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New York City carwash owners will now have to purchase the same amount of surety bond coverage regardless of if their employees are unionized. Judge Alvin Hellerstein, a federal judge in Manhattan, stopped the implementation of the Car Wash Accountability Actearlier this year and has now modified the law, allowing it to go into effect.
Judge Hellerstein struck down the Car Wash Accountability Act, passed in 2015, because of two different surety bond mandates for New York City carwash owners. The Act required a $150,000 surety bond for carwashes whose employees did not belong to a union, while unionized carwashes only needed a $30,000 surety bond. Hellerstein ruled the law unconstitutional because it encouraged membership in a union, “‘thereby impermissibly intrud[ing] on the labor-management bargaining process.'” The law never went into effect and would have been struck down completely, but the city of New York appealed Hellerstein’s decision.
Hellerstein agreed to allow the Car Wash Accountability Act go into effect if the surety bond mandate was changed,to require all New York City carwash owners to obtain a $150,000 bond.�The bond required is a wage bond, meaning it protects carwash employees from wage theft, dangerous working conditions, or other illegal actions by their employer. If the carwash were to close unexpectedly and employees were owed wages, the surety bond provides a way to seek backpay. The bond protects against the longstanding issue of wage theft in New York City carwashes; Retail, Wholesale, and Department Store UnionPresident Stuart Appelbaum referred to it as “endemic.”
The Act also contains licensing procedures for New York City carwash owners that have taken effect with Judge Hellerstein’s ruling. Carwash licensee applicants submit information to the New York City Department of Consumer Affairs(DCA). Some of that information includes:
- $550 fee per business location
- Applicant’s name and address
- Corporate structure and ownership
- Proof of workers’ compensation, unemployment, and disability insurance coverage
- Liability insurance coverage
New York carwash licensee applicants must include signed written statements certifying their compliance with several laws:
- �New York City Plumbing Code section 1003
- NYC Administrative Code section 24-334
- Surety bond requirement
- Certification that there are no judgments or warrants against the applicant for the violation of Chapter 2 of Title 20 of the NYC Administrative Code
New York City carwash licenses are valid for two years. The Car Wash Accountability Act details several more laws pertaining to licensure, including the records that must be kept by licensees. Read the law in its entirety and contact the New York City DCA with questions about carwash licenses.
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