BILL ANALYSIS
AB 236
Page 1
ASSEMBLY THIRD READING
AB 236 (Swanson)
As Introduced February 6, 2009
Majority vote
LABOR & EMPLOYMENT 6-1 APPROPRIATIONS 12-5
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|Ayes:|Monning, Bill Berryhill, |Ayes:|De Leon, Ammiano, Charles |
| |Eng, Furutani, Ma, | |Calderon, Davis, Fuentes, |
| |Portantino | |Hall, John A. Perez, Price, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+----------------------------|
|Nays:|Gaines |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, |
| | | |Audra Strickland |
| | | | |
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SUMMARY : Eliminates a sunset date on a statutory enforcement
program regulating the employment practices of car washes.
EXISTING LAW :
1)Contains a sunset date relating to the regulation of the car
washing and polishing industry to January 1, 2010.
2)Requires the Labor Commissioner (LC) to report to the
Legislature no later than December 31, 2008, on the status of
labor law violations and enforcement in the car washing and
polishing industry.
3)Regulates the car washing and polishing industry by requiring
specific recordkeeping requirements of car wash employers on
employee wages, hours and working conditions.
4)Requires car wash employers to register with the LC and post a
wage surety bond as specified.
5)Establishes a car wash worker fund for which penalties and
registration fees are deposited for disbursement by the LC to
employees of car washing or polishing businesses found to be in
violation of current law.
AB 236
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6)States charitable groups, rental car agencies, self-service or
automated car wash that have no more than two full-time
employees for cashiering and/or maintenance purposes, and
licensed vehicle dealers or automotive repair businesses are
exempted.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor and absorbable costs due to industry fees.
COMMENTS : In 1999 SB 1097 (Hayden) which sought to regulate the
car wash industry, was vetoed by the Governor. In his veto
message the Governor said, in part: "I am vetoing this bill I do
not believe that the need to register car washes with the LC has
been demonstrated. I am however asking the Director of Industrial
Relations (DIR) to review the activities of the car washing
industry and make any and all appropriate recommendation to me by
June 30, 2001."
In response to the Governor's veto directive, DIR filed an
internal report about labor law violations in the industry and
possible remedies, considering limited resources and widespread
violations that affect other industries in the state.
Additionally, in early 2003, DIR conducted a coordinated
enforcement sweep of the car washing and polishing industry in the
Los Angeles area finding numerous labor law violations, collecting
back wages and penalties due, totaling over $250,000.
As a result of proven violations in this industry AB 1688
(Goldberg) "The Car Wash Worker Bill" was signed into law and took
effect on January 1, 2004. AB 1688 contained a sunset date of
January 1, 2007.
The final car wash regulations were promulgated by DIR and finally
adopted by the Office of Administrative Law December 2005.
SB 1468 (Alarcon) of 2006 extended the sunset date relating to the
regulation of the car washing and polishing industry to January
1, 2010, and required the LC to report to the Legislature no
later than December 31, 2008, on the status of labor law
violations and enforcement in the car washing and polishing
industry.
In March 2008 the Los Angeles Times reported the results of an
investigation of the car wash industry finding that many owners
pay less than half of the required minimum wage and that
AB 236
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two-thirds of those inspected by the state since 2003 were out of
compliance with one or more labor laws. Some violations included
underpaying workers, hiring minors, operating without workers'
compensation insurance and denying workers their meal and rest
breaks.
Due to the lack of enforcement of this law, combined with the wage
and hour violations that continue to plague the industry this bill
seeks to permanently extend this law.
The Division of Labor Standards Enforcement (DLSE) was required to
issue a report no later than December 31, 2008, on the
effectiveness of the enforcement program. The report has yet to
be issued.
Arguments in support : The California Labor Federation, the
sponsor of this bill, state that with more than 14,000
establishments and $5 billion in reported revenues car washing in
the United States is a big business. California leads the nation
in both the number of establishments and the number of employees.
Unfortunately, many car wash employers routinely violate basic
labor laws leading to unsafe and unhealthy workplaces for workers
and communities they serve. With the passage of the Car Wash
Registry Act, the Legislature acknowledged that existing laws did
not adequately protect some of the state's most vulnerable
low-wage workers and recognized the opportunity to level the
competitive playing field for law abiding businesses.
They also contend, this bill is still needed due to the continued
severe and widespread labor violations in the industry. This
industry clearly thrives on working outside the law. This bill
was intended to be a tool to root out the egregious violations of
labor law that occur in this industry. As the law has been
implemented, enforcement efforts in the underground car wash
economy have begun to improve and for the first time workers have
had access to justice. This bill will enable the Car Wash
Registry Act to provide strong protections and remedies for car
wash workers who are exploited by unscrupulous employers.
Analysis Prepared by : Lorie Erickson / L. & E. / (916) 319-2091
FN: 0001045