Car Wash Bond

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Bond Description

As of January 1, 2014, the California Department of Industrial Relations’ Division of Labor Standards Enforcement requires car washes in the state of California to post a $150,000 surety bond prior to conducting business. California car wash surety bonds are put in place to ensure that principals (car washes) pay all earned wages, interest on wages and fringe benefits due to employees according to Sections 351 and/or 353 of the California Labor Code.

If the principal fails to pay all sums appropriately, the bond protects harmed parties from financial loss up to the full penal sum of the bond ($150,000). The principal must reimburse the surety for all damages paid out.  To be legally licensed, a carwash must complete an application, provide a surety bond, provide proof of tax filing, provide a written declaration, and more.   

Bond Amount

Minimum Bond of $150,000

Requiring Entity

State of California Division of Labor Standards

Underwriting Criteria

Personal credit check of all business owners as well as collection of 2 years company financials and a personal financial for all business owners

Premium Rate(s)

1 Year - Varies based on applicants qualifications*

Who is Required to Secure this Bond

Every person engaged in the business of car washing and polishing must register with the Labor Commissioner (California Code of Regulations, Title 8, Section 13680 through 13693). Car washing and polishing means washing, cleaning, drying, polishing, detailing, servicing, or otherwise providing cosmetic care to vehicles. Car washing and polishing does not include motor vehicle repair, as defined in Section 9880.1 of the Business and Professions Code. As part of the application process, all applicants for a car washing and polishing registration certificate must obtain a surety bond for at least $15,000.

Bond Requirement Specifics

The bond is required to protect all employees of the car wash company. If an employer fails to pay wages, interest on wages, fringe benefits, or violates Section 351 or 353 of the Labor Code and an employee is damaged thereby, the Labor Commissioner or the employee may proceed against the employer's surety bond by taking whatever action he or she deems appropriate to obtain the unpaid wages, interest on wages, fringe benefits, or gratuities from the bond (California Code of Regulations, Title 8, Chapter 6). An employee is defined as any person, including an alien or minor, who renders actual car washing and polishing services in any business for an employer, whether for tips or for wages, and whether wages are calculated by time, piece, task, commission, or other method of calculation, and whether the services are rendered on a commission, concessionaire, or other basis (California Labor Code Section 2051).

Who is protected Under this Bond

The bond protects all employees who provide car washing and polishing services in any business for an employer.

Underwriting Process

Each applicant must first complete and submit the application for a Car Wash Bond, which contains all of the pertinent information regarding the business and business owners. Once the application is received, a routine examination of the business owner’s/applicant’s personal credit history will be performed to determine approval of the bond.

What you Need to do Once you have your Bond

Once the Car Wash Account Bond has been approved and released to the applicant’s care, it must be filed with the State of California Division of Labor Standards along with the all related paperwork. The Division of Labor Standards will maintain the bond, which must remain effective at all times. If the bond is cancelled or terminated for any reason, the employer may not conduct business until a new surety bond is obtained.

Obligee Link

http://www.dir.ca.gov/dlse/HowToObtainCarWashRegistration.htm

* Please be advised that the quote you obtain for this bond may include a fee charged and retained by The Bond Exchange.