BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 896          Hearing Date:    April 18,  
          2016
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          |Author:   |Nguyen                                                |
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          |Version:  |March 17, 2016                                        |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Sarah Mason                                           |
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          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  







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             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  








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             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  








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                  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.  








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          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.


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