BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: July 8, 2009 2009-2010 Regular
Session
Consultant: Rodger Dillon Fiscal:Yes
Urgency: No
Bill No: AB 236
Author: Swanson
Version: June 25, 2009
SUBJECT
Employment: car washes.
KEY ISSUE
Should the repeal date on statutes governing certain employment
practices of car washes be extended from January 1, 2010 to
January 1, 2014?
PURPOSE
To continue the state's program of enhanced regulation and
oversight of the car wash industry in order to minimize the
frequency of labor law violations that are common in that
business.
ANALYSIS
Existing law:
1.Regulates the car washing and polishing industry by requiring
specific recordkeeping requirements of car wash employers on
employee wages, hours and working conditions.
2.Requires car wash employers to register with the Labor
Commissioner and post a wage surety bond as specified.
3.Establishes a car wash worker fund into which penalties and
registration fees are deposited for disbursement by the Labor
Commissioner to employees of car washing or polishing
businesses found to be in violation of current law.
4.States that 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.
5.Requires the Labor Commissioner 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.
6.Contains a sunset date relating to the regulation of the car
washing and polishing industry to January 1, 2010.
This Bill:
1.Extends the sunset date on the statutory enforcement program
regulating the employment practices of car washes from January
1, 2010 to January 1, 2014.
2.Specifies that a new motor vehicle dealer, as defined, is not
an employer for the purposes of the car wash regulatory
provisions.
COMMENTS
1. Need for this bill?
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."
Hearing Date: July 8, 2009 AB 236
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Senate Committee on Labor and Industrial Relations
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 Labor Commissioner 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 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.
The Division of Labor Standards Enforcement in the Department
of Industrial Relations released the mandated study of the car
wash and polishing industry in April of this year. In the
report, DLSE said the number of registered firms increased
from 2007 to 2008 and that the number of citations decreased
in that period. However, the report found that there continue
to be hundreds of violations of labor standards. Many firms
had no workers' compensation for their workers, and there were
many other violations of labor law (e.g., child labor
Hearing Date: July 8, 2009 AB 236
Consultant: Rodger Dillon Page 3
Senate Committee on Labor and Industrial Relations
violations, and failure to pay minimum wages and overtime
pay).
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.
2. Proponent Arguments :
The California Labor Federation, the sponsor of this bill,
states that there are over 22,000 car wash employees in
California, leading 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.
Supporters 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.
3. Opponent Arguments :
None received.
SUPPORT
California Labor Federation (Sponsor)
American Civil Liberties Union
Hearing Date: July 8, 2009 AB 236
Consultant: Rodger Dillon Page 4
Senate Committee on Labor and Industrial Relations
American Federation of State, County and Municipal Employees
California Conference Board of the Amalgamated Transit Union
California Immigrant Policy Center
California School Employees Association
California Teamsters Public Affairs Council
Coalition for Humane Immigrant Rights of Los Angeles
Engineers and Scientists of California
International Longshore and Warehouse Union
Mexican American Legal Defense and Education Fund (MALDEF)
Professional and Technical Engineers, Local 21
Strategic Committee of Public Employees, LIUNA
UNITE HERE!
United Food and Commercial Workers, Western States Council
WORKSAFE
OPPOSITION
None received.
* * *
Hearing Date: July 8, 2009 AB 236
Consultant: Rodger Dillon Page 5
Senate Committee on Labor and Industrial Relations