BILL ANALYSIS                                                                                                                                                                                                    Ó




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                                UNFINISHED BUSINESS 


          Bill No:  SB 1044
          Author:   Nguyen (R), et al.
          Amended:  6/13/16  
          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

           SENATE FLOOR:  38-0, 5/12/16
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,  
            Vidak, Wieckowski, Wolk
           NO VOTE RECORDED:  Liu, Runner

           ASSEMBLY FLOOR:  77-0, 8/4/16 (Consent) - See last page for  
            vote

           SUBJECT:   Barbering and cosmetology


          SOURCE:    Board of Barbering and 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.









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          Assembly Amendments clarify that issuing a license or license  
          renewal may be made contingent upon all administrative fines  
          being paid.

          


          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  
            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  








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            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.

          4)Provides that that issuing a license or license renewal may be  
            made contingent upon all administrative fines being paid.


          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.








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          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  
          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 Disciplinary Review  
          Committee has increased from $372 to $565.









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          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  
          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  








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          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. 
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Assembly Committee on Appropriations analysis  
          dated June 29, 2016, this bill will have negligible state fiscal  
          impact.













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          SUPPORT:   (Verified8/4/16)


          Board of Barbering and Cosmetology (source)
          Professional Beauty Federation of California


          OPPOSITION:   (Verified8/4/16)


          None received

          ARGUMENTS IN SUPPORT:  The Professional Beauty Federation of  
          California believes that this bill responds to the industry's  
          concerns of individual licensees and salon owners paying twice  
          for the same cited violation.

          ASSEMBLY FLOOR:  77-0, 8/4/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chiu, Chu, Cooper, Dababneh,  
            Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher,  
            Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,  
            Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin,  
            Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,  
            Wood, Rendon
          NO VOTE RECORDED:  Chávez, Cooley, Roger Hernández


          Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
          8/5/16 13:55:52


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