BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: SB 896 Hearing Date: April 18, 2016 ----------------------------------------------------------------- |Author: |Nguyen | |----------+------------------------------------------------------| |Version: |March 17, 2016 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Sarah Mason | |: | | ----------------------------------------------------------------- Subject: Barbering and cosmetology: nail care establishments: credit and debit cards SUMMARY: Requires an establishment offering nail care services that accepts a debit or credit card as payment for nail care services to also accept a debit or credit card for payment of a tip. Existing law: 1) Provides for the licensure regulation of the practice of barbering, cosmetology, and electrolysis under the Barbering and Cosmetology Act (Act) by the Board of Barbering and Cosmetology (BBC). 2) Establishes nail care as a specialty branch in the practice of cosmetology and defines nail care as the practice of cutting, trimming, polishing, coloring, tinting, cleansing, manicuring, or pedicuring the nails of any person or massaging or beautifying from the elbow to the fingertips or the knee to the toes of any person. (Business and Professions Code (BPC) § 7316 (c) (2)) 3) Provides for licensure of manicurists by BBC to practice nail care and requires applicants to be over the age of 17, complete 10th grade in public California school or equivalent, not subject to a denial and have either completed a course in nail care from a BBC approved school, or SB 896 (Nguyen) Page 2 of ? practiced nail care in another state for a period of time equivalent to the study and training of a BBC approved course or completed an apprenticeship program in nail care. (BPC § 7326) 4) Defines "establishment" as any premises, building or part of a building where any activity licensed under the Act is practiced and sets forth requirements for licensure as an establishment by BBC. (BPC §§ 7346-7352) 5) Requires an employer that permits patrons to pay gratuities by credit card to pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. (Labor Code (LAB) § 351) This bill: Requires an establishment offering nail care services that accepts a debit or credit card as payment for nail care services to also accept a debit or credit card for payment of a tip. FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative Counsel. COMMENTS: 1. Purpose. The Author is the Sponsor of this measure. According to the Author, with so many establishments state wide it makes sense to have them uniformly provide the same payment options for consumers. The Author notes that there are over 52,000 establishments and almost 600,000 total workers, including over 312,000 cosmetologists and approximately 129,000 nail technicians currently licensed by BBC. According to the Author, currently, nail salon establishments in the state accept various forms of payment for a consumer's service and tip. The Author notes that while some establishments accept paying for a service with a credit card, they may not allow a tip to be charged on the credit card, yet other establishments offer the service and tip to be paid with a credit card. According to the Author, with so SB 896 (Nguyen) Page 3 of ? many establishments throughout the state, it would be helpful for a consumer to be able to pay for their service and tip in one transaction when receiving nail care services like a manicure or pedicure. The Author notes that many people simply do not carry cash with them and most consumers have a credit or debit card that they use for all their transactions. The Author states that it is more convenient for the consumer to be able to use their card for both the service and tip, especially if they don't have cash with them. 2. Nail Care in California. Nail care is a specialty branch in the field of cosmetology. In California, a licensed cosmetologist can practice nail care and BBC also licenses manicurists as a separate license category. To become a licensed manicurist, an applicant must submit proof of completion to BBC of 400 training hours training covering all practices of a manicurist, according to the following: 300 hours of technical instruction and practical training in nail care - 60 hours of technical instruction in manicures and pedicures (water and oil manicures including hand and arm massage, complete pedicure including foot and ankle massage, application of artificial nails including liquid, gel, and powder brush-ons, nail tips, nail wraps and repairs, and nail analysis); 60 hours of practical operations in manicures and pedicures; and 180 hours of nails 100 hours of technical instruction and practical training in health and safety - 10 hours on laws and regulations including the Act and BBC Rules and Regulations; 25 hours on chemistry pertaining to the practices of a manicurist including the chemical composition and purpose of nail care preparations, health and safety/hazardous substances, including training in chemicals and health in establishments, material safety data sheets, protection from hazardous chemicals and preventing chemical injuries, health and safety laws and agencies, ergonomics, and communicable diseases, including HIV/AIDS and Hepatitis B; 20 hours on disinfection and sanitation procedures to protect the health and safety of the consumer as well as the technician which entail disinfecting instruments and SB 896 (Nguyen) Page 4 of ? equipment as specified with special attention given to pedicure foot spa and basin disinfection procedures and; 10 hours in bacteriology, anatomy and physiology BBC also recommends in its regulations that schools provide training in communication skills that includes professional ethics, salesmanship, decorum, record-keeping, client service record cards, and basic tax responsibilities related to independent contractors, booth renters, employees, and employers BBC currently licenses 126,872 manicurists, 310,041 cosmetologists (whom can also perform nail care services) and 52,785 establishments. BBC does not include information in its establishment license data to differentiate between an establishment offering nail care services specifically or those offering other personal beautification services. 1. Credit Card Payments and Tips. According to the United States Small Business Administration, credit and debit cards are popular, convenient, flexible, and have become increasingly important in business commerce. Card payments are evolving into the most common method of customer payment, as businesses can easily accept card payments and the convenience of using credit cards generally increases the likelihood of consumer purchases, which ultimately contributes to an increase in a business's average sale. Businesses that accept card payments pay processing fees for purchase transactions. According to the Internal Revenue Service, tips are discretionary (optional or extra) payments determined by a customer that employees receive from customers. Tips include cash tips received directly from customers, tips from customers who leave a tip through electronic settlement or payment (including a credit card, debit card, gift card, or any other electronic payment method), the value of any noncash tips, such as tickets, or other items of value, and tip amounts received from other employees paid out through tip pools or tip splitting, or other formal or informal tip sharing arrangement. According to the United States Department of Labor (USDL), tipped employees are those who customarily and regularly receive more than $30 per month in tips. Tips are the property of the employee. SB 896 (Nguyen) Page 5 of ? 2. BBC Is Not Able To Differentiate Between Establishment Types. This bill applies specifically to establishments that offer nail care services, however BBC does not currently classify licensed establishments based on the types of services they offer. BBC does not, for example, have the ability to determine the number of licensed establishments that offer nail care services, nor can BBC capture whether an establishment is solely offering nail care services, or offering those in combination with a variety of other beautification services. If the Author intends for nail salons to be the only type of BBC licensed establishment required to accept credit and debit card payment for tips, the Author may wish to require BBC to collect establishment data about type of services provided, to then ensure that the provisions of the bill apply to nail care services establishments. SUPPORT AND OPPOSITION: Support: None on file as of April 12, 2016. Opposition: None on file as of April 12, 2016. -- END --