BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 896| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- VETO Bill No: SB 896 Author: Nguyen (R), et al. Amended: 6/30/16 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 SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SENATE FLOOR: 27-4, 5/26/16 AYES: Anderson, Bates, Beall, Berryhill, Cannella, Fuller, Gaines, Galgiani, Hall, Hancock, Hertzberg, Hueso, Jackson, Lara, Liu, McGuire, Mendoza, Mitchell, Moorlach, Morrell, Nguyen, Nielsen, Pan, Roth, Stone, Vidak, Wolk NOES: Glazer, Hill, Leno, Leyva NO VOTE RECORDED: Allen, Block, De León, Hernandez, Huff, Monning, Pavley, Runner, Wieckowski SENATE FLOOR: 29-5, 8/11/16 AYES: Anderson, Bates, Beall, Berryhill, Cannella, Fuller, Gaines, Galgiani, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Liu, McGuire, Mendoza, Mitchell, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk NOES: Allen, Glazer, Leno, Leyva, Monning NO VOTE RECORDED: Block, De León, Hall, Hancock, Hernandez ASSEMBLY FLOOR: 61-2, 8/4/16 - See last page for vote SUBJECT: Barbering and cosmetology: nail care establishments: credit and debit cards SB 896 Page 2 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 in accordance with labor laws. Assembly Amendments add coauthors and make technical changes. ANALYSIS: 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 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 SB 896 Page 3 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 tip and specifies that acceptance of a tip by debit or credit card must be done in accordance with existing labor laws. Background 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. 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 SB 896 Page 4 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 employee. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Assembly Appropriations Committee, this bill will have negligible state fiscal impact. SUPPORT: (Verified8/4/16) None received OPPOSITION: (Verified8/4/16) SB 896 Page 5 Board of Barbering and Cosmetology Professional Beauty Federation of California ARGUMENTS IN SUPPORT: --- 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 owner. GOVERNOR'S VETO MESSAGE: I am returning Senate Bill 896 without my signature. This bill requires a nail salon that accepts credit cards for nail care to also accept a credit card for the payment of tips. I understand the author's intent to encourage the giving of tips to nail salon workers, but I don't believe that government should mandate the use of credit cards as required by this bill. In matters like this, the competitive marketplace should be sufficient. I would also note that this bill lacks any enforcement mechanism. ASSEMBLY FLOOR: 61-2, 8/4/16 AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, SB 896 Page 6 Chau, Chiu, Chu, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Eduardo Garcia, Gipson, Gomez, Gonzalez, Gordon, Grove, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NOES: Gatto, Gray NO VOTE RECORDED: Travis Allen, Bigelow, Chávez, Cooley, Dahle, Beth Gaines, Gallagher, Cristina Garcia, Hadley, Harper, Roger Hernández, Linder, Melendez, Obernolte, Olsen, Patterson, Steinorth Prepared by: Sarah Mason / B., P. & E.D. / (916) 651-4104 8/30/16 15:46:09 **** END ****