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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