California Car Wash Bond

Before a car wash business can get a license or hire workers in California, they must purchase a California car wash bond. The California Department of Industrial Relations, Division of Labor Standards Enforcement, requires car washes to be registered with the state to obtain their license. As part of their business registration process, car washes must purchase and maintain a $150,000 car wash bond. The car wash bond protects the rights of car wash employees. It ensures that the employees are treated fairly regarding their working conditions and how much they get paid. If the car wash owner does not treat their employees according to the industry regulations, a claim can be filed against the bond.

Example CA Car Wash Bond
Example CA Car Wash Bond

How much does a California car wash bond cost?

Various factors, such as your credit score, industry experience, and the bonding company you choose, influence the cost of obtaining a car wash bond. Among these factors, your credit score holds the most significant impact on the final price. Typically, the cost of the bond is a percentage of the total bond amount, usually between 1% and 5% of the required amount. Individuals with high credit scores can anticipate paying around 1 % of the bond amount. In contrast, those with lower credit scores may face a higher cost, up to 5%



Who needs a California car wash bond?

Anyone opening up a new car wash or continuing operations on their existing car wash must post a $150,000 car wash bond to The California Department of Industrial Relations to register and renew their license.

Do all car washes in California need a car wash bond?

For most car washes, you will need to obtain a car wash bond. The only car washes that do not need to get a car wash bond are: 

  • Car washes that have a collective bargaining agreement
  • Self-service or automated car washes
  • Dealers who offer car wash services
  • Charity, youth sport, veteran, or service associations who offer car washes occasionally for a charitable purpose.

How do I renew a California car wash bond?

There is no need to renew your California car wash bond! This bond is continuous and will not expire after a set period. Once the bond is purchased, it will remain in effect until it is canceled or terminated. While you don’t need to renew your bond, you will need to renew your license, and as part of the renewal, you will need to show a new or continuous bond.

How do claims work on a California car wash bond?

The car wash bond ensures employees are paid their total wages and that the workplace environment follows the industry’s regulations, such as safety requirements. If a car wash owner is not complying with the regulations, their employee could file a claim against the car wash bond to collect their unpaid wages or due to unsafe working conditions. Then, the surety company will investigate if the claim is valid. If the claim is valid, the surety company will pay the affected employees up to the bond amount. 

It’s important to remember that surety claims differ from insurance claims in that once a claim is paid out, the car wash owner would be obligated to pay back the total claim amount to the surety company. Claims can be very costly and lead to your bond being canceled, so it’s always in the business’s best interest to stay out of claims by conducting business according to industry regulations. 

Why do I need a California car wash bond?

A California car wash bond is required to register for your license. It also achieves three goals:

  1. Filter out disqualified individuals from operating a car wash (i.e., those with ultra-low credit scores and bad credit histories for whom the surety company will not issue a bond).
  2. Provide a financial guarantee that a bonded car wash will meet legal labor laws and other related employer obligations.
  3. Protect employees if a minimum wage or fringe benefit requirement is violated.

While the bond is required by the California Department of Industrial Relations, Division of Labor Standards Enforcement, knowing that you are licensed and bonded also builds trust with your employees and customers. 

How do I register a car wash business in California?

Getting licensed and registered as a car wash can seem like an intense process, but it’s actually straightforward.

1. Complete the application online at the California Department of Industrial Relations website. The kind of information that you’ll need is:

  • Applicant’s name, address, and SSN (For a soft credit check)
  • Car wash’s name, address, and FEIN
  • Employees’ name, address, and SSN

2. Purchase and obtain a $150,000 car wash bond.

3. Obtain Workers’ Compensation Insurance

4. Submit all of the required documents with your application and bond

  • Proof of Workers’ Compensation Insurance
  • Tax information authorization form
  • $300 Registration fee for each location
  • Check with your city or county for any local government requirements. For example, Car washes in the South County Regional Wastewater Authority must have an industrial waste discharge permit certificate.

You can submit your application directly online. Still, you may also need to mail certain documents and paperwork to The California Department of Industrial Relations, Division of Labor Standards Enforcement, Licensing and Registration Unit at the following address:

Department of Industrial Relations
Division of Labor Standards Enforcement
P.O. Box 420603
San Francisco, CA 94142 

Once your application and all other documents are received and processed, the Department of Industrial Relations will review and issue your license!