Existing law regulates the employment practices of car washes, including providing specific recordkeeping requirements that employers of car washers must implement with regard to car washer wages, hours, and working conditions, under the enforcement authority of the Division of Labor Standards and Enforcement. Existing law requires employers of car washers to register with the Labor Commissioner and pay a specified registration fee, or be subject to a specified civil fine. Existing law also requires employers of car washers to post a $150,000 bond for the benefit of the state to compensate employees damaged by the employers nonpayment of wages, except as specified. Existing law also provides that a successor to an employer that owed wages and penalties to the predecessors employees is liable for those wages and penalties under specified circumstances.

This bill would require a car wash employer to provide written notice to a successor employer regarding the above provisions prior to the sale or other transfer of the business.

Existing law regulates the employment practices of car washes, including providing specific recordkeeping requirements that employers of car washers must implement with regard to car washer wages, hours, and working conditions, under the enforcement authority of the Division of Labor Standards and Enforcement. Existing law requires employers of car washers to register with the Labor Commissioner and pay a specified registration fee, or be subject to a specified civil fine. Existing law also requires employers of car washers to post a $150,000 bond for the benefit of the state to compensate employees damaged by the employers nonpayment of wages, except as specified. Existing law also provides that a successor to an employer that owed wages and penalties to the predecessors employees is liable for those wages and penalties under specified circumstances.

This bill would require a car wash employer to provide written notice to a successor employer regarding the above provisions prior to the sale or other transfer of the business.

 THIRD READING  

Bill No: AB 2897

Author: Roger Hernández (D)

: in Senate

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-0, 6/29/16

AYES: Mendoza, Jackson, Leno, Mitchell

NO VOTE RECORDED: Stone

ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill requires a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business.

Senate Floor Amendments of 8/2/16 change the author of the bill from Assembly Labor and Employment Committee to Assembly Member Roger Hernández.

ANALYSIS:

Existing law:

1. Requires every employer to register annually with the Labor Commissioner and lists the following conditions for registration or renewal:

• The employer must present proof of compliance with the local government’s business licensing or regional regulatory requirements to the Labor Commissioner.
• The employer has obtained a surety bond with a principal sum no less than $150,000 and file a copy of the bond with the Labor Commissioner. The bond shall be payable to the people of California for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages, or fringe benefits.
• The employer has documented that a worker’s compensation insurance policy is in effect and has paid necessary fees.

(Labor Code §§2054 and 2055)

1. Regulates the car washing and polishing industry by requiring specific recordkeeping requirements of car wash employers on employee wages, hours and working conditions. (Labor Code §2052)
2. Establishes a car wash worker fund for which penalties and registration fees are deposited for disbursement by the Labor Commissioner to employees of car washing or polishing businesses found to be in violation of existing law. (Labor Code §2065)
3. States that charitable groups, rental car agencies, self-service or automated car wash that have no more than two full-time employees for cashiering and/or maintenance purposes, and licensed vehicle dealers or automotive repair businesses are exempted. (Labor Code §2051)
4. Provides that a successor to an employer that owed wages and penalties to the predecessor’s employees is liable for those wages and penalties under specified circumstances. (Labor Code §2066)

This bill requires a car wash employer to provide written notice to a successor employer regarding the above provisions, such as owed wages and penalties, prior to the sale or other transfer of the business.

Comments

Need for this bill? Existing law regulates the employment practices of car washes and requires employers of car wash employees to register with the Labor Commissioner and pay a specified registration fee or be subject to a specified civil fine. Existing law also states that a successor car wash employer may be liable for unpaid wages and penalties incurred by a predecessor car wash employer if certain conditions are met.

This bill requires a car wash employer to notify a successor in writing of the requirement of the car wash registration law. According to the author, this bill provides important information about the law’s requirements to a prospective purchaser and ensures greater compliance.

Prior Legislation

AB 2750 (Hernandez, 2013) would have required a car wash employer to provide written notice to a successor employers regarding the requirements of existing law prior to the sale or other transfer to the business. The bill was amended out of Labor Code and into Business and Professions Code.

AB 1387 (Hernandez, Chapter 751, Statutes of 2013) eliminated the sunset date on existing law regulating the car washing and polishing industry. Also, AB 1387 increased the surety bond from $15,000 to $150,000 and provided a specified exemption for employers with a valid collective bargaining agreement.

AB 236 (Swanson, Chapter 224, Statutes of 2009) extended the sunset date of the licensing and registration program for car washes from January 1, 2010 to 2014.

SB 1468 (Alarcon, Chapter 656, Statutes of 2006) extended the sunset date of the licensing and registration program to January 1, 2010 and required the Labor Commissioner to report on the status of labor law violations and enforcement in the car washing and polishing industry.

AB 1688 (Goldberg, Chapter 825, Statutes of 2003) enacted regulations for the car wash industry including registration and bonding requirements, as well as protections against “successor” entities avoiding previous judgments for unpaid wages or penalties.

SB 1097 (Hayden, 1999) would have required persons who employ others in car washing and polishing to register with the Labor Commissioner and would have required an employer who has violated specified labor laws to obtain a surety bond and meet other specified requirements. SB 1097 was vetoed by Governor Davis.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/3/16)

None received

OPPOSITION: (Verified 8/3/16)

None received

ARGUMENTS IN SUPPORT: According to the author’s office, this bill requires a car wash employer to notify a successor in writing of the requirement of the car wash registration law, including the potential for successor liability for unpaid wages, prior to the sale or other transfer of the business. Further, the author’s office argues that requiring a person selling their car wash business to inform a prospective purchaser about the requirements of the law will ensure greater awareness of and compliance with the law.

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by:

8/3/16 19:40:23

**** END ****

 THIRD READING  

Bill No: AB 2897

Author:

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-0, 6/29/16

AYES: Mendoza, Jackson, Leno, Mitchell

NO VOTE RECORDED: Stone

ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill requires a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business.

ANALYSIS:

Existing law:

1. Requires every employer to register annually with the Labor Commissioner and lists the following conditions for registration or renewal:

• The employer must present proof of compliance with the local government’s business licensing or regional regulatory requirements to the Labor Commissioner.
• The employer has obtained a surety bond with a principal sum no less than $150,000 and file a copy of the bond with the Labor Commissioner. The bond shall be payable to the people of California for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages, or fringe benefits.
• The employer has documented that a worker’s compensation insurance policy is in effect and has paid necessary fees.

(Labor Code §§2054 and 2055)

1. Regulates the car washing and polishing industry by requiring specific recordkeeping requirements of car wash employers on employee wages, hours and working conditions. (Labor Code §2052)
2. Establishes a car wash worker fund for which penalties and registration fees are deposited for disbursement by the Labor Commissioner to employees of car washing or polishing businesses found to be in violation of existing law. (Labor Code §2065)
3. States that charitable groups, rental car agencies, self-service or automated car wash that have no more than two full-time employees for cashiering and/or maintenance purposes, and licensed vehicle dealers or automotive repair businesses are exempted. (Labor Code §2051)
4. Provides that a successor to an employer that owed wages and penalties to the predecessor’s employees is liable for those wages and penalties under specified circumstances. (Labor Code §2066)

This bill requires a car wash employer to provide written notice to a successor employer regarding the above provisions, such as owed wages and penalties, prior to the sale or other transfer of the business.

Comments

Need for this bill? Existing law regulates the employment practices of car washes and requires employers of car wash employees to register with the Labor Commissioner and pay a specified registration fee or be subject to a specified civil fine. Existing law also states that a successor car wash employer may be liable for unpaid wages and penalties incurred by a predecessor car wash employer if certain conditions are met.

This bill requires a car wash employer to notify a successor in writing of the requirement of the car wash registration law. According to the author, this bill provides important information about the law’s requirements to a prospective purchaser and ensures greater compliance.

Prior Legislation

AB 2750 (Hernandez, 2013) would have required a car wash employer to provide written notice to a successor employers regarding the requirements of existing law prior to the sale or other transfer to the business. The bill was amended out of Labor Code and into Business and Professions Code.

AB 1387 (Hernandez, Chapter 751, Statutes of 2013) eliminated the sunset date on existing law regulating the car washing and polishing industry. Also, AB 1387 increased the surety bond from $15,000 to $150,000 and provided a specified exemption for employers with a valid collective bargaining agreement.

AB 236 (Swanson, Chapter 224, Statutes of 2009) extended the sunset date of the licensing and registration program for car washes from January 1, 2010 to 2014.

SB 1468 (Alarcon, Chapter 656, Statutes of 2006) extended the sunset date of the licensing and registration program to January 1, 2010 and required the Labor Commissioner to report on the status of labor law violations and enforcement in the car washing and polishing industry.

AB 1688 (Goldberg, Chapter 825, Statutes of 2003) enacted regulations for the car wash industry including registration and bonding requirements, as well as protections against “successor” entities avoiding previous judgments for unpaid wages or penalties.

SB 1097 (Hayden, 1999) would have required persons who employ others in car washing and polishing to register with the Labor Commissioner and would have required an employer who has violated specified labor laws to obtain a surety bond and meet other specified requirements. SB 1097 was vetoed by Governor Davis.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/6/16)

None received

OPPOSITION: (Verified 7/6/16)

None received

ARGUMENTS IN SUPPORT: According to the author’s office, this bill requires a car wash employer to notify a successor in writing of the requirement of the car wash registration law, including the potential for successor liability for unpaid wages, prior to the sale or other transfer of the business. Further, the author’s office argues that requiring a person selling their car wash business to inform a prospective purchaser about the requirements of the law will ensure greater awareness of and compliance with the law.

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by:

7/29/16 10:48:55

**** END ****

SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Tony Mendoza, Chair

2015 - 2016 Regular

Bill No: AB 2897 Hearing Date: June 29, 2016

Subject: Car washes

KEY ISSUE

Should the Legislature require a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business?

ANALYSIS

Existing law requires every employer to register annually with the Labor Commissioner and lists the following conditions for registration or renewal:

1. The employer must present proof of compliance with the local government’s business licensing or regional regulatory requirements to the Labor Commissioner
2. The employer has obtained a surety bond with a principal sum no less than $150,000 and file a copy of the bond with the Labor Commissioner. The bond shall be payable to the people of California for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages, or fringe benefits
3. The employer has documented that a worker’s compensation insurance policy is in effect and has paid necessary fees

(Labor Code §§2054 and 2055)

Existing law regulates the car washing and polishing industry by requiring specific recordkeeping requirements of car wash employers on employee wages, hours and working conditions. (Labor Code §2052)

Existing law establishes a car wash worker fund for which penalties and registration fees are deposited for disbursement by the Labor Commissioner to employees of car washing or polishing businesses found to be in violation of current law. (Labor Code §2065)

Existing law states that charitable groups, rental car agencies, self-service or automated car wash that have no more than two full-time employees for cashiering and/or maintenance purposes, and licensed vehicle dealers or automotive repair businesses are exempted. (Labor Code §2051)

Existing law also provides that a successor to an employer that owed wages and penalties to the predecessor’s employees is liable for those wages and penalties under specified circumstances. (Labor Code §2066)

This Bill would require a car wash employer to provide written notice to a successor employer regarding the above provisions, such as owed wages and penalties, prior to the sale or other transfer of the business.

COMMENTS

1. Need for this bill?

Existing law regulates the employment practices of car washes and requires employers of car wash employees to register with the Labor Commissioner and pay a specified registration fee or be subject to a specified civil fine. Existing law also states that a successor car wash employer may be liable for unpaid wages and penalties incurred by a predecessor car wash employer if certain conditions are met.

This bill would require a car wash employer to notify a successor in writing of the requirement of the car wash registration law. According to the author this bill would provide important information about the law’s requirements to a prospective purchaser and would ensure greater compliance.

2. Proponent Arguments:

According to the author’s office, this bill would require a car wash employer to notify a successor in writing of the requirement of the car wash registration law, including the potential for successor liability for unpaid wages, prior to the sale or other transfer of the business. Further, the author’s office argues that requiring a person selling their car wash business to inform a prospective purchaser about the requirements of the law will ensure greater awareness of and compliance with the law.

3. Opponent Arguments:

None on file.

4. Prior Legislation:

AB 2750 (Hernandez) of 2013 – would have required a car wash employer to provide written notice to a successor employers regarding the requirements of existing law prior to the sale or other transfer to the business. The bill was amended out of Labor Code and into Business and Professions Code.

AB 1387 (Hernandez), Chapter 751, Statues of 2013 – eliminated the sunset date on existing law regulating the car washing and polishing industry. Also, AB 1387 increased the surety bond from $15,000 to $150,000 and provided a specified exemption for employers with a valid collective bargaining agreement.

AB 236 (Swanson), Chapter 224, Statutes of 2009 – extended the sunset date of the licensing and registration program for car washes from January 1, 2010 to 2014.

SB 1468 (Alarcon), Chapter 656, Statutes of 2006 – extended the sunset date of the licensing and registration program to January 1, 2010 and required the Labor Commissioner to report on the status of labor law violations and enforcement in the car washing and polishing industry.

AB 1688 (Goldberg), Chapter 825, Statutes of 2003 – enacted regulations for the car wash industry including registration and bonding requirements, as well as protections against ‘successor’ entities avoiding previous judgments for unpaid wages or penalties.

SB 1097 (Hayden) of 1999 – would have required persons who employ others in car washing and polishing to register with the Labor Commissioner and would have required an employer who has violated specified labor laws to obtain a surety bond and meet other specified requirements. SB 1097 was vetoed by Governor Davis.

SUPPORT

None on file.

OPPOSITION

None on file.

-- END --

Date of Hearing: May 4, 2016

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Roger Hernández, Chair

ABPCA Bill Id:AB 2897 (

Author:Committee on Labor and Employment) – As Introduced Ver:March 1, 2016

SUBJECT: Car washes

SUMMARY: Requires a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business.

EXISTING LAW:

1. Regulates the employment practices of car washes, including providing specific recordkeeping requirements that employers of car wash workers must implement with regard to wages, hours and working conditions.
   
2. Requires employers of car wash workers to register with the Labor Commissioner and pay a specified registration fee, or be subjected to a specified civil fine.
   
3. Provides that a successor to any car wash employer that owed wages and penalties to the predecessor's former employees is liable for those wages and penalties if certain criteria are met.

FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS: Existing law regulates the employment practices of car washes and requires employers of car wash employees to register with the Labor Commissioner and pay a specified registration fee, or be subject to a specified civil fine.

Existing law also provides that a successor car wash employer may be liable for unpaid wages and penalties incurred by a predecessor car wash employer if certain conditions are met.

This bill would require a car wash employer to notify a successor in writing of the requirement of the car wash registration law, including the potential for successor liability for unpaid wages, prior to the sale or other transfer of the business.

According to the author, requiring a person selling their car wash business to inform a prospective purchaser about the requirements of the law will ensure greater awareness of and compliance with the law.

Prior Legislation

This bill is identical to AB 1505 (Committee on Labor and Employment) from last year. That measure was subsequently amended to deal with an unrelated issue.

This bill is also identical to AB 2750 (Roger Hernández) from 2014. That measure was subsequently amended to deal with an unrelated matter.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

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