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Regulations Protecting Nail Salon Workers

Wage and Hour Lawyers Advocating for New York City Employees

At Phillips & Associates, we aggressively advocate for nail salon workers who have been exploited by their employers. This industry in New York has seen its share of wage and hour, rest break, and health violations. In May 2014, the New York Department of Labor investigated and found 116 violations in 29 nail salons. Another state investigation found 901 violations in 182 businesses. As of August 2014, 43% of salons had not paid minimum wage or overtime. At Phillips & Associates, our New York City wage law attorneys can protect the rights of workers who have not received what they are due. We can explore the details of your situation and discuss your options.

Protections for Nail Salon Workers

In May 2015, Governor Andrew Cuomo announced emergency regulations and legislation to protect nail salon workers. Due to the seriousness of the violations, the state of New York required "appearance enhancement businesses" like nail salons to obtain wage bonds as security for unpaid wages. This requirement is intended to protect from mistreatment about 40,000 workers, many of whom are female immigrants. The secretary of state can issue a fine or a cease and desist order if the wage bond is not procured.

The provisions became enforceable 60 days after the Department of Financial Services submitted a certification that the coverage was readily available on the market. This certification was submitted in August 2015.

The Korean American Nail Salon Association of New York and the Chinese Nail Salon Association of East America, two trade groups that represented the owners of nail salons affected by the wage bond requirement, sued the governor and the state in Albany two weeks after the emergency regulations. They argued that there are too few surety companies that offer the required bond and that the companies that do have unfair requirements like high personal credit scores, which put the bond out of reach for owners. They claimed the wage bond requirement was arbitrary and capricious and tried to have the regulations voided.

The plaintiffs also tried to argue that the certification was a violation of their equal protection rights. They argued that the regulations and certification focused on appearance enhancement businesses that had nail services, and Asian-Americans owned most of these businesses.

In response, the state argued it had provided 15 informational forums for owners and had tried to help salon owners comply. The state also argued that most nail salon owners who had made a good faith effort to get the bond were able to do so and that employers who paid workers what they were owed would not have a reason to fear the wage bond requirement. Only 18 wage bond applications out of 1,188 had been denied, while 98.5 percent of those processed had been approved.

In the lawsuit, Acting Justice Michael Melkonian upheld the regulations, including the wage bond requirement. He found the state had a legitimate interest in protecting nail salon workers from wage theft, failures to pay the minimum wage, and other labor abuses and exploitation. He noted that there were nine insurers and 12 producers that intended to issue and sell bonds. Justice Melkonian rejected the trade groups' argument that the Department of Financial Services did not have the authority to make the certification, since the emergency regulation gave the agent the sole authority to provide the certification. Addressing the equal protection argument, the judge said that the regulations were neutral on their face, and there was a rational relationship between the legislation and a legitimate state interest.

Consult a New York City Attorney for an Employment Dispute

The New York City workers’ rights lawyers at Phillips & Associates represent nail salon employees and other workers in cases involving employment law violations. The regulations at issue in the above ruling were enacted to require nail salons to provide better working conditions. A nail salon's failure to procure the required wage bond is illegal and may be strong evidence in a lawsuit. Call our attorneys at (833) 529-3476 or use our online form to set up a free consultation. Phillips & Associates serves employees throughout Manhattan, Queens, the Bronx, Brooklyn, and Staten Island as well as in Westchester County and Long Island.

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