The Western Carwash Association (WCA) is reaching out to car wash operators in California affected by the increase in the required surety bond.
Car washes and detail shops in California had their surety bond increased by 1,000 percent beginning January 1, 2014. With the passage of California bill AB1387 that went into effect at the beginning of the year, California car wash operators are required to post a $150,000 surety bond, unless the wash is covered by a collective bargaining agreement.
The previous surety bond amount was $15,000. Car washes are struggling to qualify for this increased bond, and those that do are facing huge premiums. Some small businesses cannot find bonding companies who can even provide this increased bond, no matter the premium. Surety bonds are in place to protect workers’ wages in the event the car wash goes out of business. However, there are several other methods to collect these wages and surety bonds have been seldom used.
WCA has spent the past several months working with its members and industry regulators seeking resolution to this issue. WCA is currently in the process of working with lawmakers and other stakeholders in Sacramento on legislation to reduce the bond requirement while increasing penalties for those operating outside the law.
WCA is calling upon all California car wash operators (regardless of whether they are a member or not) to speak with one voice to make lawmakers understand the impact that the new increase will have on businesses. WCA is asking business owners to contact their California State Assembly and State Representative at www.findyourrep.ca.gov/ and ask them to encourage AB 1387’s author, Assemblyman Roger Hernandez, to work with WCA on a bill to reduce the surety bond amount while increasing penalties for those breaking the law.