BILL ANALYSIS Ó AB 2437 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2437 (Ting) - As Amended April 25, 2016 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|10 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Labor and Employment | |5 - 1 | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: 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, AB 2437 Page 2 information on the following: a) Misclassification of an employee as an independent contractor. b) Wage and hour laws, including, but not limited to, minimum wage, overtime compensation, meal periods, and rest periods. c) 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 AB 2437 Page 3 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. 2)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 AB 2437 Page 4 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. AB 2437 Page 5 3)Related Legislation. a) 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. b) 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