BILL ANALYSIS Ó
SB 896
Page 1
Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 896
(Nguyen) - As Amended May 23, 2016
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|Policy |Business and Professions |Vote:|13 - 1 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires an establishment that offers 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 in accordance with existing labor laws regarding
gratuities.
FISCAL EFFECT:
Negligible state fiscal impact.
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COMMENTS:
1)Purpose. According to the author, "Currently, nail salons in
the state accept various forms of payment for services
provided and any tip left for the technician. Some salons
only accept cash. Most establishments allow clients to use a
debit or credit card for the cost of the service and to leave
their technician a tip. A small number of establishments
accept paying for a service with a credit or debit card, but
do not allow a tip to be charged. Requiring salons that allow
clients to use credit or debit cards to also leave a tip on a
credit card or debit card will not only be more convenient for
the client but it will also ensure that technicians are
appropriately compensated for their labor."
2)Background. The Board of Barbering and Cosmetology (BBC)
licenses and regulates over 550,000 licensees, including over
50,000 establishments including, but are not limited to, nail
salons, barbers, and hair salons. The BBC is required to
maintain a program of random and targeted inspections of
establishments to ensure compliance with applicable laws
relating to health and safety. The BBC currently licenses
over 126,000 manicurists, 310,000 cosmetologists (who can also
perform nail care services) and 50,000 establishments.
Under existing law, there is no requirement for licensed
establishments to accept a certain form of payment for
professional services. Establishment owners or individual
licensees may choose to accept any form of payment for
professional services including, but not limited, to
prohibiting checks, but accepting credit cards, or requiring
cash-only transactions. Businesses that accept card payments
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pay processing fees for purchase transactions. While the BBC
inspects establishments for compliance with applicable health
and safety requirements, it does not inspect businesses for
labor related issues, including how the payment for services
is made.
This bill would require nail care establishments which accept
a credit card or debit card as a form of payment, to also
allow tips to be added to the debit or credit card. This bill
does not require a nail care establishment to accept a credit
card or debit card as a form of payment, nor does it alter the
BBCs enforcement requirements. As currently drafted, this
bill would apply only to nail establishments.
3)Arguments in Support. This bill is authored sponsored. 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. The author further contends that with so many
establishments statewide, it would make sense to have a
uniform payment system.
4)Arguments in Opposition. The Professional Beauty Federation of
California writes in opposition, "While we support the intent
to encourage tips to be given to our wonderful licensees, we
cannot support the level of statutory micromanagement of salon
business operations called for under [this bill]. Salon
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owners pay on average 3% fees to credit card companies for the
benefit of allowing their clientele to use such payment
methods, and those charges apply to tips. While rare, some
salons choose to forgo having to pay that fee for tips (and
instead encourage cash tips), and we believe that should be
their prerogative."
Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081