BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1044| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1044 Author: Nguyen (R), et al. Amended: 4/20/16 Vote: 21 SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/18/16 AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Barbering and cosmetology SOURCE: Board of Barbering Cosmetology DIGEST: This bill directs the Board of Barbering and Cosmetology (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. 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 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 SB 1044 Page 2 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)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) 5)Authorizes BBC to assess administrative fines and issue citations for violations of the Act. (BPC §§ 7406 and 7408) 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 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. SB 1044 Page 3 Background 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 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 BBC 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 BBC will work with individuals on a case by case basis to try to set up a payment plan for any outstanding fines, however, the BBC does not have statutory authority to establish this type of payment plan. BBC Enforcement. 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. Citations with egregious health and safety violations or unlicensed activity are forwarded to the Enforcement Program for further investigation. According to BBC, the most common violations that result in a citation are related to health and safety. Anyone issued a citation has the right to appeal any or all of the violations cited. In 2007, the fine schedule was updated to SB 1044 Page 4 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. 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 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 SB 1044 Page 5 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 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. SB 1044 Page 6 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified5/11/16) Board of Barbering and Cosmetology (source) Professional Beauty Federation of California OPPOSITION: (Verified5/11/16) None received ARGUMENTS IN SUPPORT: The Professional Beauty Federation of California believe that this bill responds to the industry's concerns of individual licensees and salon owners paying twice for the same cited violation. Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104 5/11/16 15:12:48 **** END ****