, certain information, including laws regarding overtime compensation. The bill would require the model notice to be translated into specified languages.

(1)The Barbering and Cosmetology Act provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements. That act requires the board to inspect an establishment within 90 days after issuing the establishment a license and requires the board to maintain a program of random and targeted inspections of establishments, as specified. A violation of the Barbering and Cosmetology Act is a misdemeanor unless a specific penalty is otherwise provided.

This bill would require, on and after July 1, 2017, an establishment licensed by the board to post a specified notice regarding workplace rights and wage and hour laws, as described in paragraph (2), in a conspicuous location in clear view of employees and where similar notices are customarily posted. The bill would require the board to inspect an establishment for compliance with that requirement when it conducts the above-mentioned inspection, and would provide that a violation of that posting requirement is punishable as an administrative fine.

(2)Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

This bill would require the Labor Commissioner, on or before June 1, 2017, to create a model posting notice pertaining to the workplace rights and wage and hour laws for employees of establishments licensed under the Barbering and Cosmetology Act. The bill would require the model posting notice to contain clear and concise be developed using plain language and would require the commissioner to post the notice on the commissioners Internet Web site, as specified. The bill would require the notice to contain, at a minimum, certain information, including laws regarding overtime compensation. The bill would authorize the commissioner to consult with the Barbering and Cosmetology Board about providing the notice in additional languages other than English. The bill would require the model notice to be translated into specified languages.

(1)The Barbering and Cosmetology Act provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements. That act requires the board to inspect an establishment within 90 days after issuing the establishment a license and requires the board to maintain a program of random and targeted inspections of establishments, as specified. A violation of the Barbering and Cosmetology Act is generally a misdemeanor. misdemeanor unless a specific penalty is otherwise provided.

This bill would require the State Board of Barbering and Cosmetology to deny the renewal of a license to an establishment that provides nail care services if that establishment is conducting business in violation of the above provision regarding final judgments arising from an employers nonpayment of wages for work performed in this state, and would require the board to verify with the Labor Commissioner that such an establishment is not conducting business in violation of those provisions. The bill would also require the Labor Commissioner to notify the board if such an establishment is conducting business in violation of those provisions. The bill would authorize such an establishment to provide evidence to the board that it is not conducting business in violation of those provisions. require, on and after July 1, 2017, an establishment licensed by the board to post a specified notice in a conspicuous location in clear view of employees and where similar notices are customarily posted. The bill would require the board to inspect an establishment for compliance with that requirement when it conducts the above-mentioned inspection, and would provide that a violation of that posting requirement is punishable as an administrative fine.

(2)Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

This bill would require an establishment, which provides nail care services and is required to be licensed as an establishment under the Barbering and Cosmetology Act, to register with the division and receive specified training regarding workplace rights and wage and hour laws, including, but not limited to, overtime compensation, and would also require the establishment to arrange for the training to be provided to its employees. The bill would require the division to provide that training to such an establishment and its employees. The bill would authorize the division to contract with nonprofit vendors to perform that training and would require the division to consider certain factors when approving a nonprofit vendor, including that the vendor has familiarity with the labor laws to be discussed during the training. The bill would authorize the division to charge a fee to each nail care establishment, not to exceed the reasonable regulatory cost of providing the training, and would require that fee to be deposited into the Nail Care Establishment Training Fund, which would be created by this bill. The bill would continuously appropriate the money in that fund solely for the purposes of providing the required training. The bill would also define various terms for these purposes. the Labor Commissioner, on or before June 1, 2017, to create a model posting notice pertaining to the workplace rights and wage and hour laws for employees of establishments licensed under the Barbering and Cosmetology Act. The bill would require the model posting notice to contain clear and concise language and would require the commissioner to post the notice on the commissioners Internet Web site, as specified. The bill would require the notice to contain, at a minimum, certain information, including laws regarding overtime compensation. The bill would authorize the commissioner to consult with the Barbering and Cosmetology Board about providing the notice in additional languages other than English.

Existing law permits the Occupational Safety and Health Standards Board within the Department of Industrial Relations to adopt occupational health and safety standards to protect the welfare of employees. The Division of Occupational Safety and Health (division) enforces occupational safety and health standards and orders. Certain violations of these standards and orders are crimes. Existing law also requires the division to report annually to the Legislature specified matters, including providing recommendations for legislation to improve the ability of the division to provide safety in employment.

This bill would also require the division to include in its report to the Legislature, recommendations to improve the ability of the division to maximize health outcomes in places of employment.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2437

Author:(Ting)

As Amended Ver:August 15, 2016

Majority vote

Original Committee Reference: B. & P.

SUMMARY: Requires on and after July 1, 2017, an establishment licensed by the Board of Barbering and Cosmetology (BBC) to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Labor Commissioner (Commissioner), as specified, and requires the BBC to inspect for compliance of the posting requirement. Specifically, this bill:

1. Requires on and after July 1, 2017, an establishment licensed by the BBC to post a notice, developed by the Commissioner, in a manner that complies with specified requirements of the Labor Code in a conspicuous location in clear view of employees and where similar notices are customarily posted, and further requires the BBC to inspect for compliance, as specified.
2. Requires the notice to be posted in English, Spanish, Vietnamese, and Korean.
3. States that a violation of the posting requirement is punishable by an administrative fine, and is not punishable as a misdemeanor, as specified.
4. Requires the Commissioner to develop a model notice pertaining to workplace rights and wage and hour laws for employees of licensed BBC establishments, on or January 1, 2017.
5. Requires the model posting notice to be developed using plain language in all the languages required in 2) above, and be accessible on the Commissioner's Web site so that it is reasonably accessible to an establishment that must comply with the posting requirement, as specified.
6. Requires the model notice to contain the following information:
   1. Misclassification of an employee as an independent contractor;
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods;
   3. Tip or gratuity distribution;
   4. How to report violations of the law;
   5. Business expense reimbursement; and,
   6. Protection from retaliation.
7. Requires the model notice to be translated into Spanish, Vietnamese and Korean.

The Senate amendments delete the authorization for the Commissioner to consult with the BBC in providing the model notice in additional languages other than English, and instead require the model notice to be translated into Spanish, Vietnamese and Korean.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill will result in negligible state costs.

COMMENTS: Purpose. This bill requires establishments licensed under the BBC to post a model notice, developed by the Commissioner, pertaining to workplace rights and wage and hour laws beginning July 1, 2017. This bill is sponsored by the Community Health for Asian Americans and Asian Americans Advancing Justice. According to the author,

"Due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law. There are approximately 8,000 nail salons operating in California with over 95,000 licensed nail salon technicians, the majority of whom are women of color. An estimated 80% of nail salon owners and employees throughout the state are Vietnamese immigrant women who often have limited English proficiency. Employees are commonly misclassified as independent contractors and frequently earn less than minimum wage while working long hours without overtime pay or regular meal or rest breaks. Additionally, due to misclassification, many nail salon employees and owners mistakenly believe they are not entitled to worker's compensation, unemployment, disability or social security benefits. If poor business practices continue to be passed on from generation to generation, failure to address this issue will perpetuate a cycle of misinformation and negligence.

"[This bill] supports the California nail salon industry by requiring business owners of a nail salon to post a model notice – in the language its workers can understand – regarding worker's rights surrounding wages, misclassification of an employee as an independent contractor, overtime, tip distribution, meal periods, rest breaks, protection from retaliation, and where to report violations of the law. This bill intends to educate business owners, employers, and employees about existing labor laws given that many nail salons appear to be in violation of these laws."

Background. The BBC is responsible for licensing and regulating barbers, cosmetologists, estheticians, electrologists, manicurists, apprentices and establishments. Establishment licensees do not need to hold a separate professional license. In order to obtain an establishment license, an individual must submit an application to the BBC and pay the appropriate fee. The application must contain information about the applicant, whether it is a person, firm, or corporation that will be operating the establishment, and specifically prohibits issuing an establishment license if the individual, or each officer, director, or partner has committed any acts or crimes, as specified, which are grounds for denial. The types of establishments that the BBC regulates, includes, but is not limited to, nail salons, barbers, and hair salons. Currently, the BBC licenses approximately 41,000 establishments.

The BBC is required to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to health and safety. While the BBC inspects establishments for compliance with applicable health and safety requirements, it does not have jurisdiction over the enforcement of labor laws. However, this bill will require the BBC to inspect for compliance with this posting requirement.

Currently, the BBC does not differentiate between the types of establishments it licenses. An establishment licensee may operate a business to conduct any of the professional services for which a license is required, further establishment owners (establishment licensees) do not need to hold a separate professional license in order to own and operate an establishment; however, Business and Professions Code (BPC) Section 7348 specifies that an establishment must at all times be in the charge of a licensed person.

BBC Enforcement. Existing law permits the BBC to take enforcement actions against an establishment for issues mainly pertaining to health and safety violations. Specifically related to nail salons, pursuant to BPC Section 7403.2 if an inspection of an establishment finds that health and safety laws related to manicure and pedicure equipment have been violated and a citation is issued, the BBC may without advance hearing temporarily suspend the license. In order to reinstate that license, the licensee would have to comply with numerous remediation requirements including an additional inspection and pay all citations and fines as specified. In addition, BPC 7403.5 permits the BBC to, upon written notice, immediately close an establishment which upon inspection, is found to have health and safety violations of such a sever nature as to pose immediate threat to public health and safety. BBC does not currently have jurisdiction over labor issues or those establishment employees that are not licensees of the BBC.

Joint Hearing on Labor Practices, Health, and Safety in California Nail Salons. Labor concerns for nail technicians were raised in a May 7, 2015, article from the New York Times, "The Price of Nice Nails," in which it was reported: "The New York Times interviewed more than 150 nail salon workers and owners, in four languages, and found that a vast majority of workers are paid below minimum wage; sometimes they are not even paid. Workers endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse. Employers are rarely punished for labor and other violations."

In August of 2015, the Assembly Select Committees on Women in the Workplace, and Girls and Women of Color held a joint hearing with the Assembly Committees on Health, Business and Professions, and Labor and Employment, which focused on both the health and safety of licensees regarding exposure to chemicals and other ingredients, and concerns about labor practices in nail salons. The purpose of that hearing was for state agencies, advocates, and industry to obtain and share information, address concerns, and discuss policy recommendations regarding nail salon practices. As noted in background information provided by those Committees, "The jurisdiction for labor law compliance lies with California's Department of Industrial Relations (DIR) and Division of Labor Standards Enforcement within DIR. Labor law violations which occur in nail salons may not be as unique as the health concerns for workers however outreach to workers and owners about product safety is an avenue to improve education about employee rights and the consequences of labor violations." This bill aims to help address labor issues by requiring training requiring licensed establishments to post a notice pertaining to workplace rights and wage and hour laws in clear view of employees. The model notice is required to provide specified information including, but not limited to, information about tip or gratuity distribution, misclassification of an employee as an independent contractor, and protection from retaliation, among others.

Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0004436

 THIRD READING  

Bill No: AB 2437

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 6-1, 6/20/16

AYES: Hill, Block, Hernandez, Jackson, Mendoza, Wieckowski

NOES: Gaines

NO VOTE RECORDED: Bates, Galgiani

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 50-27, 5/23/16 - See last page for vote

SUBJECT:

SOURCE: Asian Americans Advancing Justice - California

Community Health for Asian Americans

DIGEST: This bill requires an establishment licensed by the Board of Barbering and Cosmetology (BBC), on and after July 1, 2017, to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Chief of the Division of Labor Standards Enforcement (Labor Commissioner), and requires the BBC to inspect for compliance of the posting requirement.

Senate Floor Amendments of 8/15/16 ensure that the notice required in this bill is posted in English, Spanish, Vietnamese and Korean, the most common languages spoken by BBC licensees.

ANALYSIS:

Existing law:

1. Requires BBC to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to the public health and safety and the conduct and operation of establishments.
   (Business and Professions Code (BPC) § 7353)
2. Provides that failure to display a license or health and safety rules and regulations in a conspicuous place is grounds for disciplinary action by BBC. (BPC § 7404)
3. Establishes the Dymally-Alatorre Bilingual Services Act (Dymally-Alatorre) which requires each state agency to conduct a survey, related to its bilingual services, of each of its statewide offices which render services to the public every two years to determine specified information, and to report results and any additional information requested to the California Department of Human Resources. Dymally-Alatorre also requires each agency that serves a substantial number of non-English-speaking people who comprise 5% or more of the people served to develop an implementation plan, as specified, in every odd-numbered year, and to submit the implementation plan to the Department for its review. (Government Code § 7290 et seq.)
4. Establishes the Division of Labor Standards Enforcement and grants the Labor Commissioner and his or her employees free access to all places of labor. States that any person, or agent or officer thereof, who refuses admission to the Labor Commissioner or deputy or agent or who, upon request, willfully neglects or refuses to furnish them any statistics or information, pertaining to their lawful duties is guilty of a misdemeanor, punishable by a fine of not more than $1,000. (Labor Code (LAB) §§ 83 and 90)
5. Requires, at the time of hiring, an employer to provide each employee a written notice, in the language the employer normally uses to communicate, employment-related information to the employee containing information about the rate or rates of pay. (LAB § 2810.5)
6. Requires employers in California to post information related to wages, hours and working conditions in an area frequented by employees where the information may be easily read during the workday. Requires health and safety information posting in certain workplaces.

This bill:

1. Requires the Labor Commissioner, on or before June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of BBC licensed establishments. Requires the model posting notice to be developed using plain language and to be accessible on the Labor Commissioner's Web site. Requires the model posting notice to be translated into Spanish, Vietnamese and Korean and include information, on:
   1. Misclassification of an employee as an independent contractor;
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods;
   3. Tip or gratuity distribution;
   4. How to report violations of the law;
   5. Business expense reimbursement; and
   6. Protection from retaliation.
2. Requires a BBC licensed establishment, on and after July 1, 2017, to post the model notice translated into Spanish, Vietnamese and Korean developed by the Labor Commissioner in a conspicuous location in clear view of employees and where similar notices are customarily posted.
3. Requires BBC to inspect for compliance with this posting requirement when it conducts inspections. Clarifies that a violation of the notice requirement is punishable by an administrative fine rather than a misdemeanor.

Background

Concerns about nail salons and experiences of nail salon employees. Nail salons have been the focus of studies and media reports in recent years stemming from health, safety and labor concerns in these settings. In May 2015, the New York Times (NYT) published two articles stemming from interviews with more than 150 nail salon workers and owners that found that a cast majority of workers are paid below minimum wage and are sometimes not even paid. The articles found that workers “endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse.” The NYT also found that employers are rarely punished for labor and other violations and that in 2014, when the New York State Labor Department conducted its first nail salon sweep, investigators inspected 29 salons and found 116 wage violations. While only about a quarter of the more than 100 workers said they were paid an amount equivalent to that state’s minimum hourly wage, all but three said they had wages withheld in ways considered illegal, such as never getting overtime and many were unaware that working unpaid was against the law and their alarmingly low wages are also illegal.

A February 2016 follow up report in the NYT articles found that 40 percent of the salons inspected, as part of the Labor Department’s increased efforts to inspect following the original May articles, had underpaid employees, including one worker at a Manhattan salon who was paid $30 a day for 10-hour shifts, a manicurist in Queens who was paid only $200 for a 50-hour workweek, had manicurists at seven salons who were forced to work for no pay or had to pay salon owners a fee, ostensibly to learn the trade and several owners admitted to submitting fake payroll records in an effort to fool investigators. The article highlighted that employers are often unfamiliar with the intricacies of state labor laws.

On August 26, 2015, the Assembly Select Committee on Women in the Workplace, the Assembly Select Committee on Girls and Women of Color, and the Assembly Committees on Health, Business and Professions, and Labor held a joint informational hearing titled "Labor Practices, Health, and Safety in California Nail Salons." The purpose of the hearing was to obtain information, address concerns, and discuss policy recommendations regarding nail salon practices from state agencies, advocates, and industry.

The author notes that nail salon owners have expressed that they are oftentimes unaware of labor laws and that perhaps training is in order. This bill sets forth requirements for all BBC establishments, including nail salons.

Current posting requirements. Employers in the state of California are required to post information related to wages, hours and working conditions, health and safety in an area frequented by employees where the information may be easily read during the workday as well as health and safety information. Personal services industry employers must post wage, hour and working conditions information contained in Wage Order #2 developed by the Industrial Welfare Commission. All employers must post information outlining California's minimum wage and minimum wage pursuant to the federal Fair Labor Standards Act, must post information about basic requirements and procedures for compliance with the state's job safety and health laws and regulations and must post information about prohibitions on discrimination and harassment in employment.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/16/16)

Asian Americans Advancing Justice - California (co-source)

Community Health for Asian Americans (co-source)

California Healthy Nail Salon Collaborative

OPPOSITION: (Verified 8/16/16)

None received

ARGUMENTS IN SUPPORT: Supporters believe that this bill will help workers licensed by BBC to know about and advocate for their rights in the workplace and help ensure that establishment owners comply with California labor law.

Supporters note that due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law and state that this bill will provide critical information that will allow confused employers to assess and correct any employment practices that violate labor law.

ASSEMBLY FLOOR: 50-27, 5/23/16

AYES: Alejo, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon

NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Steinorth, Wagner, Waldron, Wilk

NO VOTE RECORDED: Arambula, Eggman, Patterson

Prepared by:

8/16/16 17:38:40

**** END ****

 THIRD READING  

Bill No: AB 2437

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 6-1, 6/20/16

AYES: Hill, Block, Hernandez, Jackson, Mendoza, Wieckowski

NOES: Gaines

NO VOTE RECORDED: Bates, Galgiani

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 50-27, 5/23/16 - See last page for vote

SUBJECT:

SOURCE: Asian Americans Advancing Justice - California

Community Health for Asian Americans

DIGEST: This bill requires an establishment licensed by the Board of Barbering and Cosmetology (BBC), on and after July 1, 2017, to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Chief of the Division of Labor Standards Enforcement (Labor Commissioner), and requires the BBC to inspect for compliance of the posting requirement.

ANALYSIS:

Existing law:

1. Requires BBC to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to the public health and safety and the conduct and operation of establishments.
   (Business and Professions Code (BPC) § 7353)
2. Provides that failure to display a license or health and safety rules and regulations in a conspicuous place is grounds for disciplinary action by BBC. (BPC § 7404)
3. Establishes the Dymally-Alatorre Bilingual Services Act (Dymally-Alatorre) which requires each state agency to conduct a survey, related to its bilingual services, of each of its statewide offices which render services to the public every two years to determine specified information, and to report results and any additional information requested to the California Department of Human Resources. Dymally-Alatorre also requires each agency that serves a substantial number of non-English-speaking people who comprise 5% or more of the people served to develop an implementation plan, as specified, in every odd-numbered year, and to submit the implementation plan to the Department for its review. (Government Code § 7290 et seq.)
4. Establishes the Division of Labor Standards Enforcement and grants the Labor Commissioner and his or her employees free access to all places of labor. States that any person, or agent or officer thereof, who refuses admission to the Labor Commissioner or deputy or agent or who, upon request, willfully neglects or refuses to furnish them any statistics or information, pertaining to their lawful duties is guilty of a misdemeanor, punishable by a fine of not more than $1,000. (Labor Code (LAB) §§ 83 and 90)
5. Requires, at the time of hiring, an employer to provide each employee a written notice, in the language the employer normally uses to communicate, employment-related information to the employee containing information about the rate or rates of pay. (LAB § 2810.5)
6. Requires employers in California to post information related to wages, hours and working conditions in an area frequented by employees where the information may be easily read during the workday. Requires health and safety information posting in certain workplaces.

This bill:

1. Requires the Labor Commissioner, on or before June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of BBC licensed establishments. Requires the model posting notice to be developed using plain language and to be accessible on the Labor Commissioner's Web site. Requires the model posting notice to be translated into Spanish, Vietnamese and Korean and include information, on:
   1. Misclassification of an employee as an independent contractor;
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods;
   3. Tip or gratuity distribution;
   4. How to report violations of the law;
   5. Business expense reimbursement; and
   6. Protection from retaliation.
2. Requires a BBC licensed establishment, on and after July 1, 2017, to post the model notice developed by the Labor Commissioner in a conspicuous location in clear view of employees and where similar notices are customarily posted.
3. Requires BBC to inspect for compliance with this posting requirement when it conducts inspections. Clarifies that a violation of the notice requirement is punishable by an administrative fine rather than a misdemeanor.

Background

Concerns about nail salons and experiences of nail salon employees. Nail salons have been the focus of studies and media reports in recent years stemming from health, safety and labor concerns in these settings. In May 2015, the New York Times (NYT) published two articles stemming from interviews with more than 150 nail salon workers and owners that found that a cast majority of workers are paid below minimum wage and are sometimes not even paid. The articles found that workers “endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse.” The NYT also found that employers are rarely punished for labor and other violations and that in 2014, when the New York State Labor Department conducted its first nail salon sweep, investigators inspected 29 salons and found 116 wage violations. While only about a quarter of the more than 100 workers said they were paid an amount equivalent to that state’s minimum hourly wage, all but three said they had wages withheld in ways considered illegal, such as never getting overtime and many were unaware that working unpaid was against the law and their alarmingly low wages are also illegal.

A February 2016 follow up report in the NYT articles found that 40 percent of the salons inspected, as part of the Labor Department’s increased efforts to inspect following the original May articles, had underpaid employees, including one worker at a Manhattan salon who was paid $30 a day for 10-hour shifts, a manicurist in Queens who was paid only $200 for a 50-hour workweek, had manicurists at seven salons who were forced to work for no pay or had to pay salon owners a fee, ostensibly to learn the trade and several owners admitted to submitting fake payroll records in an effort to fool investigators. The article highlighted that employers are often unfamiliar with the intricacies of state labor laws.

On August 26, 2015, the Assembly Select Committee on Women in the Workplace, the Assembly Select Committee on Girls and Women of Color, and the Assembly Committees on Health, Business and Professions, and Labor held a joint informational hearing titled "Labor Practices, Health, and Safety in California Nail Salons." The purpose of the hearing was to obtain information, address concerns, and discuss policy recommendations regarding nail salon practices from state agencies, advocates, and industry.

The author notes that nail salon owners have expressed that they are oftentimes unaware of labor laws and that perhaps training is in order. This bill sets forth requirements for all BBC establishments, including nail salons.

Current posting requirements. Employers in the state of California are required to post information related to wages, hours and working conditions, health and safety in an area frequented by employees where the information may be easily read during the workday as well as health and safety information. Personal services industry employers must post wage, hour and working conditions information contained in Wage Order #2 developed by the Industrial Welfare Commission. All employers must post information outlining California's minimum wage and minimum wage pursuant to the federal Fair Labor Standards Act, must post information about basic requirements and procedures for compliance with the state's job safety and health laws and regulations and must post information about prohibitions on discrimination and harassment in employment.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/3/16)

Asian Americans Advancing Justice - California (co-source)

Community Health for Asian Americans (co-source)

California Healthy Nail Salon Collaborative

OPPOSITION: (Verified 8/3/16)

None received

ARGUMENTS IN SUPPORT: Supporters believe that this bill will help workers licensed by BBC to know about and advocate for their rights in the workplace and help ensure that establishment owners comply with California labor law.

Supporters note that due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law and state that this bill will provide critical information that will allow confused employers to assess and correct any employment practices that violate labor law.

ASSEMBLY FLOOR: 50-27, 5/23/16

AYES: Alejo, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon

NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Steinorth, Wagner, Waldron, Wilk

NO VOTE RECORDED: Arambula, Eggman, Patterson

Prepared by:

8/3/16 19:36:06

**** END ****

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: AB 2437 Hearing Date: June 20, 2016

Subject: Barbering and cosmetology: establishments: posting notice

SUMMARY: Requires an establishment licensed by the Board of Barbering and Cosmetology (BBC), on and after July 1, 2017, to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Chief of the Division of Labor Standards Enforcement (Labor Commissioner), and requires the BBC to inspect for compliance of the posting requirement.

Existing law:

1. Provides for the licensure regulation of the practice of barbering, cosmetology and electrolysis under Act by the BBC. (Business and Professions Code (BPC) § 7300 et. seq.)
2. Defines “establishment” as any premises, building or part of a building where any activity licensed under the Act is practiced and sets forth requirements for licensure as an establishment by BBC. (BPC §§ 7346-7352)
3. Requires operators' licenses to be conspicuously posted at their primary work stations and requires establishment licenses to be conspicuously posted in the reception areas. (16 California Code of Regulations 965)
4. Requires BBC to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to the public health and safety and the conduct and operation of establishments. (BPC § 7353)
5. Requires licensees to report to BBC upon renewal, including: (BPC § 7401)
6. License status, defined as either practicing full time in the state, practicing full time in another state, practicing part-time in the state, not working in the industry, retired or other practice that BBC defines.
7. Identification as either an employee, independent contractor, booth renter or salon owner.
8. For establishments, whether a booth renter is operating in the establishment or whether an independent contractor is operating in the establishment.
9. Provides that failure to display a license or health and safety rules and regulations in a conspicuous place is grounds for disciplinary action by BBC. (BPC § 7404)
10. Establishes the Dymally-Alatorre Bilingual Services Act (Dymally-Alatorre) which requires each state agency to conduct a survey, related to its bilingual services, of each of its statewide offices which render services to the public every two years to determine specified information, and to report results and any additional information requested to the California Department of Human Resources (CalHR). Requires the survey to contain a detailed description of complaints regarding language access received by the agency. Dymally-Alatorre also requires each agency that serves a substantial number of non-English-speaking people who comprise 5% or more of the people served to develop an implementation plan, as specified, in every odd-numbered year, and to submit the implementation plan to the department for its review. Additionally, Dymally-Alatorre requires CalHR, if it determines that a state agency has not made reasonable progress toward complying with the Act, to issue orders that it deems appropriate to effectuate the purposes of Dymally-Alatorre. (Government Code Section 7290 et seq.)
11. Establishes the Division of Labor Standards Enforcement (DLSE) and grants the Chief of DLSE (Labor Commissioner) and his or her employees free access to all places of labor. States that any person, or agent or officer thereof, who refuses admission to the Labor Commissioner or deputy or agent or who, upon request, willfully neglects or refuses to furnish them any statistics or information, pertaining to their lawful duties is guilty of a misdemeanor, punishable by a fine of not more than one thousand dollars ($1,000). (Labor (LAB) Code §§ 83 and 90)
12. States the policy of this state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions or for employers that have not secured the payment of compensation, and to protect employers who comply with the law from those who attempt to gain a competitive advantage at the expense of their workers by failing to comply with minimum labor standards. Requires the Labor Commissioner to adopt an enforcement plan for the field enforcement unit which shall identify priorities for investigations to be undertaken by the unit that ensure the available resources will be concentrated in industries, occupations, and areas in which employees are relatively low paid and unskilled, and those in which there has been a history of violations and those with high rates of noncompliance with the law. (LAB § 90.5)
13. Authorizes the Labor Commissioner, after investigation and upon determination that wages or monetary benefits are due and unpaid to any worker in the State of California, to collect such wages or benefits on behalf of the worker without assignment of such wages or benefits to the Commissioner. (LAB § 96.7)
14. Authorizes the Labor Commissioner to investigate employee complaints and provide for a hearing in any action to recover wages, penalties, and other demands for compensation. (LAB § 98)
15. Prohibits an employer or agent from collecting, taking, or receiving any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Provides that every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for. Requires an employer that permits patrons to pay gratuities by credit card to pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. Provides that payment of gratuities made by patrons using credit cards shall be made to the employees not later than the next regular payday following the date the patron authorized the credit card payment. (LAB § 351)
16. Requires, at the time of hiring, an employer to provide each employee a written notice, in the language the employer normally uses to communicate employment-related information to the employee, containing information about the rate or rates of pay. (LAB § 2810.5)
17. Requires employers in California to post information related to wages, hours and working conditions in an area frequented by employees where the information may be easily read during the workday. Requires health and safety information posting in certain workplaces.

This bill:

1. Requires the Labor Commissioner, on or before June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of BBC licensed establishments. Requires the model posting notice to contain clear and concise language and to be accessible on the Labor Commissioner's website so that it is reasonably accessible to BBC licensed establishments. Authorizes the Labor Commissioner to consult with BBC in providing the model posting notice in additional languages other than English.
2. Requires the model posting notice to include, but not be limited to, the following:
3. Misclassification of an employee as an independent contractor;
4. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods;
5. Tip or gratuity distribution;
6. How to report violations of the law;
7. Business expense reimbursement and;
8. Protection from retaliation.
9. Requires a BBC licensed establishment, on and after July 1, 2017, to post the model notice developed by the Labor Commissioner in a conspicuous location in clear view of employees and where similar notices are customarily posted.
10. Requires BBC to inspect for compliance with this posting requirement when it conducts inspections. Clarifies that a violation of the notice requirement is punishable by an administrative fine rather than a misdemeanor.

FISCAL EFFECT: This bill is keyed “fiscal” by Legislative Counsel. According to the Assembly Committee on Appropriations analysis dated May 11, 2016, the bill will result in minor and absorbable costs to DLSE and minor and absorbable costs to BBC.

COMMENTS:

1. Purpose. Asian Americans Advancing Justice and Community Health for Asian Americans are the sponsors of this bill. According to the Author, “workers in nail salons, i.e., ‘nail salon technicians’ have complained about being misclassified as ‘independent contractors’ when they are clearly employees of a salon and others complain about being denied rest or meal periods. Worse, there is an inherent fear of retaliation if a worker reports any violation of labor laws.”
2. BBC Establishment Inspections. BBC is responsible for licensing and regulating barbers, cosmetologists, estheticians, electrologists, manicurists, apprentices, and establishments. The BBC licenses and regulates over 550,000 licensees, including over 52,000 establishments. To ensure compliance with the BBC's health and safety and licensing regulations, random and targeted inspections of establishments are conducted. BBC does not consider labor standards or labor practices during its inspections.

BBC reported the following inspection and citation/fine information to this Committee during the sunset review oversight of BBC in 2014-15. According to BBC, the most common violations that result in a citation are related to health and safety.

1. Concerns About Nail Salons and Experiences of Nail Salon Employees. Nail salons have been the focus of studies and media reports in recent years stemming from health, safety and labor concerns in these settings. In May 2015, the New York Times (NYT) published two articles stemming from interviews with more than 150 nail salon workers and owners that found that a cast majority of workers are paid below minimum wage and are sometimes not even paid. The articles found that workers “endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse.” The NYT also found that employers are rarely punished for labor and other violations and that in 2014, when the New York State Labor Department conducted its first nail salon sweep, investigators inspected 29 salons and found 116 wage violations. While only about a quarter of the more than 100 workers said they were paid an amount equivalent to that state’s minimum hourly wage, all but three said they had wages withheld in ways considered illegal, such as never getting overtime and many were unaware that working unpaid was against the law and their alarmingly low wages are also illegal.

A February 2016 follow up report in the NYT articles found that 40 percent of the salons inspected, as part of the Labor Department’s increased efforts to inspect following the original May articles, underpaid employees, including one worker at a Manhattan salon who was paid $30 a day for 10-hour shifts, a manicurist in Queens who was paid only $200 for a 50-hour workweek, manicurists at seven salons who were forced to work for no pay or had to pay salon owners a fee, ostensibly to learn the trade and several owners admitted to submitting fake payroll records in an effort to fool investigators. The article highlighted that employers are often unfamiliar with the intricacies of state labor laws.

On August 26, 2015, the Assembly Select Committee on Women in the Workplace, the Assembly Select Committee on Girls and Women of Color, and the Assembly Committees on Health, Business and Professions, and Labor held a joint informational hearing titled "Labor Practices, Health, and Safety in California Nail Salons." The purpose of the hearing was to obtain information, address concerns, and discuss policy recommendations regarding nail salon practices from state agencies, advocates, and industry.

The Author notes that nail salon owners have expressed that they are oftentimes unaware of labor laws and that perhaps training is in order. The measure would set forth requirements for all BBC establishments, including nail salons.

1. Wages and Tips. In 2008, the Ford Foundation sponsored a survey of 4,387 workers in low-wage industries in the three largest U.S. cities: Chicago, Los Angeles and New York City. The report of that survey, titled Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities, revealed that 26 percent of workers in the sample were paid less than the legally required minimum wage the prior work week, and 60 percent of these workers were underpaid by more than $1 per hour. In addition, 76 percent of the respondents who worked overtime in the previous week were not paid the legally required overtime rate by their employers.

The study also notes that minimum wage violation rates vary significantly by industry, and occupation. For example, some industries, such as apparel and textile manufacturing and personal and repair services have minimum wage violation rates that exceed 40 percent, while others, including restaurants, and retail and grocery stores, have rates of 20 to 25 percent. However, the study found that undocumented immigrant women were at the greatest risk of minimum wage violations. The study estimated that the workers in low-wage industries Chicago, Los Angeles, and New York City lose more than $56.4 million per week due to labor law violations.

A follow-up study by the UCLA Institute for Research and Labor and Employment was published in 2015, and that study utilized the data from the 2008 survey, but focused specifically on Los Angeles County. This study, titled Wage Theft and Workplace Violations in Los Angeles: The Failure of Employment and Labor Law for Low-Wage Workers focused on a survey results of 1,815 workers in Los Angeles County.

This study found similar results to the national survey: almost 30 percent of the workers sampled were paid less than the minimum wage in the prior work week, and 63.3 percent of these workers were underpaid by more than $1 per hour. Assuming a full-year work schedule, Los Angeles County survey respondents lost an average of $2,070.00 annually out of total earnings of $16,536.00. The study estimated that workers in low-wage industries in Los Angeles County lose more than $26.2 million per week as a result of employment and labor law violations.

Both of the studies make the same public policy recommendations to address these issues, which included strengthening government enforcement of existing employment and labor laws and stiffening the penalties.

The low rate of collections of wages has also been evaluated. According to a 2013 report published by the National Employment Law Project (NELP) and the UCLA Labor Center, only 17 percent of workers who prevailed in their wage claims before the DLSE and won a judgment were able to receive any payment between 2008 and 2011. Of those who did receive payment between 2008 and 2011, workers were able to collect 15 percent of what was owed. In short, the vast majority of wage theft victims received nothing, and those that received anything received little of what they were legally due.

Tips withheld by nail salon employers was highlighted in the New York Times series. According to the Internal Revenue Service, tips are discretionary (optional or extra) payments determined by a customer that employees receive from customers. Tips include cash tips received directly from customers, tips from customers who leave a tip through electronic settlement or payment (including a credit card, debit card, gift card, or any other electronic payment method), the value of any noncash tips, such as tickets, or other items of value and tip amounts received from other employees paid out through tip pools or tip splitting, or other formal or informal tip sharing arrangement. All cash and non-cash tips an employee receives are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer, unless the tips received by the employee during a single calendar month while working for the employer total less than $20. Cash tips include tips received from customers, charged tips (e.g., credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement.

According to the United States Department of Labor (USDL), tipped employees are those who customarily and regularly receive more than $30 per month in tips. Tips are the property of the employee. The employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool. Employers electing to use the tip credit provision must be able to show that tipped employees receive at least the minimum wage when direct (or cash) wages and the tip credit amount are combined. If an employee's tips combined with the employer's direct (or cash) wages of at least $2.13 per hour do not equal the minimum hourly wage of $7.25 per hour, the employer must make up the difference. USDL notes that a tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit and that the Fair Labor Standards Act (FLSA) prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.

1. Current Posting Requirements. Employers in the state of California are required to post information related to wages, hours and working conditions, health and safety in an area frequented by employees where the information may be easily read during the workday as well as health and safety information. Specifically:

• Personal services industry employers must post wage, hour and working conditions information contained in Wage Order #2 developed by the Industrial Welfare Commission.
• All employers must post information outlining California's minimum wage.
• All employers must post information about paid sick leave entitlement and usage.
• All employers must post information about regular paydays and the time and place of payment.
• All employers must post information about basic requirements and procedures for compliance with the state's job safety and health laws and regulations.
• All employers must post information listing emergency responders' phone numbers.
• All employers must post information advising employees of workers' compensation benefits for injuries caused by their work, including the name of the employer's current compensation insurance carrier or the fact that the employer is self-insured.
• All employers must post information about employee rights and responsibilities under state whistleblower laws.
• All employers must post information designating where smoking is prohibited/permitted in a place of employment.
• All employers must post information about prohibitions on discrimination and harassment in employment.
• All employers of 5 to 49 employees must post information about pregnancy disability leave.
• All employers with 50 or more employees must post information about family care and medical leave and pregnancy disability leave.
• All employers must post information advising employees of potential unemployment insurance, disability insurance and paid family leave insurance benefits.
• All employers must post information, not less than 10 days before every statewide election, of availability of time off to vote.
• All employers must post equal employment opportunity information obtained from the U.S. Equal Employment Opportunity Commission, including an Americans with Disabilities Act poster.
• All employers must post information about minimum wage pursuant to the FLSA.

1. Government Agency Efforts to Serve California's LEP Population and Challenges Faced by BBC. The 2010 U.S. Census found that more than
   6.5 million residents of California, one out of every five, speak English “less than very well.” Over 44 percent of Californians speak a language other than English at home.

Dymally-Alatorre ensures that all California residents, including those who are limited English proficient (LEP), have equal access to public services. Dymally-Alatorre requires every state and local agency to have a sufficient number of qualified bilingual staff and translated written materials so that the LEP population they serve are able to effectively access and communicate with government. Dymally-Alatorre became law in 1973 with the Legislative intent of ensuring people are not precluded from accessing public services because of language barriers. It requires agencies to provide the same information that is available in English in other languages if the agency services a "substantial number" of non-English speakers. To determine which languages must be included under the defined threshold, agencies are required to conduct surveys every other year to assess their contact with non-English speakers. Then, they must create or update implementation plans to ensure compliance and submit them to CalHR. BBC, as a state agency, is currently subject to requirements under Dymally-Alatorre.

Stakeholders have weighed in at BBC meetings and to the Legislature during the sunset review oversight of BBC highlighting concerns with the BBC inspection process, especially as it pertains to language barriers. BBC regulates a very diverse population, which includes many LEP individuals who cannot always understand English-language inspection forms or are met with communication problems during an inspection. BBC has not historically had a standardized protocol or systematic process for inspectors when they encounter potential language barriers, which has been a factor in complications during the inspection process as well as dissatisfactory outcomes for licensees.

During its last sunset review oversight in 2014-15, BBC noted that it made language access one of its priorities. To that end, BBC has translated all of its documents into Vietnamese, Spanish, and Korean, including complaint forms. In April 2014, the BBC reported that it established a separate link on its website for the Vietnamese-speaking community which includes 42 fact sheets that have been translated into Vietnamese. In June 2014, links were created for the Spanish-speaking community and the Korean-speaking community. The fact sheet topics range from “what to expect during an inspection” to “industry advisory notices.” In addition, the inspection report was translated into Vietnamese so that inspectors can provide a handout of the report that indicates the violations found so that the licensee has the option to read these violations in his or her first language.

BBC has held Town Hall meetings for Vietnamese-speaking licensees with the intention of providing licensees opportunities to learn about the most common violations found in establishments, the inspection process, and the citation appeal process. In August 2014, the BBC added an insert to all citations that states if the recipient of the citation needs assistance in understanding the citation, to call the Cite and Fine Unit and he or she will be connected with an interpreter. BBC reported that it is also working with the Department of Consumer Affairs to provide training to inspectors; inspectors have been trained in cultural diversity and procedures for handling hostile situations and in October 2014, they were slated to receive tactical verbal training. In its responses to sunset review, BBC indicated that effective May 1, 2015, BBC would issue all citations to all manicurists and establishments cited for manicuring violations in English and Vietnamese and would be developing a protocol for inspectors as means of assisting in the process of inspecting establishments with LEP licensees.

1. Booth Renters. A BBC licensee who performs beautification services may own his or her own business or work for someone else at their shop. Licensees may be directly employed by an establishment or may be an independent contractor. The industry designation for independent contractors in BBC licensed establishments is “booth renter”.

“Booth renters” are licensed professionals who may not own an establishment but rent space from an owner. A booth renter, or independent contractor, is a practitioner who qualifies as an independent contractor under California tax law and who is not under the control and direction of a licensed establishment. Booth renters or independent contractors pay their own worker’s compensation insurance and taxes, maintain their own business license, establish their own work schedules and have access to the establishment at any time. The booth renter is considered a separate business entity operating within the establishment.

1. Related Legislation This Year. AB 2025 (Gonzalez) updates the Barbering and Cosmetology Act (Act) to ensure that the Board of Barbering and Cosmetology (BBC) offers all written materials provided to licensees and applicants in English, Spanish and Vietnamese; that the BBC provides practitioner and establishment applicants with information about basic labor laws and; that the BBC includes basic labor law information in health and safety curriculum taught in BBC-approved schools. (Status: The bill is pending in the Senate.)

AB 2125 (Chiu) requires the California Department of Public Health (DPH) to develop and publish guidelines for local governments to implement local healthy nail salon recognition programs with specified criteria, including the use of less toxic nail polishes and polish removers and improved ventilation. Requires DPH to develop awareness campaigns and post specified information on its Internet Web site. Permits DPH to prioritize its outreach to counties with the greatest number of nail salons. (Status: The bill is pending in the Senate Committee on Environmental Quality.)

SB 1125 (Nguyen) requires BBC, for an establishment license, if the establishment will offer nail care services, to include a signed acknowledgement that an applicant understands their responsibility to comply with any applicable state labor laws and comply with the informational materials BBC selects or develops related to basic labor laws. (Status: The bill is pending in the Assembly Committee on Business and Professions.)

1. Prior Related Legislation. SB 549 (Correa) would have authorized BBC to collect gender, language and ethnicity data from new licensure applicants and renewal licenses and posted certain information on the BBC’s website. (Status: The bill was vetoed by Governor Schwarzenegger who wrote that “The stated intent of this bill is based on the belief that the collection of statistics on the gender, ethnicity, and language preference of the Board of Barbering and Cosmetology (Board) licensees will lead to improved working conditions. Since that connection is specious at best, I do not believe this is an area that requires micromanagement of the Board”.)

AB 2689 (Tran) of 2008 would have established the Vietnamese Nail Worker Information Act which would require manufacturers and certain other persons that sell or use professional use-only nail care products to prepare, translate and provide material safety data sheets in Vietnamese to purchasers of the products as well as licensed professional nail care employees upon request. (Status: The bill was held under submission in the Assembly Committee on Appropriations.)

AB 2449 (Correa, Chapter 316, Statutes of 2002) required BBC licensees to provide certain, specified information to BBC when they renew their license and required BBC to report back to the Legislature on the information they collect, including the provisions outlined in BPC § 7401 above related to booth renters.

SB 1134 (Karnette) of 1999 would have established certain contractual provisions to be entered into between establishment owners and independent contractors (booth renters) who were licensed by the then-Barbering and Cosmetology Program and would have required the Program to register all independent contractors and issue a certificate of registration to be displayed where they work. (Status: The bill was never heard in a policy committee of the Assembly.)

AB 1358 (Karnette) of 1993 would have specified that a booth renter in the cosmetology industry is an employee and not an independent contractor for purposes of unemployment insurance, state disability insurance, employment training and personal income tax purposes according to certain conditions. (Status: The bill was vetoed by Governor Wilson who indicated in his veto message that given the complexity in the possible arrangements between salon owners and cosmetologists, a case-by-case determination would seem to make more sense. These are small businesses that should have the right to determine what arrangements would make their business most economically feasible.)

1. Arguments in Support. Supporters believe that this bill will help workers licensed by BBC to know about and advocate for their rights in the workplace and help ensure that establishment owners comply with California labor law. Supporters note that due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law and state that this bill will provide critical information that will allow confused employers to assess and correct any employment practices that violate labor law.
2. Proposed Author’s Amendment. In response to concerns that materials provided by BBC to licensees may not always be accessible to the BBC’s LEP licensee population, the Author would like to ensure that the model notice is available in languages most frequently used by BBC licensees and stakeholders.

BBC determines the languages, other than English, that are most frequently used by licensees by tracking requests for interpretation services. Currently, BBC has identified Spanish, Vietnamese and Korean as the languages, other than English, most frequently used by licensees and stakeholders. BBC is in the process of translating all written materials into Spanish, Vietnamese and Korean. To clarify that the model notice proposed in this bill needs to be available in the languages used by BBC licensees, and to strengthen the Author’s goal of having the notice developed in easily understandable language, the Author has proposed the following amendments:

On page 4, in line 8, strike “contain clear and concise” and replace with “be developed using plain”

On page 4, in line 11, strike “The Labor” and strike lines 12-14 inclusive

One page 4, after line 24, insert “(c) The model notice shall be translated into Spanish, Vietnamese and Korean.”

98.10. (a) On or before June 1, 2017, the Labor Commissioner shall develop a model notice pertaining to workplace rights and wage and hour laws for employees of establishments licensed under Chapter 10 (commencing with Section 7301) of Division 3 of the Business and Professions Code. The model posting notice shall contain clear and concise be developed using plain language and be accessible on the Labor Commissioner's Internet Web site so that it is reasonably accessible to an establishment that must comply with Section 7353.4 of the Business and Professions Code. The Labor Commissioner may consult with the Board of Barbering and Cosmetology in providing the model posting notice in additional languages other than English.

(b) The model notice shall include information, including, but not limited to, all of the following:

(1) Misclassification of an employee as an independent contractor.

(2) Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods.

(3) Tip or gratuity distribution.

(4) How to report violations of the law.

(5) Business expense reimbursement.

(6) Protection from retaliation.

(c) The model notice shall be translated into Spanish, Vietnamese and Korean.

SUPPORT AND OPPOSITION:

Support:

Asian Americans Advancing Justice - California

California Healthy Nail Salon Collaborative

Community Health for Asian Americans

Opposition:

None on file as of June 14, 2016.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2437

Author:(Ting)

As Amended Ver:April 25, 2016

Majority vote

SUMMARY: Requires on and after July 1, 2017, an establishment licensed by the Board of Barbering and Cosmetology (BBC) to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Labor Commissioner (Commissioner), as specified, and requires the BBC to inspect for compliance of the posting requirement. Specifically, this bill:

1. Requires on and after July 1, 2017, an establishment licensed by the BBC to post a notice, developed by the Commissioner, in a manner that complies with specified requirements of the Labor Code in a conspicuous location in clear view of employees and where similar notices are customarily posted, and further requires the BBC to inspect for compliance, as specified.
2. States that a violation of the posting requirement is punishable by an administrative fine, and is not punishable as a misdemeanor, as specified.
3. Requires the Commissioner to develop a model notice pertaining to workplace rights and wage and hour laws for employees of licensed BBC establishments, on or January 1, 2017.
4. Requires the model posting notice to contain clear and concise language and be accessible on the Commissioner's Web site so that it is reasonably accessible to an establishment that must comply with the posting requirement, and authorizes the Commissioner to consult with the BBC in providing the model notice in additional languages other than English.
5. Requires the model notice to contain the following information:
   1. Misclassification of an employee as an independent contractor;
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods;
   3. Tip or gratuity distribution;
   4. How to report violations of the law;
   5. Business expense reimbursement; and,
   6. Protection from retaliation.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Minor and absorbable cost to the Division of Labor Standards Enforcement within the Department of Industrial Relations.
2. Minor and absorbable costs to the Board of Barbering and Cosmetology.

COMMENTS:

Purpose. This bill requires establishments licensed under the BBC to post a model notice, developed by the Commissioner, pertaining to workplace rights and wage and hour laws beginning July 1, 2017. This bill is sponsored by the Community Health for Asian Americans and Asian Americans Advancing Justice. According to the author,

"Due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law. There are approximately 8,000 nail salons operating in California with over 95,000 licensed nail salon technicians, the majority of whom are women of color. An estimated 80% of nail salon owners and employees throughout the state are Vietnamese immigrant women who often have limited English proficiency. Employees are commonly misclassified as independent contractors and frequently earn less than minimum wage while working long hours without overtime pay or regular meal or rest breaks. Additionally, due to misclassification, many nail salon employees and owners mistakenly believe they are not entitled to worker's compensation, unemployment, disability or social security benefits. If poor business practices continue to be passed on from generation to generation, failure to address this issue will perpetuate a cycle of misinformation and negligence.

"[This bill] supports the California nail salon industry by requiring business owners of a nail salon to post a model notice -- in the language its workers can understand -- regarding worker's rights surrounding wages, misclassification of an employee as an independent contractor, overtime, tip distribution, meal periods, rest breaks, protection from retaliation, and where to report violations of the law. This bill intends to educate business owners, employers, and employees about existing labor laws given that many nail salons appear to be in violation of these laws."

Background. The BBC is responsible for licensing and regulating barbers, cosmetologists, estheticians, electrologists, manicurists, apprentices and establishments. Establishment licensees do not need to hold a separate professional license. In order to obtain an establishment license, an individual must submit an application to the BBC and pay the appropriate fee. The application must contain information about the applicant, whether it is a person, firm, or corporation that will be operating the establishment, and specifically prohibits issuing an establishment license if the individual, or each officer, director, or partner has committed any acts or crimes, as specified, which are grounds for denial. The types of establishments that the BBC regulates, includes, but is not limited to, nail salons, barbers, and hair salons. Currently, the BBC licenses approximately 41,000 establishments.

The BBC is required to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to health and safety. While the BBC inspects establishments for compliance with applicable health and safety requirements, it does not have jurisdiction over the enforcement of labor laws. However, this bill will require the BBC to inspect for compliance with this posting requirement.

Currently, the BBC does not differentiate between the types of establishments it licenses. An establishment licensee may operate a business to conduct any of the professional services for which a license is required, further establishment owners (establishment licensees) do not need to hold a separate professional license in order to own and operate an establishment; however, Business and Professions Code (BPC) Section 7348 specifies that an establishment must at all times be in the charge of a licensed person.

BBC Enforcement. Existing law permits the BBC to take enforcement actions against an establishment for issues mainly pertaining to health and safety violations. Specifically related to nail salons, pursuant to BPC Section 7403.2 if an inspection of an establishment finds that health and safety laws related to manicure and pedicure equipment have been violated and a citation is issued, the BBC may without advance hearing temporarily suspend the license. In order to reinstate that license, the licensee would have to comply with numerous remediation requirements including an additional inspection and pay all citations and fines as specified. In addition, BPC 7403.5 permits the BBC to, upon written notice, immediately close an establishment which upon inspection, is found to have health and safety violations of such a sever nature as to pose immediate threat to public health and safety. BBC does not currently have jurisdiction over labor issues or those establishment employees that are not licensees of the BBC.

Joint Hearing on Labor Practices, Health, and Safety in California Nail Salons. Labor concerns for nail technicians were raised in a May 7, 2015, article from the New York Times, "The Price of Nice Nails," in which it was reported: "The New York Times interviewed more than 150 nail salon workers and owners, in four languages, and found that a vast majority of workers are paid below minimum wage; sometimes they are not even paid. Workers endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse. Employers are rarely punished for labor and other violations."

In August of 2015, the Assembly Select Committees on Women in the Workplace, and Girls and Women of Color held a joint hearing with the Assembly Committees on Health, Business and Professions, and Labor and Employment, which focused on both the health and safety of licensees regarding exposure to chemicals and other ingredients, and concerns about labor practices in nail salons. The purpose of that hearing was for state agencies, advocates, and industry to obtain and share information, address concerns, and discuss policy recommendations regarding nail salon practices. As noted in background information provided by those Committees, "The jurisdiction for labor law compliance lies with California's Department of Industrial Relations (DIR) and Division of Labor Standards Enforcement within DIR. Labor law violations which occur in nail salons may not be as unique as the health concerns for workers however outreach to workers and owners about product safety is an avenue to improve education about employee rights and the consequences of labor violations." This bill aims to help address labor issues by requiring training requiring licensed establishments to post a notice pertaining to workplace rights and wage and hour laws in clear view of employees. The model notice is required to provide specified information including, but not limited to, information about tip or gratuity distribution, misclassification of an employee as an independent contractor, and protection from retaliation, among others.

Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301 FN: 0002972

Date of Hearing: May 11, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2437

Author:(Ting) – As Amended Ver:April 25, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY: This bill establishes a workplace notice requirement for barbering and cosmetology establishments regarding workplace rights, as specified. Specifically, this bill:

1. Requires the Labor Commissioner, by June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of establishments licensed under the Board of Barbering and Cosmetology.
   
2. Requires the model notice to include, but not be limited to, information on the following:
   
   1. Misclassification of an employee as an independent contractor.
      
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods.
      
   3. Tip or gratuity distribution, how to report violations of the law, business expense reimbursement, and protection from retaliation.
      
3. Requires the model notice to contain clear and concise language and be accessible on the Labor Commissioner's website so that it is reasonably accessible.
   
4. Authorizes the Labor Commissioner to consult with the Board of Barbering and Cosmetology in providing the model notice in additional languages.
   
5. Beginning July 1, 2017, requires establishments licensed under the Board of Barbering and Cosmetology, upon availability of the model notice prepared by the Labor Commissioner, to post the model notice in a conspicuous location in clear view of employees, where similar notices are customarily posted.
   
6. Authorizes the Board of Barbering and Cosmetology to inspect establishments for compliance with the model notice posting requirement.

FISCAL EFFECT:

1. Minor and absorbable cost to the Division of Labor Standards Enforcement within the Department of Industrial Relations.
2. Minor and absorbable costs to the Board of Barbering and Cosmetology.

COMMENTS:

1. Purpose. According to the author, the purpose of this bill is to ensure that certain employers, particularly nail salon establishments and their workers understand existing labor laws. Although the primary focus of the bill is nail salons, the workplace posting requirement will apply to all establishments licensed by the Board of Barbering and Cosmetology.

Due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law. According to the author, this community’s unique but pervasive problems require innovative solutions.

1. Background. The Board of Barbering and Cosmetology is responsible for licensing and regulating barbers, cosmetologists, estheticians, electrologists, manicurists, apprentices and approximately 41,000 establishments, including nail salons, barbershops and hair salons. According to the author, there are approximately 8,000 nail salons operating in California with over 95,000 licensed nail salon workers, the majority of whom are women of color. An estimated 80% of nail salon workers and owners throughout the state are Vietnamese immigrant women who often have limited English proficiency. According to the California Healthy Nail Salon Collaborative, the annual income of many nail salon workers is less than $18,200. Nail salon workers frequently earn less than minimum wage while working long hours without overtime or regular meal or rest breaks. Additionally, many do not receive worker’s compensation, unemployment benefits, disability or social security.

In recent years, concern has been expressed that many nail salon workers are commonly misclassified as independent contractors instead of employees. As discussed in the August 26, 2015 informational hearing convened by the Assembly Select Committees on Women in the Workplace and Girls and Women of Color and the Assembly Committees on Business and Professions, Health and Labor and Employment, “Labor Practices Affecting Nail Technicians and the Health and Safety of Nail Salons in California”, workers and owners, alike, are often unaware of the difference in classification and other labor laws and rights to which workers are entitled. In September 2011, a class action lawsuit was filed on behalf of 125 nail salon workers against a nail salon chain in San Mateo County. The complaint alleged various labor violations including not paying overtime, taking an employee’s tips, not providing meal and rest breaks and prohibiting employees from speaking Vietnamese in the workplace. The case was settled and the chain made improvements and adjusted their employment practices.

Worker advocates contend that in many low-wage industries, employers who disregard the law face few consequences, if any. This includes nail salons that do not comply with wage and hour laws, such as paying their employees overtime and ensuring meal and rest breaks.

1. Related Legislation.
2. AB 2025 (Gonzalez), among other provisions, requires the Board of Barbering and Cosmetology (Board), as a condition of issuing an establishment license, to ensure that the applicant has knowledge of basic labor laws pertaining to the individuals who work in establishments.
3. AB 2125 (Chiu) requires the California Department of Public Health (CDPH) to publish guidelines and model ordinances to assist local jurisdictions to voluntarily adopt local "Healthy Nail Salon" recognition programs. This bill is pending on this Committee's Suspense File.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Roger Hernández, Chair

ABPCA Bill Id:AB 2437 (

Author:Ting) – As Proposed to be Amended Ver:April 20, 2016

SUBJECT: Barbering and cosmetology: workplace notice

SUMMARY: Establishes a workplace notice requirement for barbering and cosmetology establishments regarding workplace rights, as specified. Specifically, this bill:

1. Requires the Labor Commissioner, by June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of establishments licensed under the Board of Barbering and Cosmetology.
   
2. Specifies that the model notice shall include, but not be limited to, information on the following:
   
   1. Misclassification of an employee as an independent contractor.
      
   2. Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods.
      
   3. Tip or gratuity distribution.
      
   4. How to report violations of the law.
      
   5. Business expense reimbursement.
      
   6. Protection from retaliation.
      
3. Requires the model notice to contain clear and concise language and be accessible on the Labor Commissioner's website so that it is reasonably accessible.
   
4. Authorizes the Labor Commissioner to consult with the Board of Barbering and Cosmetology in providing the model notice in additional languages.
   
5. Beginning July 1, 2017, requires establishments licensed under the Board of Barbering and Cosmetology, upon availability of the model notice prepared by the Labor Commissioner, to post the model notice in a conspicuous location in clear view of employees, where similar notices are customarily posted.
   
6. Authorizes the Board of Barbering and Cosmetology to inspect establishments for compliance with the model notice posting requirement.

EXISTING LAW:

1. Provides for the licensure and regulation of barbers, cosmetologists, estheticians, manicurists, electrologists, and apprentices by the State Board of Barbering and Cosmetology. The act requires the licensure of any person, firm, or corporation operating an establishment engaged in a practice regulated by the board, as specified, and requires a licensed establishment to comply with various requirements.

1. Establishes the Division of Labor Standards Enforcement within the Department of Industrial Relations, and vests the division with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation.

FISCAL EFFECT: Unknown

COMMENTS: According to the author, the purpose of this bill is to ensure that certain employers, particularly nail salon establishments, and their workers understand existing labor laws. Although the primary focus of the bill is nail salons, the workplace posting requirement will apply to all establishments licensed by the Board of Barbering and Cosmetology.

According to the author, there are approximately 8,000 nail salons operating in California with over 95,000 licensed nail salon workers, the majority of whom are women of color. An estimated 80 percent of nail salon workers and owners throughout the state are Vietnamese immigrant women who often have limited English proficiency. According to the California Healthy Nail Salon Collaborative, the annual income of many nail salon workers is less than $18,200. Nail salon workers frequently earn less than minimum wage while working long hours without overtime or regular meal or rest breaks. Additionally, many do not receive worker’s compensation, unemployment benefits, disability or social security.

Due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law. According to the author, this community’s unique but pervasive problems require innovative solutions.

In recent years, concern has been expressed that many nail salon workers are commonly misclassified as independent contractors instead of employees. As discussed in the August 26, 2015 informational hearing convened by the Assembly Select Committees on Women in the Workplace and Girls and Women of Color and the Assembly Committees on Business and Professions, Health and Labor and Employment, “Labor Practices Affecting Nail Technicians and the Health and Safety of Nail Salons in California”, workers and owners, alike, are often unaware of the difference in classification and other labor laws and rights to which workers are entitled. In September 2011, a class action lawsuit was filed on behalf of 125 nail salon workers against a nail salon chain in San Mateo County. The complaint alleged various labor violations including not paying overtime, taking an employee’s tips, not providing meal and rest breaks and prohibiting employees from speaking Vietnamese in the workplace. The case was settled and the chain made improvements and adjusted their employment practices. However, this case illuminates the need for more education on labor laws as these violations are common across the nail salon industry.

Worker advocates contend that in many low-wage industries, employers who disregard the law face few consequences, if any. This includes nail salons that do not comply with wage and hour laws, such as paying their employees overtime and ensuring meal and rest breaks. By disregarding the law, these unscrupulous nail salons are able to lower prices. This conduct harms the employee, who is a victim of wage theft, and law-abiding employers which are unable to compete.

COMMITTEE STAFF COMMENT

The March 31, 2016 version of this bill required an establishment providing nail care services and licensed by the Board of Barbering and Cosmetology to register with the Division of Labor Standards Enforcement (DLSE) and receive specified training regarding workplace rights and wage and hour laws. The bill required DLSE to provide the training to establishments and their employees and authorized DLSE to contract with nonprofit vendors to perform that training, among other requirements.

However, the Assembly Committee on Business and Professions (which was scheduled to hear this bill before this committee) raised a number of concerns with the language contained in that version of the bill. That committee requested amendments that would instead establish a workplace notice requirement for establishments licensed by the Board of Barbering and Cosmetology. Due to time constraints, the author agreed that those amendments would be adopted in this committee. Therefore, should the bill pass this committee, it will be reported out with the amendments that are reflected in this analysis.

REGISTERED SUPPORT / OPPOSITION:

Support

Asian Americans Advancing Justice-California

Community Health for Asian Americans

Opposition

None on file.

Analysis Prepared by: Taylor Jackson/Ben Ebbink / L. & E. / (916) 319-2091

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Rudy Salas, Chair

ABPCA Bill Id:AB 2437

Author:(Ting) – As Amended Ver:March 31, 2016

NOTE: This bill is double referred, and if passed by this Committee, it will be referred to the Assembly Committee on Labor and Employment.

SUBJECT: Nail care establishments: training: wage violations.

SUMMARY: Prohibits the Board of Barbering and Cosmetology (BBC) from issuing a renewal licensed to an establishment that is operating in violation of specified Labor Code (LC) provisions; requires the BBC to verify with the Labor Commissioner about establishments operating in violation of specified LC violations, and prohibits the BBC from renewing a license of an establishment unless all employees have received specified training; requires the Labor Commissioner to notify the BBC if a licensed establishment is conducting business in violation of specified LC provisions; requires an establishment to register with the Division of Labor Standards and Enforcement (Division); requires the Division to establish and provide a training program to establishments and licensees pertaining to specified workplace rights and wage and hour laws; permits an authorized non-profit agency to provide that training; and, authorizes the Division to charge a fee to the establishments for the training.

EXISTING LAW:

1. Establishes the BBC which provides for the licensure and regulation of Barbers; Barber Apprentices; Cosmetology Apprentices; Cosmetologists; Electrologists; Estheticians; Manicurists; Establishments; and, Mobile Units, within the Department of Consumer Affairs (DCA) to administer and enforce the Barbering and Cosmetology Act (Act). (Business and Professions Code (BPC) Section 7301, et seq.)
2. Defines an "establishment" as any premises, building, or part of a building where any BBC-licensed activity is practiced. (BPC Section 7346(a))
   
3. Specifies that an establishment also includes any premises, building, or part of a building where natural hair styling is practiced for compensation. (BPC Section 7346(b))
4. Requires any person, firm, or corporation desiring to operate an establishment to make an application to the BBC, which must include whether the person, firm, or corporation is operating a new establishment or obtaining ownership of an existing establishment, as specified. (BPC Section 7347)
5. States that an applicant, whether an individual, or each officer, director, partner, if the applicant is not an individual, may not have committed acts or crimes which are grounds for denial of licensure in effect at the time the new application is submitted, as specified. (BPC Section 7374)
6. Prohibits operation of the establishment at any other location unless a license for the new location has been obtained, as specified. (BPC Section 7347)
7. Requires the BBC's EO and authorized representatives, as specified, to have access to, for the purpose of required inspections, any establishment or mobile unit during business hours or at any time in which barbering and cosmetology are being performed. (BPC Section 7313)
8. Requires, within 90 days after issuance of the establishment license, an inspection of the establishment for compliance with the applicable rules and regulations of the BBC. (BPC Section 7353 (a)(1))
9. Requires the BBC to maintain a program of random and targeted inspections of establishments, as specified, and prohibits the BBC from reducing the number of employees assigned to perform random inspections, targeted inspections, and investigations related to field operations below the level funded, as specified. (BPC Section 7353(b)(d))
10. Prohibits the practice of barbering, cosmetology, or electrolysis for compensation without a valid, unexpired provider license or in an establishment or mobile unit unless licensed by the BBC. (BPC Section 7317)
11. Permits the practice of barbering and cosmetology outside of a licensed establishment when necessary due to illness or other physical or mental incapacitation of the recipient of the service when performed by an individual licensed by the BBC. (BPC Section 7318)
12. States that if a final judgement against an employer arising from the employer's nonpayment of wages for work performed in this state remains unsatisfied after a period of 30 days after the time to appeal has expired and no appeal is pending, the employer may not continue to conduct business in this state, including conducting business using the labor of another business, contractor, or subcontractor instead of the labor of an employee, unless the employer has obtained a bond from a surety company admitted to do business in this state and has filed a copy of that bond with the Labor Commissioner. (Labor Code (LC) Section 238(a))
13. Requires the surety bond to be effective and maintained until satisfaction of all judgements for nonpayment of wages, as specified. (LC Section 238(a))

THIS BILL:

1. Prohibits the BBC from renewing an establishment license that provides nail care services if it conducting business in violation of specified provisions of the LC.
2. Requires the BBC, prior to renewing the license of an establishment that provides nail care services, to verify with the Labor Commissioner whether the establishment is conducting business in violation of specified provisions of the LC.
3. Permits an establishment that provides nail care services to demonstrate to the BBC that it is not conducting business in violation of specified provisions of the LC, by providing evidence to the BBC.
4. Prohibits the BBC from renewing an establishment license of an establishment that provides nail care services, if the establishment and its employees have not received specified training.
5. Requires the Labor Commissioner to notify the BBC if an establishment licensee is conducting business in violation of specified provisions of the LC.
6. Defines "nail care services" to mean the practice of cutting, trimming, polishing, coloring, tinting, cleansing, manicuring, or pedicuring the nails of a person or massage, cleansing, or beautifying from the elbow to the fingertips or the knee to the toes of a person.
7. Defines the following for purposes of this bill:
   1. "Division" to mean the Division of Labor Standards Enforcement;
   2. "Establishment" to mean a license issued by the BBC that provides nail care services;
   3. "License" to mean a licensed issued to an establishment to perform nail care services, as specified; and,
   4. "Nail care" to mean the practice of cutting, trimming, polishing, coloring, tinting, cleansing, manicuring, or pedicuring the nails of a person or massaging, cleansing, or beautifying from the elbow to the fingertips or the knee to the toes.
8. Requires an establishment to register with the Division and receive specified training once every license renewal period and requires for the establishment to also arrange for licensees employed at that establishment to receive required training from either the Division, or from a nonprofit vendor, as specified.
9. Requires, by June 1, 2017, the Division to provide training to an establishment and licensees employed at that establishment regarding laws pertaining to workplace rights and wage and hour laws, and requires the training to include, but not limited to the following:
   1. Misclassification of an employee as a contractor;
   2. Wage and hour laws, such as minimum wage, overtime compensation, meal periods, and rest breaks;
   3. Protection for retaliation;
   4. Business expense reimbursement;
   5. Tip or gratuity distribution; and,
   6. How to report violations of the law.
10. Specifies that to the extent possible, the training must be provided separately to an establishment and licensee.
11. Requires the training to be provided in a culturally competent and linguistically appropriate manner for the demographic groups that work in the nail care industry.
12. Authorizes the Division to contract with an approved nonprofit vendor to provide the required training.
13. Requires the Division to consider the following when approving a nonprofit vendor to provide the required training:
    1. The linguistic capabilities of the nonprofit vendor, who must have language capacity to conduct the training in the languages of the demographic groups that work in the nail care industry, including, but not limited to Vietnamese;
    2. The nonprofit vendor must have a demonstrated history of providing culturally competent services to the demographic groups that work in the nail care industry, including, but not limited to, the Vietnamese community;
    3. The nonprofit vendor must have familiarity with the laws to be discussed in the training; the vendor may obtain this legal experience through other services providers, such as a nonprofit legal services agency; and,
    4. Any other criteria deemed appropriate by the Division.
14. Authorizes the Division to charge a fee not to exceed the reasonable regulatory cost for providing the training or for contracting out with an approved nonprofit vendor to provide the required training.
15. Establishes the Nail Care Establishment Training Fund, and specifies that the fees are only to be used for the purposes of providing the training required.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill requires nail care establishments licensed under the BBC and their employee to receive training in workplace rights and wage and hour laws; and further prohibits the BBC from renewing an establishment license if the establishment is in violation of specified labor laws and has not complied with the training provisions. This bill is sponsored by the Community Health for Asian Americans and Asian Americans Advancing Justice. According to the author,

"Due to language and cultural barriers among nail salon owners and employees, there remains persistent confusion about workplace law. There are approximately 8,000 nail salons operating in California with over 95,000 licensed nail salon technicians, the majority of whom are women of color. An estimated 80% of nail salon owners and employees throughout the state are Vietnamese immigrant women who often have limited English proficiency. Employees are commonly misclassified as independent contractors and frequently earn less than minimum wage while working long hours without overtime pay or regular meal or rest breaks. Additionally, due to misclassification, many nail salon employees and owners mistakenly believe they are not entitled to worker’s compensation, unemployment, disability or social security benefits. If poor business practices continue to be passed on from generation to generation, failure to address this issue will perpetuate a cycle of misinformation and negligence.

[This bill] supports the California nail salon industry by requiring business owners of a nail salon to post a model notice -- in the language its workers can understand -- regarding worker’s rights surrounding wages, misclassification of an employee as an independent contractor, overtime, tip distribution, meal periods, rest breaks, protection from retaliation, and where to report violations of the law. This bill intends to educate business owners, employers, and employees about existing labor laws given that many nail salons appear to be in violation of these laws."

Background. The BBC is responsible for licensing and regulating barbers, cosmetologists, estheticians, electrologists, manicurists, apprentices and establishments. Establishment licensees do not need to hold a separate professional license. In order to obtain an establishment license, an individual must submit an application to the BBC and pay the appropriate fee. The application must contain information about the applicant, whether it is a person, firm, or corporation that will be operating the establishment, and specifically prohibits issuing an establishment license if the individual, or each officer, director, or partner has committed any acts or crimes, as specified, which are grounds for denial. The types of establishments that the BBC regulates, includes, but is not limited to, nail salons, barbers, and hair salons. Current licensing populations include approximately 90,000 manicurists; approximately 250,000 cosmetologists; and approximately 41,000 establishments.

An establishment license is only valid for the address listed on the license. If a licensed establishment owner moves to a new location, he or she is required to apply for a new establishment license. The BBC is required to maintain a program of random and targeted inspections of establishments to ensure compliance with applicable laws relating to health and safety. While the BBC inspects establishments for compliance with applicable health and safety requirements, it does not have jurisdiction over the enforcement of labor laws.

Currently, the BBC does not differentiate between the types of establishments it licenses. An establishment licensee may operate a business to conduct any of the professional services for which a license is required under the Act, further establishment owners (establishment licensees) do not need to hold a separate professional license in order to own and operate an establishment; however, BPC Section 7348 specifies that an establishment must at all times be in the charge of a licensed person. Fees for establishments are specified in BPC Section 7424. Currently, an initial establishment license is $50 and an establishment renewal license is $40. Establishment licenses are renewed biannually. This bill would specifically prohibit the BBC from renewing an establishment license if that establishment licensee is conducting business in violation of the LC Section 238. LC Section 238 states that if a final judgement arising from the nonpayment of wages for work performed which remains unsatisfied after a period of 30 days after the time an appeal has expired and no appeal is pending, the employer may not continue to conduct business in this state unless the employer has obtained a bond from a surety company, as specified, and filed a copy of that bond with the LC. The bond amount is determined by the amount of judgement. In order for a BBC to renew an establishment license, they would be required to verify with the Labor Commissioner whether that establishment is conducting business in violation of the LC.

Licensed establishments are permitted to provide a broad range of professional services and business models may vary. This bill would require any establishment that offers nail care services, in addition to any other service for which a professional licensed is required, to be subject to the training elements required by this bill. As currently drafted, this bill would apply to all establishments that offer nail services, including, but not limited to, days spas in hotel venues, nail care only salons, sole proprietor businesses, establishments offering both hair and nail care services, and homebased businesses, among others.

BBC Enforcement. Existing law permits the BBC to take enforcement actions against an establishment for issues mainly pertaining to health and safety violations. Specifically related to nail salons, pursuant to BPC Section 7403.2 if an inspection of an establishment finds that health and safety laws related to manicure and pedicure equipment have been violated and a citation is issued, the BBC may without advance hearing temporarily suspend the license. In order to reinstate that license, the licensee would have to comply with numerous remediation requirements including an additional inspection and pay all citations and fines as specified. In addition, BPC 7403.5 permits the BBC to, upon written notice, immediately close an establishment which upon inspection, is found to have health and safety violations of such a sever nature as to pose immediate threat to public health and safety. BBC does not currently have jurisdiction over labor issues or those establishment employees that are not licensees of the BBC.

Joint Hearing on Labor Practices, Health, and Safety in California Nail Salons. Labor concerns for nail technicians were raised in a May 7, 2015, article from the New York Times, “The Price of Nice Nails”, in which it was reported: "The New York Times interviewed more than 150 nail salon workers and owners, in four languages, and found that a vast majority of workers are paid below minimum wage; sometimes they are not even paid. Workers endure all manner of humiliation, including having their tips docked as punishment for minor transgressions, constant video monitoring by owners, even physical abuse. Employers are rarely punished for labor and other violations."

In August of 2015, the Assembly Select Committees on Women in the Workplace, and Girls and Women of Color held a joint hearing with the Assembly Committees on Health, Business and Professions, and Labor and Employment, which focused on both the health and safety of licensees regarding exposure to chemicals and other ingredients, and concerns about labor practices in nail salons. The purpose of that hearing was for state agencies, advocates, and industry to obtain and share information, address concerns, and discuss policy recommendations regarding nail salon practices. As noted in background information provided by those Committees, "The jurisdiction for labor law compliance lies with California’s Department of Industrial Relations (DIR) and Division of Labor Standards Enforcement within DIR. Labor law violations which occur in nail salons may not be as unique as the health concerns for workers however outreach to workers and owners about product safety is an avenue to improve education about employee rights and the consequences of labor violations." This bill aims to help address labor issues by requiring training for both establishment owners and its employees. In addition, this bill aims to prohibit establishments from operating their businesses if they are found to be in violation of specified provisions of the LC and requires both the Labor Commissioner and the BBC to verify compliance.

Labor Issues and Training Requirements. In order to be a licensed manicurists, an applicant must be at least 17 years of age, completed the 10^th grade or equivalent, and have satisfied either 400 hours of training at a BBC-approved school or an apprenticeship program, or practiced nail care for a period of time equivalent to the study and training of a qualified person who had completed a course in nail care. In addition, the applicant must take and pass both a practical and written examination. Applicants for a cosmetologist license are required to be at least 17 years of age, completed the 10^th grade or its equivalent, completed either 1,600 hours of training at a BBC-approved school or completed a 3,200 hour apprenticeship program and 220 hours related training, hold a barber license and complete a cosmetology crossover course, or completed a barbering course and has taken a cosmetology crossover course. In addition, an applicant is required to pass both a written and practical examination. The BBC determines, through regulation, the required curriculum, and depending on the license type, the educational requirements vary. Required curriculum for manicurists includes technical instruction and practical instruction in nail care along with required instruction in health and safety issues. Currently, curriculum for licensed manicurists and cosmetologists does not include information on basic labor laws, as required by this bill.

AB 2025 (Gonzalez) of the current legislative session requires, among other things, the BBC, as a condition of issuing an establishment license, to ensure that the applicant has knowledge of basic labor laws pertaining to the individuals who work in establishments. In addition, that bill adds a requirement for the BBC to require, as part of students' curriculum, education about labor laws that pertain to the types of licensees who may work in establishments. AB 2025 would be applicable to all students, regardless of the type of professional license they are seeking, while this bill would apply only to those establishments that offer nail care services. Essentially nail care establishment owners and those licensed employees would be required to obtain additional training developed by the Division.

Current Related Legislation. AB 2025 (Gonzalez) of the current legislative session, requires the BBC, as a condition of issuing an establishment license, to ensure that the applicant has knowledge of basic labor laws pertaining to the individuals who work in establishments, as specified; requires the BBC to consult with the DIR in developing and adding questions on the application for licensure; requires the BBC to consult with stakeholders and the DIR to create informational materials on basic labor laws; requires the BBC to translate all of its written materials in English, Spanish, and Vietnamese; and, beginning January 1, 2018, authorizes the BBC to collect voluntary demographic information of its applicants for licensure. STATUS: This bill is pending in the Assembly Committee on Appropriations.

AB 2125 (Chiu), of the current legislative session, requires the State Department of Public Health to, by January 1, 2018, publish guidelines and best practices for cities and counties to voluntarily implement local healthy nail salon recognition programs. STATUS: This bill is currently pending in the Assembly Committee on Appropriations.

SB 1044 (Nguyen), of the current legislative session, requires the BBC to determine by regulation when a fine is required to be assessed against both the holder of the establishment license and the individual licensee for the same violation, and requires BBC to determine by regulation when a fine shall be assessed to only the holder of the establishment license or to only an individual licensee for the same violation, and further authorizes the BBC to enter into a payment plan for citations with administrative fines exceeding $500, as specified. STATUS: This bill is currently pending in the Senate Committee on Business, Professions and Economic Development.

ARGUMENTS IN SUPPORT:

The Asian Americans Advancing Justice and the Community Health for Asian Americans write in support, "Asian Americans Advancing Justice-California (Advancing Justice-CA) and Community Health for Asian Americans are pleased to jointly sponsor Assembly Bill 2437 which ensures that nail salon owners and employees have access to robust and meaningful education regarding wage and hour laws through trainings provided by the Labor Commissioner’s office or an approved nonprofit organization with experience providing culturally sensitive, in-language training to the impacted communities."

ARGUMENTS IN OPPOSITION:

The Professional Beauty Federation of California writes in opposition,"…The added layer of regulatory oversight called for by [this bill] by the [DIR], as well as nonprofit training organizations which will be paid by salons via a new fee, could be the final straw that drives many salons underground. And unlicensed and unregulated beauty services are the single greatest threat to the professionalism of California’s beauty industry.

Beyond those general concerns, this legislation singles-out only nail salons. Yet the [BBC] doesn’t currently have the ability to identify nail salons as distinct from skin/hair establishments (they only promulgated one “establishment license” for all beauty related salons). In addition, it is our understanding that the BBC lacks the technical expertise to enforce the labor law provisions found in Section 1 of [this bill]."

POLICY AND IMPLEMENTATION ISSUES FOR CONSIDERATION:

1. As currently drafted, this bill is only applicable to nail care establishments; however, the BBC does not issue an establishment license based on the types of service each establishment offers. An establishment license would permit the establishment licensee to offer any of the professional services for which a license is required under BPC Sections 7301, et seq. For example, a licensed establishment may provide hair care (cosmetologist), skin care (esthetician), and nail care (manicurist) under one license. It is unclear if the author's intent is to make this bill applicable to all establishments that provide a broad range of services including nail care services or just to those establishments that only provide nail care.
   
2. This bill is applicable to licensed manicurists and those establishments that employ them. If a licensed cosmetologist provides nail care services, they would be folded into the training requirements established by this bill. Currently, the BBC licenses and regulates barbers, cosmetologists, estheticians, electrologists, and manicurists. It is unclear why only one segment of BBC's licensing population should be required to obtain additional training.
   
3. This bill prohibits the BBC from renewing an establishment license if that business does not comply with specified training pertaining to workplace rights and wage and hour laws. However, this bill does not specify the training requirements including the length of the training course (one hour or eight hours), whether training will be onsite or offsite, or the location of training providers.
   
4. This bill applies to establishments offering nail care services which may include those establishments owned by one individual with no other employees or independent contractors. Sole proprietors would be required to register with the Division, pay the fee and obtain the required training each renewal cycle.
5. This bill prohibits the BBC from renewing an establishment license if the establishment is operating in violation of specified provisions of the LC. The bill requires the BBC to request information from the Labor Commissioner regarding businesses in violation of LC Section 238, but also requires the Labor Commissioner to provide information to the BBC on businesses in violation of LC Section 238. This may be a duplicative process.
   
6. This bill authorizes an establishment owner to demonstrate to the BBC that it is not conducting business in violation of LC Section 238. Making a determination about whether or not a labor violation or violations has or has not occurred may be outside the BBC's current jurisdiction and authority, which focuses on health and safety. It may be more appropriate to allow those businesses to demonstrate to the Labor Commissioner that they are not operating in violation of specified provisions of the LC.
   
7. This bill prohibits the BBC from renewing an establishment license if the establishment and its employees have not received the training established by the Division. However, as currently drafted, this bill does not specify how often a training program will be offered in order for new employees or other employees to comply with the requirements of this bill.
   
8. This bill requires the Division's training to be developed for establishments and its employees to have taken the training by June 1, 2017. This would give the Division and those establishments very little time to comply with the provisions of this bill. It may be appropriate to provide six months for the Division to establish the training, and provide an additional six months for the establishments to comply.

In order to address the issues raised above, it is recommended that the author consider amending the bill to require the Labor Commissioner to develop a model notice pertaining to workplace rights and hour laws for employees of establishments licensed under the Board of Barbering and Cosmetology. The notice should include information on misclassification of an employee as an independent contractor; wage and hour laws; including, but not limited to, minimum wage; overtime compensation; meal periods; and rest periods; tip or gratuity distribution; how to report violations of the law; business expense reimbursement; and, protection from retaliation.

Licensed establishments under the Board of Barbering and Cosmetology must post the model notice and the Board of Barbering and Cosmetology must include compliance with the posting notification as part of its inspection process.

REGISTERED SUPPORT:

Asian Americans Advancing Justice (co-sponsor)

Community Health for Asian Americans (co-sponsor)

A Place of Her Own

Asian Immigrant Women Advocates

Asian Pacific Islander Legal Outreach

Asian Women Artists Association

Community Schools and Student Services

Filipino Migrant Center

National Employment Law Project

Nepali Association of Northern California

Santa Clara County Wage Theft Coalition

Street Level Health Project

The Spot Youth Center

REGISTERED OPPOSITION:

Professional Beauty Federation of California

Analysis Prepared by: Elissa Silva / B. & P. / (916) 319-3301