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Wednesday, 06 May 2015 00:00

ASCCA/CAA Joint Legislative Day Focuses on Minimum Wage/Taxes on Labor

With major concerns about bills that can greatly impact their businesses, collision and mechanical repair companies came from all over the state to attend ASCCA /CAA’s Joint Legislative Day on April 14 in Sacramento. Attendees met with their local legislators and discuss two “hot button” bills, one that would extend a sales tax to labor operations and another that would increase the minimum wage in the Golden State.

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State Assembly Member Brian Jones spoke to the ASCCA/CAA members during their Legislative Day in Sacramento, CA on April 14.


Legislative Day speaker Pat Dorais, chief of the Bureau of Automotive Repair (BAR), discussed the two organizations with an overview of recent BAR activities, while praising the ASCCA/CAA’s ongoing relationship with the BAR and State Assembly Member Brian Jones.

Following a welcome from Steve Vanlandingham, ASCCA state president, everyone was briefed by Jack Molodanof, the lobbyist for both organizations, who taught the members about the correct protocol to be used while meeting with their legislators or their representatives. Molodanof always opens with a joke or amusing anecdote, but then he’s all business. Coaching the members of ASCCA/CAA about how to approach their local representatives is always crucial and that’s why Molodanof always sets down the rules first.

Molodanof said he was happy with the turnout. "It was a very successful legislative day where the automotive repair industry converged on the State Capitol and raised awareness and educated legislators and staff about the issues that directly impact their businesses. It was wonderful to see so many new faces at this year's legislative day!”

With more than 90 scheduled appointments throughout the Capitol’s offices all day long, ASCCA/CAA members broke into smaller groups to cover as much territory as possible. As members searched the hallways looking for politicians’ offices, body shop and mechanical shop owners were intently focused on meeting with their representatives to discuss the two main bills on their radar.

CAA Executive David McClune was pleased with the attendance and the fact that so many appointments were scheduled.

“This is our big moment every year when we can meet with our political representatives,” McClune said. “We can influence these bills before they become laws and provide valuable feedback for our key decision makers, so we tell our members to seize the moment and make the most of it. Most importantly, we can provide them with a look into how our members run their businesses and all of the factors that can affect them and their livelihoods.”

In addition to meeting with their legislators, a copy of the ASCCA Telematics Guiding Principles was provided to every congress or assembly person they visited. “Our members did an outstanding job communicating our concerns to our elected representatives,” Vice Chair of ASCCA Government Affairs Committee James Justus said. “A special thank you goes out to ASCCA member Jeff Stitch, who attended Legislative Day even though he suffered a heart attack two weeks prior to the event. Now that’s a dedicated member! Jeff also made a passionate talk about the importance of legislative day and why every mechanical and collision shop owner or manager should participate in communicating with the politicians who can greatly impact our future in this industry.”

SB 8 (Hertzberg): Tax Reform-Extending Sales Taxes to Services

This bill intends to expand the state portion of the sales tax to all services, including automotive labor, but excluding health care services; education services and businesses with less than $100,000 in annual gross sales. The bill will have a disproportionate impact on low-income individuals, because they own older cars that require more frequent repairs. If passed, it will increase the cost of vehicle service and repairs making it less affordable for working families who require transportation.

Specifically, the passing of SB 8 will increase the cost for auto body repairs and may cause some vehicles that can be safely repaired to be unnecessarily “totaled.” When car repairs become more expensive due to more taxes, people will forego the repairs, leading to potential vehicle safety issues. In addition, this bill will encourage the underground economy and result in more “midnight body shops” that can charge less and thereby create an unfair advantage in the marketplace.

The ASCCA and CAA are both very concerned about this bill, even though it’s still a work in progress. “There are some large gaps still in this bill and that’s why we’re taking a wait and see approach,” Molodanof said. “It’s more of an intent bill and it’s not even close to being finalized yet, but we want to be involved in the conversation, because obviously this can affect our bottom line in a huge way.”

SB 3 (Leno): Minimum Wage: Annual Adjustment

This bill would increase the minimum wage on and after January 1, 2016 to no less than $11 hourly; on and after July 1, 2017 to no less than $13 hourly and thereafter commencing January 2019 based on the California Consumer Price Index. This bill would have additional burdens on automotive repair shops to pay employees double the minimum wage when employees are required to bring their own tools.

“We are obviously opposed to this bill, because it could literally cripple small businesses, including automotive repair companies,” Molodanof explained. “The bill would have significant ramifications on automotive repair shops because automotive repair employers are required to pay employees double the minimum wage when employees are required to bring their own tools. It means going from the current $18 an hour ($9/hr. is the current minimum wage) to $26.00 an hour ($13/hr. minimum wage under SB 3) and that is a huge cost increase for shops. With other costs increasing all the time for shops, including increased worker’s compensation rates, increased energy costs and increased costs associated with the Affordable Care Act, this is just another thing for business owners to deal with and that’s why we oppose it.”

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