BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1044 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
SUMMARY: Directs BBC to clarify in regulations when both the owner and
individual licensee can be fined for the same violation and
authorizes BBC to establish a payment plan for citations that
exceed $500.
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) 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)
3) Requires BBC to maintain a program of random and targeted
inspections of establishments to ensure compliance with
applicable laws relating to the public health and safety and
the conduct and operation of establishments. (BPC § 7353)
4) Requires licensees to report to BBC upon renewal, including:
(BPC § 7401)
a) License status, defined as either practicing full time
SB 1044 (Nguyen) Page 2
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in the state, practicing full time in another state,
practicing part-time in the state, not working in the
industry, retired or other practice that BBC defines.
b) Identification as either an employee, independent
contractor, booth renter or salon owner.
c) For establishments, whether a booth renter is operating
in the establishment or whether an independent contractor
is operating in the establishment.
1) Establishes grounds for disciplinary action that include
failure to comply with the Act, failure to comply with health
and safety standards set forth by BBC, and failure to comply
with the BBC's rules for establishments and other offenses.
(BPC § 7404)
2) Authorizes BBC to assess administrative fines and issue
citations for violations of the Act. (BPC §§ 7406 and 7408)
3) For a licensee's first violation in any three year period,
allows a licensee served with a citation to avoid paying the
associated fine by presenting written proof the BBC
determines is satisfactory that the violation has been
corrected. (BPC § 7409)
4) Authorizes those issued a notice of violation or citation and
fine to appeal the citation to BBC's Disciplinary Review
Committee (DRC) within 30 days of receiving the citation.
Allows those appealing a citation or their representatives to
appear in person before the DRC. (BPC §7410)
5) Provides that persons who fail to pay administrative fines
that were not contested or were contested by the appeal and
have adjudicated shall not be issued a license or allowed to
renew any license until all fines and application fees are
paid.
(BPC § 7414)
6) Provides that the holder or holders of an establishment
license or a mobile unit license and the person in charge of
any such establishment or mobile unit are responsible for
implementing and maintaining the BBC health and safety rules
in such establishment or mobile unit individually and jointly
SB 1044 (Nguyen) Page 3
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with all persons in or employed by or working in or on the
premises of such establishment or mobile unit. Provides that
all licensed barbers, cosmetologists, estheticians,
manicurists, electrologists, instructors, or apprentices
shall be held individually responsible for implementation and
maintenance of BBC health and safety rules.
(Title 16, California Code of Regulations § 904)
This bill:
1) Requires BBC to determine by regulation when a fine shall be
assessed to both the holder of the establishment license and
the individual licensee for the same violation.
2) Requires BBC to determine by regulation when a fine shall be
assessed to only the holder of the establishment license or
to only an individual licensee for the same violation.
3) Requires BBC, in making the determinations above, to consider
the egregiousness of the violation of the health and safety
regulations and whether the violation is a repeated violating
by an individual licensee within the same establishment.
FISCAL
EFFECT: Unknown. This bill is keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. The Board of Barbering and Cosmetology is the
Sponsor of this bill. According to the Author, BBC is
required by regulation to hold establishment owners as well
as individual licensees accountable for all health and safety
violations found in an establishment. For example, if an
individual is found with a dirty hair tool, the individual
will receive a citation with a fine and the establishment
owner will also receive a citation and fine. BBC often hears
complaints from owners that they are receiving fines for
violations committed by an independent contractor or a booth
renter. Often, the rental contract between independent
contractors or booth renters and establishment owners have a
requirement that the individual pay any fines that the owner
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receives if the individual was the cause of the violation
which results in an individual licensee having to pay a
double fine.
The Author states that BBC also utilizes the citation and
fine as the main enforcement tool for licensees. The Board
has an established administrative fine schedule for all
violations found in an establishment. A maximum of $5,000 is
set in statute for each citation. There are many times that
citations can add up to the maximum amount. A license cannot
be renewed unless all fines have been paid. The Board will
work with individuals on a case by case basis to try to set
up a payment plan for any outstanding fines, however, the
Board does not have statutory authority to establish this
type of payment plan.
2. Background. BBC is responsible for licensing and regulating
barbers, cosmetologists, estheticians, electrologists,
manicurists, apprentices, and establishments. The BBC
licenses and regulates over 550,000 licensees, including over
52,000 establishments. To ensure compliance with the BBC's
health and safety and licensing regulations, random and
targeted inspections of establishments are conducted. The
inspectors provide the licensee with a copy of an inspection
report as a record of the inspection. The original
inspection report, the photographs taken during the
inspection, and any inspector comments are then forwarded to
the BBC's home office. The Cite and Fine Program reviews the
material for accuracy, issues a citation, and enters the
citation information into the BreEZe system.
Citations with egregious health and safety violations or
unlicensed activity are forwarded to the Enforcement Program
for further investigation.
BBC reported the following inspection and citation/fine
information to this Committee during the sunset review
oversight of BBC in 2014-15. According to BBC, the most
common violations that result in a citation are related to
health and safety.
--------------------------------------------------------------------------------------------------------
| | FY 2011-12 | | FY 2012-13 | FY 2013-14 |
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--------------------------------------------------------------------------------------------------------
|------------+----------+-+------------+-----------|
|Establishmen| 14,012 | | 11,580 | 11,979 |
| ts | | | | |
| Inspected | | | | |
|------------+----------+-+------------+-----------|
| Citations | 10,543 | | 8,977 |8,257 |
| Issued to | | | | |
|Establishmen| | | | |
| ts | | | | |
|------------+----------+-+------------+-----------|
| Citations | 7,683 | | 6,291 | 6,452 |
| Issued to | | | | |
|Individuals | | | | |
|------------+----------+-+------------+-----------|
| Total | 18,234 | | 15,268 | 14,709 |
| Citations | | | | |
| Issued | | | | |
|------------+----------+-+------------+-----------|
|Establishmen| 2,863 | | 2,051 |3,046 |
| ts with No | | | | |
| Violations | | | | |
| Cited | | | | |
--------------------------------------------------
Anyone issued a citation has the right to appeal any or all
of the violations cited. In 2007, the fine schedule was
updated to reflect a single fine amount for each violation
regardless of how many times the licensee had been cited for
the same violation. As a result of this, the BBC found that
it was modifying a large number of appealed fine amounts. In
2011, the BBC reviewed and revised the fine schedule again
and returned to a sliding fine scale. Fines are now assessed
according to how many times the licensee is cited for the
same violation within the last five years. As a result of
the most recent revisions to the fine schedule, the BBC
reports that it is seeing a reduction in the average dollar
amount appealed per citation and an increase in the average
citation amount. Between 2012 and 2014, the average fine per
citation before an appeal has decreased from $891 to $729,
and the average fine amount per citation after an appeal
decision by the DRC has increased from $372 to $565.
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A sampling of BBC's fines established in regulation, are
below:
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| |1st |2nd |3rd |Waivab|
| |Violati|Violati|Violati|le |
| |on |on |on | |
|------------------------------------+-------+-------+-------+------|
|Preventing access to an |250 |500 |750 |No |
|establishment for inspection | | | | |
|------------------------------------+-------+-------+-------+------|
|Operating an unlicensed |500 |1,000 |1,000 |No |
|establishment | | | | |
|------------------------------------+-------+-------+-------+------|
|Unlicensed individual |1,000 |1,000 |1,000 |No |
|------------------------------------+-------+-------+-------+------|
|No licensee in charge of |100 |150 |200 |No |
|establishment | | | | |
|------------------------------------+-------+-------+-------+------|
|Employing unlicensed persons |1,000 |1,000 |1,000 |No |
|------------------------------------+-------+-------+-------+------|
|Not posting consumer health and |50 |100 |150 |No |
|safety information or posting | | | | |
|information in the incorrect size | | | | |
|------------------------------------+-------+-------+-------+------|
|Improperly disinfecting of |100 |250 |500 |No |
|non-electrical instruments | | | | |
|------------------------------------+-------+-------+-------+------|
|Improperly storing and labeling |50 |100 |150 |No |
|liquids, creams, powders, and | | | | |
|cosmetics | | | | |
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In 2004, authority was provided to BBC to increase the
maximum amount of a fine from $2,500 to $5,000. Now, any
citations with fines totaling more than $5,000 are modified
so the fine total does not exceed $5,000.
3. Booth Renters. The owner(s) of a BBC licensed establishment
is responsible for his/her salon and will be issued a
citation for violations that exist in the salon as well as
for each individual in that salon found to be in violation of
the Act. A BBC licensee who performs beautification services
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may own his or her own business or work for someone else at
their shop. Licensees may be directly employed by an
establishment or may be an independent contractor. The
industry designation for independent contractors in BBC
licensed establishments is "booth renter".
"Booth renters" are licensed professionals who may not own an
establishment but rent space from an owner. A booth renter,
or independent contractor, is a practitioner who qualifies as
an independent contractor under California tax law and who is
not under the control and direction of a licensed
establishment. Booth renters or independent contractors pay
their own worker's compensation insurance and taxes, maintain
their own business license, establish their own work
schedules and have access to the establishment at any time.
The booth renter is considered a separate business entity
operating within the establishment.
BBC does not differentiate between independent contractors,
booth renters, or employees. The owner of the salon is still
considered responsible for the activities of all of the
people working in the salon. If a BBC inspector finds a
violation by an individual working at the shop, the inspector
will issue a citation to both the individual and the salon.
If the independent contractor, booth renter, or employee is
not present during the inspection and has violations at his
or her station, the owner of the salon will still be issued a
citation for these violations. In most instances, an
establishment owner has some type of contractual agreement
with a booth renter that acknowledges that in the event an
establishment is fined for a violation of the licensee, the
licensee is responsible for paying the owner's fine.
The barbering and cosmetology industry believes there are
issues of accountability in that establishment owners are
being forced to be accountable for the deficiencies and
subsequent violations of booth renters, and that it should be
the individual licensee, not the owner, who should have to
comply with regulations and deal with enforcement actions.
As reported during the prior sunset review of BBC,
establishment owners believe that they already have many laws
and regulations to comply with and that, if something is
cited at the station of a booth renter, the establishment
owner should not be forced to oversee that renter and
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potentially receive a citation and fine for that individual's
actions. Owners do not want to be held liable for the
actions of individuals whom in their eyes are independent
contractors.
For several years, the BBC has discussed establishing a
"booth renter's license" which would identify licensees who
are independent contractors, as opposed to those who are
employees of salon owners. The BBC specifies that the stated
purpose of a new license would be to clarify the
responsibility of the booth renter and that of the salon
owner, to alleviate confusion for inspectors in the field as
to who is responsible for violations, to clarify insurance
issues and to facilitate collections of potentially thousands
of dollars in tax revenue that is currently not collected.
However, this effort could potentially be perceived as owners
not wanting to maintain responsibility for individuals
operating at their place of business and it is unclear why a
responsible business owner would potentially want to ignore
violations in their establishment and not require all
individuals working closely with them to obey the law,
especially as consumers will most likely link services to the
establishment as well as the licensee providing services.
4. Prior Related Legislation. AB 2449 (Correa, Chapter 316,
Statutes of 2002) required BBC licensees to provide certain,
specified information to when they renew their license and
requires the Bureau to report back to the Legislature on the
information they collect pursuant to this measure, including
the provisions outlined in BPC § 7401 above related to booth
renters.
SB 1134 (Karnette) of 1999 would have established certain
contractual provisions to be entered into between
establishment owners and independent contractors (booth
renters) who were licensed by the then-Barbering and
Cosmetology Program and would have required the Program to
register all independent contractors and issue a certificate
of registration to be displayed where they work. ( Status:
The bill was never heard in a policy committee of the
Assembly.)
AB 1358 (Karnette) of 1993 would have specified that a booth
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renter in the cosmetology industry is an employee and not an
independent contractor for purposes of unemployment
insurance, state disability insurance, employment training
and personal income tax purposes according to certain
conditions. ( Status: The bill was vetoed by Governor Wilson
who indicated in his veto message that given the complexity
in the possible arrangements between salon owners and
cosmetologists, a case-by-case determination would seem to
make more sense. These are small businesses that should have
the right to determine what arrangements would make their
business most economically feasible.)
5. Proposed Author's Technical Amendment. The Author has
proposed a technical amendment to the bill at the request of
BBC.
On page 3, in line 3, strike "an individual licensee" and
replace with "licensees"
7407.1. The board shall determine by regulation when a fine
shall be assessed to both the holder of the establishment
license and the individual licensee for the same violation.
The board shall also determine by regulation when a fine
shall be assessed to only the holder of the establishment
license or to only an individual licensee for the same
violation. In making these determinations, the board shall
consider the egregiousness of the violation of the health and
safety regulations and whether the violation is a repeated
violation by an individual licensee licensees within the same
establishment.
SUPPORT AND OPPOSITION:
Support: None on file as of April 12, 2016.
Opposition: None on file as of April 12, 2016.
-- END --
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