There are so many government regulations that affect a detail business a savvy owner will do well to know them, both Federal & State, the latter, which can be stricter.
This primer and guide to laws and regulations, you should also consult NADA & ATD Federal Regulatory Compliance Chart Second Edition, available at Regulatory Affairs (requires member access). It lists federal laws and regulations by agency, notes to which they apply, and offers Web addresses for further information.
All Departments (General Management/Personnel)
• Age Discrimination in Employment Act: Protects individuals 40 years of age or older from age discrimination.
• Americans with Disabilities Act (ADA): businesses with 15 or more employees must make reasonable accommodations to allow disabled workers to perform their jobs and job applicants to access facilities.
• Consolidated Omnibus Budget Reconciliation Act (COBRA): Requires employers with 20 or more employees to continue health-care coverage for employees 18 to 36 months, depending on employee circumstances.
• Electronic deposit of taxes: The IRS requires all employers having more than $200,000 in aggregate depository taxes to deposit electronically through the Electronic Federal Tax Payment System.
• Electronic records retention: Revenue Procedure 98-25 explains the IRS requirements for retaining computerized accounting records.
• Emergency-response planning: Federal, state and local laws require a business to have emergency-response plans.
• Employee drug testing: Unionized businesses, while few if any carwash or detail business are unionized, you never know, must bargain with employee unions before implementing a drug policy that affects current employees. Bargaining is not necessary for preemployment drug testing. The Americans With Disabilities Act prohibits employers from discriminating against employees or applicants who have completed a drug treatment program or are currently undergoing such a program, as long as they aren’t currently abusing drugs.
• Employee Polygraph Protection Act: Prohibits employers from using polygraphs in preemployment screening; allows a polygraph use only in limited cases where the employee is reasonably suspended of a workplace incident involving economic loss to the employer.
• Employee Retirement Income Security Act (ERISA): Businesses offering retirement or health plans must provide employees with plan info, keep records, abide by fiduciary responsibilities, and set up a grievance process.
• Equal Pay Act: Amends the Federal Wage-Hour Law, prohibiting wage discrimination on the basis of sex.
• Estate tax: The estate tax exemption is $3.5 million in 2009 and the tax rate is 45 percent.
• Family and Medical Leave Act: Businesses covered by this law must post the act’s provisions and inform employees of their right to take this limited, unpaid leave for personal and family medical emergencies. Special provisions for military families.
• Federal child-support enforcement regs: Requires states to have procedures under which liens can be put on personal property – including vehicles – for overdue child support. Employers must place liens on wages of employees who are delinquent on child-support payments.
• Federal Civil Rights Act: Bars employment discrimination on the basis of race, sex, color, religion, or national origin. Prevents employers from asking job applicants certain questions (such as age, marital status, or childbearing plans.) Prohibits workplace sexual harassment, including behavior that creates a hostile environment.
• Federal wage-hour and child labor laws: Set minimum wage and overtime pay standards; describe which employees are exempt from minimum wage and overtime requirements (certain employees, those with incentive-based pay, such as salespeople, may be exempt if they meet specified conditions); and set standards for employing minors, including teen driving restrictions. Note that the federal minimum wage is now $7.25 per hour and with Washington State at $8.67 as the highest. A number of other state minimum wage rates are higher at $8.00 or more.
• Health Insurance Portability and Accountability Act: Generally prohibits health insurers from denying coverage to workers who lose or change jobs and bars insurers from excluding coverage for preexisting conditions for more than a year. Businesses with partially or fully self-insured health plans that generate $5 million or less in annual premiums must notify employees, retirees, or beneficiaries about their privacy rights and how their info could be used; designate someone to oversee the adoption and implementation of procedures to control the use and release of such data; train staff to understand those procedures; and secure patient records containing such info so it’s not available to people who don’t need it. The rule does not apply to workers’ comp and ADA compliance info.
• Immigration Reform and Control Act: Prohibits knowingly hiring illegal aliens and requires that employers complete and retain a form certifying that new employees are authorized to work in the United States. Includes “no-match” and I-9 rule requirements.
• IRS treatment of contract detailers: Although under general IRS rules, detailers are considered employees, versus independent contractors, the IRS may consider prevailing industry practices on a case by case basis. The agency may ask, for example, how many days a week an individual works at a detail shop and whether they works for any other detail business.
• Mandatory workplace posters: Notices, such as “Your Rights under the FMLA” “Equal Employment Opportunity Is the Law,” “Federal Minimum Wage,” and “Notice: Employee Polygraph Protection Act,” must be conspicuously displayed.
• Mental Health Parity Act: Requires insurers and employers to offer health care coverage for mental illness comparable to that for physical illness. Group health plans may not set dollar limits on mental health care lower than limits for general medical and surgical services. (Nothing requires employers to provide mental health coverage, and certain exemptions apply.)
• Miscellaneous record-keeping requirements: A multitude of requirements govern the length of time certain records must be maintained. Examples: Personal and corporate income tax records must be kept at least three years; tank notification forms for each underground storage tank must be kept indefinitely; copies of Form 8300 cash reports must be kept for five years.
• Newborns’ and Mothers’ Health Protection Act: Employers and insurers must provide minimum hospital stay benefits.
• OSHA blood borne pathogens rule: Businesses not within four minutes of an emergency health facility must have a program to respond to employees who suffer cuts. All businesses should have proper first aid kits.
• Section 89 of the Tax Reform Act: Employers are prohibited from discriminating against lower paid employees in their employee benefits packages.
• Section 179 Expensing: Permits immediate expensing of up to $250,000 for certain assets placed in service in 2008 (subject to phase-out rules).
• Uniformed Services Employment and Reemployment Rights Act (USERRA): Governs employment and reemployment rights of members of the U.S. uniformed services.
• Worker Adjustment and Retraining Notification Act (WARN): Requires businesses to give 60 days’ notice to workers prior to termination or store closing under certain circumstances.
All Departments (Customer)
• Americans With Disabilities Act (ADA): Prohibits discrimination against the physically handicapped in areas of employment, transportation, telecommunications, and public accommodations. Businesses must make reasonable accommodations to make facilities accessible – for example, installing ramps, as well as accessible parking lots, drinking fountains, public toilets, and wide doors.
• CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act: E-mailers must identify a commercial message as an advertiser or solicitation and provide their postal addresses and a mechanism to opt out of future commercial e-mails. If recipients opt out, senders must stop sending them commercial e-mail within 10 business days. Disclosure requirements don’t apply to e-mails relating to transactions or relationships, such as for warranty or the completion of transactions requested by consumers. No one may send commercial e-mails to wireless devices unless recipients provide express prior authorization to receive them. So that senders can recognize wireless addresses, the FCC maintains a list of wireless domain names at www.fcc.gov/cbg/policy/DomainNameDownload.html. Commercial e-mailers must check the list monthly. (Additional provisions prohibit deceptive headers, misleading subject lines, and other spam tactics.)
• Driver’s Privacy Protection Act: Denies access to personal info to state motor vehicle records except for limited purposes, such as driver’s safety, theft and recalls. Also restricts release of personal info for marketing.
• FTC Privacy Rule: Businesses much issue notices of their privacy policies to customers especially if the business discloses nonpublic information about consumers to third parties. Also restricts disclosures of nonpublic personal information.
• FTC prohibition against deceptive and unfair trade practices: Prohibits deceptive or unfair practices.
• FTC Safeguards Rule: Businesses must develop, implement, and maintain – and regularly audit – a comprehensive, written security program to protect customer information.
• FTC Telemarketing Sales Rule (TSR): Imposes many of the TCPA restrictions (below) on businesses who telemarket across state lines. Requires businesses that sell, or obtain payment authorization for services during interstate phone calls to abide by the prohibition against numerous deceptive and abusive acts and to maintain certain records for 24 months.
• FTC Written Warranty Rule: Businesses must display warranties for services or products sold, or post signs in prominent places telling consumers that copies of the warranties are available for review.
• Telephone Consumer Protection Act (TCPA): Imposes numerous restrictions on telemarketing, including national and company specific do not call rules, calling time restrictions, caller ID requirements, fax advertising rules, and restrictions on the use of auto dialers and prerecorded messages. Senders of fax ads must provide authorized recipients on the first page of the fax ad a phone number, fax number, and toll-free mechanism (each must be available 24/7) for opting out of future fax ads.
• USA PATRIOT Act: Businesses must search their records and provide info about individuals or entities identified by the federal Financial Crimes Enforcement Network with whom they conducted transactions or created accounts. New businesses are temporarily exempt from the law’s anti-money-laundering program requirements.
Detail Bays
• Clean Water Act: Sets standards for federal, state and local regulation of wastewater and storm water from detailing.
• Department of Transportation (DOT) hazardous materials handling procedures: Require employees who load, unload, and package hazardous chemical products, to be trained in safe handling practices.
• IRS Core Inventory Valuation: Revenue Procedure 2003-20 created an optional method for valuing core inventories for taxpayers who use Lower of Cost or Market Valuation Method.
• LIFO/FIFO Inventory Accounting Method: Revenue Procedure 2002-17 provides a safe harbor method of accounting that authorizes the use of replacement cost to value year end parts inventory.
• OSHA Hazard Communication Standard (Right to Know laws): Employers must inform staffers about chemical hazards they are exposed to in the workplace; keep MSDS sheets on site where employees have access to them; and train staffers to properly handle the hazardous materials with which they work.
• OSHA workplace health and safety standards: Extensive regulations cover a multitude of workplace issues and practices, from hydraulic lift operation to the number of toilets required. One standard requires employers to determine if workplace hazards warrant personal protective equipment, then train employees on its use. Verbal reports must be made within eight hours of any incident involving hospitalization of three or more workers or any death.
• Resource Conservation and Recovery Act (RCRA): Comprehensive environmental law regulating many detail shops functions, including any underground storage tanks and the storage, management, and disposal of hazardous wastes. Underground tanks must be monitored, tested, and insured against leaks; leaks and spills must be reported to federal and local authorities and cleaned up. The law also regulated new tank installations. Detailers must obtain EPA ID numbers if they generate more than 220 lb. per month (about half of a 55 gallon drum) of certain substances and must use EPA certified haulers to remove the waste from the site; dealers must keep records of the shipments. New rules specifically enforce hazardous waste recycling.
• Safe Drinking Water Act: To protect underground drinking water from contamination, you may be barred from discharging waste liquids.
• Superfund (Comprehensive Environmental Response, Compensation, and Liability Act {CERCLA}): As waste generators, many detailers are subject to Superfund liability. You must be careful when selecting waste haulers. You can deduct the cost of cleaning up contaminated soil and water in the year it’s done.
This primer and guide to laws and regulations, you should also consult NADA & ATD Federal Regulatory Compliance Chart Second Edition, available at Regulatory Affairs (requires member access). It lists federal laws and regulations by agency, notes to which they apply, and offers Web addresses for further information.
All Departments (General Management/Personnel)
• Age Discrimination in Employment Act: Protects individuals 40 years of age or older from age discrimination.
• Americans with Disabilities Act (ADA): businesses with 15 or more employees must make reasonable accommodations to allow disabled workers to perform their jobs and job applicants to access facilities.
• Consolidated Omnibus Budget Reconciliation Act (COBRA): Requires employers with 20 or more employees to continue health-care coverage for employees 18 to 36 months, depending on employee circumstances.
• Electronic deposit of taxes: The IRS requires all employers having more than $200,000 in aggregate depository taxes to deposit electronically through the Electronic Federal Tax Payment System.
• Electronic records retention: Revenue Procedure 98-25 explains the IRS requirements for retaining computerized accounting records.
• Emergency-response planning: Federal, state and local laws require a business to have emergency-response plans.
• Employee drug testing: Unionized businesses, while few if any carwash or detail business are unionized, you never know, must bargain with employee unions before implementing a drug policy that affects current employees. Bargaining is not necessary for preemployment drug testing. The Americans With Disabilities Act prohibits employers from discriminating against employees or applicants who have completed a drug treatment program or are currently undergoing such a program, as long as they aren’t currently abusing drugs.
• Employee Polygraph Protection Act: Prohibits employers from using polygraphs in preemployment screening; allows a polygraph use only in limited cases where the employee is reasonably suspended of a workplace incident involving economic loss to the employer.
• Employee Retirement Income Security Act (ERISA): Businesses offering retirement or health plans must provide employees with plan info, keep records, abide by fiduciary responsibilities, and set up a grievance process.
• Equal Pay Act: Amends the Federal Wage-Hour Law, prohibiting wage discrimination on the basis of sex.
• Estate tax: The estate tax exemption is $3.5 million in 2009 and the tax rate is 45 percent.
• Family and Medical Leave Act: Businesses covered by this law must post the act’s provisions and inform employees of their right to take this limited, unpaid leave for personal and family medical emergencies. Special provisions for military families.
• Federal child-support enforcement regs: Requires states to have procedures under which liens can be put on personal property – including vehicles – for overdue child support. Employers must place liens on wages of employees who are delinquent on child-support payments.
• Federal Civil Rights Act: Bars employment discrimination on the basis of race, sex, color, religion, or national origin. Prevents employers from asking job applicants certain questions (such as age, marital status, or childbearing plans.) Prohibits workplace sexual harassment, including behavior that creates a hostile environment.
• Federal wage-hour and child labor laws: Set minimum wage and overtime pay standards; describe which employees are exempt from minimum wage and overtime requirements (certain employees, those with incentive-based pay, such as salespeople, may be exempt if they meet specified conditions); and set standards for employing minors, including teen driving restrictions. Note that the federal minimum wage is now $7.25 per hour and with Washington State at $8.67 as the highest. A number of other state minimum wage rates are higher at $8.00 or more.
• Health Insurance Portability and Accountability Act: Generally prohibits health insurers from denying coverage to workers who lose or change jobs and bars insurers from excluding coverage for preexisting conditions for more than a year. Businesses with partially or fully self-insured health plans that generate $5 million or less in annual premiums must notify employees, retirees, or beneficiaries about their privacy rights and how their info could be used; designate someone to oversee the adoption and implementation of procedures to control the use and release of such data; train staff to understand those procedures; and secure patient records containing such info so it’s not available to people who don’t need it. The rule does not apply to workers’ comp and ADA compliance info.
• Immigration Reform and Control Act: Prohibits knowingly hiring illegal aliens and requires that employers complete and retain a form certifying that new employees are authorized to work in the United States. Includes “no-match” and I-9 rule requirements.
• IRS treatment of contract detailers: Although under general IRS rules, detailers are considered employees, versus independent contractors, the IRS may consider prevailing industry practices on a case by case basis. The agency may ask, for example, how many days a week an individual works at a detail shop and whether they works for any other detail business.
• Mandatory workplace posters: Notices, such as “Your Rights under the FMLA” “Equal Employment Opportunity Is the Law,” “Federal Minimum Wage,” and “Notice: Employee Polygraph Protection Act,” must be conspicuously displayed.
• Mental Health Parity Act: Requires insurers and employers to offer health care coverage for mental illness comparable to that for physical illness. Group health plans may not set dollar limits on mental health care lower than limits for general medical and surgical services. (Nothing requires employers to provide mental health coverage, and certain exemptions apply.)
• Miscellaneous record-keeping requirements: A multitude of requirements govern the length of time certain records must be maintained. Examples: Personal and corporate income tax records must be kept at least three years; tank notification forms for each underground storage tank must be kept indefinitely; copies of Form 8300 cash reports must be kept for five years.
• Newborns’ and Mothers’ Health Protection Act: Employers and insurers must provide minimum hospital stay benefits.
• OSHA blood borne pathogens rule: Businesses not within four minutes of an emergency health facility must have a program to respond to employees who suffer cuts. All businesses should have proper first aid kits.
• Section 89 of the Tax Reform Act: Employers are prohibited from discriminating against lower paid employees in their employee benefits packages.
• Section 179 Expensing: Permits immediate expensing of up to $250,000 for certain assets placed in service in 2008 (subject to phase-out rules).
• Uniformed Services Employment and Reemployment Rights Act (USERRA): Governs employment and reemployment rights of members of the U.S. uniformed services.
• Worker Adjustment and Retraining Notification Act (WARN): Requires businesses to give 60 days’ notice to workers prior to termination or store closing under certain circumstances.
All Departments (Customer)
• Americans With Disabilities Act (ADA): Prohibits discrimination against the physically handicapped in areas of employment, transportation, telecommunications, and public accommodations. Businesses must make reasonable accommodations to make facilities accessible – for example, installing ramps, as well as accessible parking lots, drinking fountains, public toilets, and wide doors.
• CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act: E-mailers must identify a commercial message as an advertiser or solicitation and provide their postal addresses and a mechanism to opt out of future commercial e-mails. If recipients opt out, senders must stop sending them commercial e-mail within 10 business days. Disclosure requirements don’t apply to e-mails relating to transactions or relationships, such as for warranty or the completion of transactions requested by consumers. No one may send commercial e-mails to wireless devices unless recipients provide express prior authorization to receive them. So that senders can recognize wireless addresses, the FCC maintains a list of wireless domain names at www.fcc.gov/cbg/policy/DomainNameDownload.html. Commercial e-mailers must check the list monthly. (Additional provisions prohibit deceptive headers, misleading subject lines, and other spam tactics.)
• Driver’s Privacy Protection Act: Denies access to personal info to state motor vehicle records except for limited purposes, such as driver’s safety, theft and recalls. Also restricts release of personal info for marketing.
• FTC Privacy Rule: Businesses much issue notices of their privacy policies to customers especially if the business discloses nonpublic information about consumers to third parties. Also restricts disclosures of nonpublic personal information.
• FTC prohibition against deceptive and unfair trade practices: Prohibits deceptive or unfair practices.
• FTC Safeguards Rule: Businesses must develop, implement, and maintain – and regularly audit – a comprehensive, written security program to protect customer information.
• FTC Telemarketing Sales Rule (TSR): Imposes many of the TCPA restrictions (below) on businesses who telemarket across state lines. Requires businesses that sell, or obtain payment authorization for services during interstate phone calls to abide by the prohibition against numerous deceptive and abusive acts and to maintain certain records for 24 months.
• FTC Written Warranty Rule: Businesses must display warranties for services or products sold, or post signs in prominent places telling consumers that copies of the warranties are available for review.
• Telephone Consumer Protection Act (TCPA): Imposes numerous restrictions on telemarketing, including national and company specific do not call rules, calling time restrictions, caller ID requirements, fax advertising rules, and restrictions on the use of auto dialers and prerecorded messages. Senders of fax ads must provide authorized recipients on the first page of the fax ad a phone number, fax number, and toll-free mechanism (each must be available 24/7) for opting out of future fax ads.
• USA PATRIOT Act: Businesses must search their records and provide info about individuals or entities identified by the federal Financial Crimes Enforcement Network with whom they conducted transactions or created accounts. New businesses are temporarily exempt from the law’s anti-money-laundering program requirements.
Detail Bays
• Clean Water Act: Sets standards for federal, state and local regulation of wastewater and storm water from detailing.
• Department of Transportation (DOT) hazardous materials handling procedures: Require employees who load, unload, and package hazardous chemical products, to be trained in safe handling practices.
• IRS Core Inventory Valuation: Revenue Procedure 2003-20 created an optional method for valuing core inventories for taxpayers who use Lower of Cost or Market Valuation Method.
• LIFO/FIFO Inventory Accounting Method: Revenue Procedure 2002-17 provides a safe harbor method of accounting that authorizes the use of replacement cost to value year end parts inventory.
• OSHA Hazard Communication Standard (Right to Know laws): Employers must inform staffers about chemical hazards they are exposed to in the workplace; keep MSDS sheets on site where employees have access to them; and train staffers to properly handle the hazardous materials with which they work.
• OSHA workplace health and safety standards: Extensive regulations cover a multitude of workplace issues and practices, from hydraulic lift operation to the number of toilets required. One standard requires employers to determine if workplace hazards warrant personal protective equipment, then train employees on its use. Verbal reports must be made within eight hours of any incident involving hospitalization of three or more workers or any death.
• Resource Conservation and Recovery Act (RCRA): Comprehensive environmental law regulating many detail shops functions, including any underground storage tanks and the storage, management, and disposal of hazardous wastes. Underground tanks must be monitored, tested, and insured against leaks; leaks and spills must be reported to federal and local authorities and cleaned up. The law also regulated new tank installations. Detailers must obtain EPA ID numbers if they generate more than 220 lb. per month (about half of a 55 gallon drum) of certain substances and must use EPA certified haulers to remove the waste from the site; dealers must keep records of the shipments. New rules specifically enforce hazardous waste recycling.
• Safe Drinking Water Act: To protect underground drinking water from contamination, you may be barred from discharging waste liquids.
• Superfund (Comprehensive Environmental Response, Compensation, and Liability Act {CERCLA}): As waste generators, many detailers are subject to Superfund liability. You must be careful when selecting waste haulers. You can deduct the cost of cleaning up contaminated soil and water in the year it’s done.