BILL ANALYSIS Ó
AB 1387
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1387 (Hernandez) - As Amended: April 18, 2013
Policy Committee: Labor and
Employment Vote: 6-1
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill eliminates the January 1, 2014 sunset date on an
enforcement program regulating the employment practices of
employers in the carwash and car polishing industry.
Specifically, this bill:
1)Increases the amount of the bond from $15,000 to $150,000
carwash employers are required to have for the benefit of the
state to compensate employees for non-payment of wages.
2)Specifies existing statute governing the bond does not apply
to an employer covered by a valid collective bargaining
agreement, if the agreement expressly provides all of the
following:
a) Wages.
b) Hours of work.
c) Working conditions.
d) An expeditious process to resolve disputes concerning
non-payment of wages.
FISCAL EFFECT
No additional fiscal impact to the Department of Industrial
Relations (DIR) to repeal the sunset of the carwash enforcement
program. The 2012 Budget Act provided $197,000 in the Car Wash
Worker Fund (registration and fine revenue). By continuing the
enforcement program, the collection of the one-time $250 fee and
annual $50 fee will continue as well.
COMMENTS
AB 1387
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1)Purpose . AB 1688 (Goldberg), Chapter 825, Statutes of 2004,
established provisions to regulate the carwash and polishing
industry. Statute requires every person engaged in this
industry to register with the Labor Commissioner (LC).
According to DIR, 990 businesses are registered in the carwash
and polishing database.
According to the author, "California leads the nation in both
the number of car washes and number of employees employed by
car washes. By some estimates, there are more than 1600 car
washes in California and more than 22,000 employees employed
therein. In March 2008, the Los Angeles Times reported the
results of an investigation of the car wash industry finding
that many owners pay less than half of the required minimum
wage and that two-thirds of those inspected by the state since
2003 were out of compliance with one or more labor laws. Some
violations included underpaying workers, hiring minors,
operating without workers' compensation insurance and denying
workers their meal and rest breaks."
This bill eliminates the sunset date for statute that
regulates the carwash industry.
2)Existing law requires carwash employers to register with the
LC and requires the employer to pay a one-time $250 fee for
each branch location. This fee is meant to cover all costs
associated with administering regulation on the carwash
industry. Statute also requires the LC to assess an annual
$50 fee for each branch location.
Current law also requires carwash employers to obtain a bond
of at least $15,000 to compensate employees for non-payment of
wages. The employer is also required to file a copy of the
bond with the LC. This bill proposes to increase the bond
amount to $150,000 and exempts an employer from having a bond
if the employer is covered by a collective bargaining
agreement, as specified.
3)Carwash industry enforcement . According to DIR, in the 2012
calendar year, it issued 212 citations to the carwash
industry. It assessed $2.6 million in penalties to carwash
operators and determined $2.2 million in unpaid wages were
owed to carwash workers.
AB 1387
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4)Previous legislation .
a) AB 236 (Swanson), Chapter 223, Statutes of 2009,
extended the sunset date of the carwash regulation statute
from January 1, 2010 to January 1, 2014.
b) SB 1468 (Alarcon), Chapter 656, Statutes of 2006,
extended the sunset date of the carwash regulation statute
from January 1, 2007 to January 1, 2010 and required the LC
to report to the Legislature on the status of labor law
violations, as specified.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081