Effective December 4, 2017, the New York City Department of Consumer Affairs will begin requiring all New York City car wash operators to obtain a $150,000 surety bond as part of the licensing requirements. Previously, the bond amount varied from one operator to another. A car wash bond in an amount of $30,000 was needed for businesses with unionized workers, while a $150,000 bond was needed for all other car washes.
A Recap of New York City Car Wash Laws
On September 7, 2017, Mayor Bill de Blasio announced New York City had prevailed in the legal battle to regulate the car wash industry. The announcement followed a lengthy process of continuously amending the NYC rules relating to car washes in the city. Beginning in 2015, car wash owners have seen many changes to the requirements to maintain their business licenses.
Passed in the summer of 2015, the New York City Car Wash Accountability Act was established to combat worker injustices carried out by operators of car washes in New York City. The Act required operators of car washes within the city to receive a license prior to conducting business. As a result of resistance, including an industry group’s lawsuit, the act did not go into effect immediately. Then, in May 2017, federal judge Alvin Hellerstein struck down the Act on grounds that it breached federal due to the promotion of unionization and possible interference with employee-employer relations.
NYC Car Wash Bond and Licensing Requirements
In September 2017, the federal court revised its previous decision on the NYC car wash bond and licensing requirements and made amendments so that all NYC car wash owners must post a $150,000 bond as a licensing requirement. The following must be submitted to adhere to the car wash operator licensing requirements established by the Department of Consumer Affairs:
- Completed application
- Car wash self-certification
- Sales tax ID number or a certificate of authority application confirmation number
- Proof of workers’ compensation insurance, disability benefits insurance, commercial general liability insurance, and unemployment insurance (if applicable)
- Payment of license fee(s)
- $150,000 car wash bond
Why the NYC car wash bond is required
The $150,000 surety bond is required to ensure car wash owners make all payments to their workers as they are due. For example, if a car wash closes, the bond guarantees employees will still collect the salaries they are owed. Harmed employees can file a claim against their employer’s bond as a means to collect reimbursement for their losses. This surety bond can also provide coverage for fines or obligations owed to the city and even damages to vehicles or people who received car wash services.
If you operate a car wash in New York City and have questions about the requirement or need to get a quote for your surety bond, contact an expert by calling 1 (800) 308-4358 or click the button below.