BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 2897      Hearing Date:    June 29,  
          2016
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          |Author:    |Committee on Labor and Employment                    |
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          |Version:   |March 1, 2016                                        |
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          |Urgency:   |No                     |Fiscal:    |No               |
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          |Consultant:|Martha Gutierrez                                     |
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                                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







          AB 2897 (Committee on Labor and Employment)             Page 2  
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                 (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. 









          AB 2897 (Committee on Labor and Employment)             Page 3  
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            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  








          AB 2897 (Committee on Labor and Employment)             Page 4  
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            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. 
                                          
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