BILL ANALYSIS                                                                                                                                                                                                    



                                                                    SB 1044


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          Date of Hearing:  June 21, 2016


                   ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS


                                  Rudy Salas, Chair


                     SB 1044(Nguyen) - As Amended June 13, 2016


          SENATE VOTE:  38-0


          SUBJECT:  Barbering and cosmetology


          SUMMARY:  Requires the Board of Barbering and Cosmetology (BBC)  
          to determine through regulations when a fine can be assessed to  
          an establishment owner and a licensee for the same violation,  
          and authorizes the BBC to establish a payment plan for citations  
          that exceed $500.  


          EXISTING LAW:   


          1)Establishes the Barbering and Cosmetology Act (Act) and the  
            BBC to license, regulate, and discipline professional work in  
            hair, skin, nail care, and electrolysis; and, ensure the  
            protection of the public is paramount when other interests are  
            sought to be promoted.  (Business and Professions Code (BPC)  
            Section 7301, et seq.)


          2)Defines an "establishment" to mean any premises, building or  
            part of a building where any licensed activity is practiced.   
            (BPC Section 7346)








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          3)Requires the 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 Section  
            7553(b))


          4)Requires the BBC or its authorized representatives to inspect  
            establishments to reasonably determine compliance levels and  
            to identify market conditions that require targeted  
            inspections.  (BPC Section 7353(c))


          5)Establishes grounds for disciplinary action including failure  
            to comply with the provisions of the Act; failure to comply  
            with health and safety standards as established by the BBC;  
            and, failure to comply with the BBC's rules for  
            establishments, among other offenses, as specified.  (BPC  
            Section 7404)


          6)Authorizes the BBC to assess administrative fines and issue  
            citations, as specified, for violations of the Act.  (BPC  
            Section 7406)


          7)States that any licensee served with a citation may avoid  
            payment of the associated administrative fine by presentation  
            of written proof satisfactory to the BBC or its executive  
            officer that the violation has been corrected.  (BPC Section  
            7409)


          8)States that persons to whom a notice of violation or a  
            citation is issued or an administrative fine is assessed, may  
            appeal the citation to a disciplinary review committee by the  
            BBC, as specified.  (BPC Section 7410)










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          9)Requires the BBC to establish by regulation a schedule of  
            administrative fines for violations of the Act, and the  
            schedule must indicate for each type of violation, whether in  
            the BBC's discretion, the violation can be corrected.  (BPC  
            Section 7407)


          10)States that persons who fail to pay administrative fines that  
            were not contested or were contested but the appeal has been  
            adjudicated cannot be issued a license or allowed to renew any  
            licensees issue to them until all fines are paid in addition  
            to any application, renewal, or delinquency fees which are  
            required.  (BPC Section 7414)


          THIS BILL: 


          11)Requires the BBC to determine by regulation when a fine is  
            assessed to both the holder of the establishment license and  
            the individual licensee for the same violation.


          12)Requires the BBC to also determine by regulation when a fine  
            is assessed to only the holder of the establishment license or  
            to only an individual licensee for the same violation


          13)Requires the BBC to consider when establishing the  
            regulations the egregiousness of the violation of the health  
            and safety regulations and whether the violation is a repeated  
            violation by licensees within the same establishment.


          14)Authorizes the BBC to enter into a payment plan for citations  
            and administrative fines that exceed $500, and requires the  
            BBC to define by regulation the parameters of the payment plan  
            which must include, but is not limited to, the terms of the  
            plan and grounds for cancellation of the plan.  








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          15)Makes permissive, instead of requires, the BBC to deny a  
            license or a license renewal if fines are not paid, as  
            specified. 


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, this bill will result  
          in negligible state costs. 


          COMMENTS:  


          Purpose.  This bill requires the BBC to determine through  
          regulations when a fine should be assessed to both the  
          establishment owner and an individual licensee or assessed only  
          to the establishment owner or to only the individual licensee.   
          In addition, this bill would allow the BBC to accept a payment  
          plan for citations.  This bill is sponsored by the  Board of  
          Barbering and Cosmetology  .  According to the author, "[This  
          bill] will not take away the responsibility of the owner of the  
          establishment, but will allow the [BBC] to determine when the  
          fine shall be assessed to both the individual and the owner.   
          This allows the [BBC] to hold individual licensees to a higher  
          level of responsibility, by ensuring that the individual who has  
          attended school and passed the licensing examination is the  
          first line of consumer protection and therefore responsible for  
          upholding the health and safety laws of the [BBC].  [This bill]  
          would allow the [BBC] to work with individuals on a case by case  
          basis to try and set up a payment plan for any outstanding  
          fines."


          Background. Board of Barbering and Cosmetology.  The BBC is  
          responsible for licensing and regulating barbers,  
          cosmetologists, estheticians, electrologists, manicurists,  
          apprentices, and approximately 41,000 establishments.   








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          Establishment licensees do not need to hold a separate  
          professional license.  In order to obtain an establishment  
          license, an individual must submit an application to the BBC and  
          pay the appropriate fee.  The application must contain  
          information about the applicant, whether it is a person, firm,  
          or corporation that will be operating the establishment, and  
          specifically prohibits issuing an establishment license if the  
          individual, or each officer, director, or partner has committed  
          any acts or crimes, as specified, which are grounds for denial.   
          The BBC licenses and regulates over 550,000 licensees, including  
          over 40,000 establishments.  The types of establishments that  
          the BBC regulates, include, but are not limited to, nail salons,  
          barbers, and hair salons. 


          BBC Enforcement.  Existing law permits the BBC to take  
          enforcement actions against an establishment for issues mainly  
          pertaining to health and safety violations.  To maintain the  
          BBC's health and safety requirements, BPC Section 7353(b)  
          requires the BBC to maintain a program of targeted and random  
          inspections of establishments.  As part of the inspection  
          program, inspectors will 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 will review the material for  
          accuracy, issue a citation and enter the citation information  
          into BreEZe, Department of Consumer Affair's licensing and  
          enforcement system.  Citations with egregious health and safety  
          violations or unlicensed activity are forwarded to the  
          Enforcement Program for further investigation.  

          Establishment Owners and Booth Renters.  An individual who owns  
          a BBC licensed establishment is not required to hold a separate  
          barber or cosmetology license.  Establishments can be owned by a  
          corporation, firm or by an individual.  BPC Section 7348  
          requires an establishment to at all times be in the charge of a  
          BBC licensee.  However, the owner of an establishment is  
          responsible for the activities of all employees working in the  








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          establishment.  According to information provided by the BBC,  
          the owner of an establishment is responsible for the  
          establishment and will be issued a citation for violations that  
          exist in the establishment in addition to each individual in  
          violation.  Even if an establishment owner has booth renters  
          and/or independent contractors employed, the owner is  
          responsible for each licensee. 


          Licensees working in an establishment can be an independent  
          contractor or an employee of the establishment.  Independent  
          contractors are commonly referred to as "booth renters."  Booth  
          renters are considered separate business entities operating  
          within the establishment and are responsible for setting their  
          own hours of operation, paying their own required insurance, and  
          maintaining a separate business license.  


          Because an establishment owner is responsible for the conduct of  
          all employees (regardless of booth renter or employee status),  
          if a violation is found by an individual, a citation is issued  
          to both the individual and the establishment owner.  During the  
          BBC's last sunset review in March of 2015 the issue of booth  
          renters was raised.  It was noted that the barbering and  
          cosmetology industry has reported to the BBC potential issues of  
          accountability, in that establishment owners are being forced to  
          be held 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. It has been  
          reported that 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 who, in their eyes, are independent  
          contractors.  









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          In order to alleviate the duplicative citation issue, one  
          solution that has been discussed is the establishment of a booth  
          renters' license which could be seen as a mechanism to clarify  
          the responsibility of a booth renter and establishment owner.   
          However, as noted in the staff background paper during the BBC's  
          sunset review a potential concern with the new license is how  
          the BBC would administer the inspection process for booth  
          renters, given that each booth could possibly be regulated as a  
          separate entity.  Additionally, creating this new license could  
          be perceived as owners not wanting to maintain responsibility  
          for individuals operating at their place of business. 


          It is unclear why a responsible business owner would want to  
          ignore violations in their establishment and not require all  
          individuals working closely with them to obey the law,  
          especially because consumers will most likely link services to  
          the establishment as well as the licensee providing services.   
          By requiring the BBC to establish through regulation when a fine  
          should be assessed to an individual and an establishment owner  
          or to an establishment owner or an individual, this bill seeks  
          to address the issue of establishment owners being fined along  
          with booth renters for the same violation.  


          This bill will authorize the BBC to establish a payment plan for  
          citations with administrative fines that exceed $500.  In 2004,  
          the BBC was granted authority to increase the maximum amount of  
          a fine from $2,500 to $5,000.  In the BBC's 2014 Sunset Review  
          Report, it was reported that the health and safety infractions  
          most often cited are violations of rules regarding the  
          disinfection and storage of tools, implements, instruments, and  
          products. The top non-health and safety-related violation is not  
          properly displaying establishment or individual licenses as  
          required in Title 16 California Code of Regulations Section 965.  
           Currently, licensees are not able to renew a license unless  
          they have paid all fines as required by the BBC.  This bill will  
          revise the current prohibition for licensure renewal if fines  








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          are not paid, and provide the BBC with discretion in authorizing  
          a renewal for applicants who may not have all fines or citations  
          paid as a result of a payment plan as determined by the BBC.  


          ARGUMENTS IN SUPPORT: 


          The  Board of Barbering and Cosmetology  writes in support, "This  
          bill is a big step in establishing parameters in how the [BBC]  
          currently issues citations and fines and will also allow the  
          [BBC] to set up payment plans for high amount citations.  This  
          will ensure that the businesses in California can correct their  
          violations without being in jeopardy of losing their license due  
          to unpaid fines."


          The Professional Beauty Federation of California  writes in  
          support, "[this bill]?would respond to our concern of individual  
          licensees and salon owners paying twice for the same cited  
          violation.  When the individual stylist/technician is a booth  
          renter, they often are contractually obligated to identify the  
          salon owner for any fine they are asses as a result of a  
          violation the booth renter makes (meaning the booth renter ends  
          up paying double the fine.)"


          ARGUMENTS IN OPPOSITION:


          None on file. 


          REGISTERED SUPPORT:


          Board of Barbering and Cosmetology (sponsor)










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          Professional Beauty Federation of California 


          REGISTERED OPPOSITION:


          None on file. 


          Analysis Prepared by:Elissa Silva / B. & P. / (916) 319-3301