BILL ANALYSIS                                                                                                                                                                                                    

          |SENATE RULES COMMITTEE            |                        SB 896|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  SB 896
          Author:   Nguyen (R), et al.
          Amended:  4/25/16  
          Vote:     21 

           SENATE BUS, PROF. & ECON. DEV. COMMITTEE:  5-2, 4/18/16
           AYES:  Bates, Berryhill, Galgiani, Jackson, Mendoza
           NOES:  Hill, Block
           NO VOTE RECORDED:  Hernandez, Wieckowski


           SUBJECT:   Barbering and cosmetology:  nail care  
                     establishments:  credit and debit cards

          SOURCE:    Author

          DIGEST:  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.  

          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).


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          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  
             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   

          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  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  


          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  


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          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.  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.

          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.  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. 

          Credit Card Payments and Tips.  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, tipped  
          employees are those who customarily and regularly receive more  
          than $30 per month in tips.  Tips are the property of the  


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          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          SUPPORT:   (Verified  5/4/16)

          None received

          OPPOSITION:   (Verified  5/4/16)

          Professional Beauty Federation of California

          ARGUMENTS IN OPPOSITION: The Professional Beauty Federation of  
          California (PBFC) is opposed to this bill, noting support for  
          efforts to encourage tips to be given to licensees, but concerns  
          about the fees salon owners pay to credit companies for clients  
          to be able to use credit cards.  PBFC believes that the decision  
          about using credit cards or not should be left to the salon  

          Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
          5/4/16 14:57:56

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