In conclusion
In an industry notorious for labor breaches, California’s historic labor law seeks to make nail salon employees—mostly Vietnamese women—full employees as opposed to contractors.
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Emily Micelli, like thousands of other Vietnamese-American women in California, began earning a living by painting nails. After working as a manicurist for two decades, she now provides her own nail art designs at a high-end salon in Newport Beach.
This year, a few lines in the state labor code completely changed her livelihood.
State-licensed nail technicians were given an exemption from Assembly Bill 5, a comprehensive 2019 bill that targeted the gig economy and mandated that many businesses designate workers as employees rather than independent contractors, just like other workers in the beauty sector.
The exemption was only in effect for nail salons. Thousands of manicurists throughout the state were left in legal confusion regarding their work status when it stopped on January 1st of this year. Many, like Micelli, are opposed to being classed as hourly employees of the salons where they work because they prefer the freedom to choose their clients and establish their own hours as independent contractors.
Now, lawmakers are racing to renew the exemption, although temporarily, with the support of labor unions and workers’ groups.
Labor organizations said they still want to address the law’s targeting of an industry with an abused workforce. More than 80% of nail salon employees are immigrants, with Vietnamese women making up the vast majority, according to a UCLA and California Healthy Nail Salons Collaborative advocacy group estimate. According to the report’s authors, those workers are susceptible to labor breaches, worker misclassification, and lower-than-minimum earnings.
Some manicurists and salon owners claim that inspection is discriminatory. This year, the state was sued by a collection of Vietnamese-owned nail salons and technicians, including Micelli’s workplace, Blu Nail Bar. They contend that excluding the beauty industry, which is primarily composed of Vietnamese licensees, from harsher employee classification regulations is racial discrimination.
Micelli remarked, “I think they singled us out.” They have the option to work as independent contractors for hair. They don’t let us for nails.
Two radically distinct aspects of a pervasive enterprise have been revealed by the argument. Even though they acknowledge the difficult working circumstances in certain salons, many of the women who file, shape, and paint Californians’ nails in more than 6,000 locations around the state say they should be treated as autonomous, professional artists on par with their peers in the beauty business.
Micelli claimed that previous salons where she worked forced her to perform more procedures in a manner akin to an assembly line.
As an independent contractor, she sets her own fees, schedules her own appointments, and purchases her own materials to stay up to date with fashion trends. She gives the salon a larger cut than usual for its upmarket setting by splitting the profits 50/50 with it.
Her favorite thing about having a flexible schedule is being able to talk to each client individually.
She claimed that at other salons, manicures lasted 30 minutes, after which you had to go on to the next one. I’m hoping the government won’t make us go somewhere where I have to follow salon regulations. I think of myself as a nail technician.
More complaints specifically in nail salons
Over the past 50 years, manicures—once considered a luxury service—have grown widely available and have come to represent ordinary indulgence.
The rise in immigrant-owned nail salons and the introduction of new equipment and acrylic nails are partly to blame. Nail tech job became a preferred step on the economic ladder for Vietnamese American workers and entrepreneurs, starting with a group of refugee women in Sacramento who learned how to do nails from Hollywood actress Tippi Hedren’s personal manicurist in the 1970s.
Since 1987, California’s licensed manicurist population has more than tripled, reaching over 125,000 in 2023. According to Jaime Schrabeck, a Carmel manicurist and industry advocate who examined data from the state Board of Barbering and Cosmetology, nearly half of individuals who take the annual license exam do it in Vietnamese.
The New York Times brought workplace injustices to the attention of the country in 2015. Workers at Korean-owned nail salons in New York City were the main focus of its research, which revealed that they were underpaid, trafficked, and exposed to hazardous chemicals.
California lawmakers took note and held a hearing on the sector that year.
Also, nail salons had become entangled with state labor regulators. Based on the degree of control the companies had over the manicurists’ work and hours, the state accused the Southern California chain Happy Nails & Spa in a 2013 lawsuit of incorrectly categorizing its employees as independent contractors rather than employees. The state was defeated. The chain is currently one of the companies fighting over AB 5.
Because they are entitled to benefits like minimum wage, overtime, meal breaks, workers’ compensation, and sick days, employees are more costly.
Former Assemblymember Lorena Gonzalez, who called the 2015 hearing, stated, “We discovered that there were more complaints specifically about misclassification and more findings about misclassification in manicurists than overall cosmetology.”
Many salon-renting beauty professionals fought to continue working freely when Gonzalez sponsored AB 5 in 2019 to enforce even harsher worker classification restrictions.
As long as they could demonstrate that they collected their own fees, scheduled their own clients, and ran their own companies apart from the salons where they worked, they were free from the legislation and allowed to continue working as independent contractors.
In order for lawmakers to assess attempts to teach the primarily immigrant business owners how to properly classify workers, the exemption was only in place temporarily.
Lawmakers extended the interim exception for nail salons until 2025 in 2021. However, the matter was forgotten as Gonzalez resigned from the Legislature to become the head of the California Labor Federation. Manicurists were caught off guard when a later bill to permanently provide the exemption died without a hearing.
Nail workers scramble to comply
When Janice Luper learned that the legislation was going to change, she was renting space in a salon in Tehachapi, where she had her own key and city business license.
According to Gonzalez, such agreements are obviously independent and would not qualify as employment under AB 5. However, the legislation makes it difficult to prove she is not an employee, requiring that a contractor’s job be outside the regular course of the hiring entity’s business, according to Luper, a self-described rule-follower. Luper was concerned that her own services would not be sufficiently distinct because the salon owner also provided manicures.
She thus left. Luper is well aware that many other nail technicians cannot afford the $30,000 investment it took to create their own business with a hair stylist by the end of the year.
Republican Assemblymember Tri Ta, who is Vietnamese and represents Little Saigon in Orange County, took notice of other salon owners and manicurists. Last year, he proposed a bill to permanently exclude nail businesses from AB 5. There was never a hearing on it by the Assembly Labor Committee.
Rather, the committee, led by Hayward Democrat Liz Ortega, presented an alternative bill in June to prolong the exemption through 2029. In order to create regulations that guarantee manicurists have equal rights under California law, the Employment Development Department and Labor Commissioner’s Office would have to research the prevalence of labor violations in the nail industry.
Like any other workers, these are diligent immigrant women who work long hours in frequently dangerous workplaces where business owners dictate their hours and pay, Ortega said in a statement.
However, the proprietors of nail salons are frequently immigrants themselves, and Ta expressed displeasure in an interview that they were breaking labor laws in a special way, stating that bad actors exist in many sectors of the economy.
“You cannot treat everyone unfairly because of one bad actor,” he remarked.
This is how everybody does it
A third of nail technicians are independent contractors, which is three times greater than the percentage for all workers, according to a UCLA study. However, what some refer to as rampant misclassification is actually a regular, acceptable business strategy.
One Southern California manicurist, who spoke to CalMatters on the condition of anonymity to avoid jeopardizing her job, said she learned of the practice 10 years ago when she started working at a salon in the Inland Empire.
The Vietnamese proprietors, according to the Chinese-American manicurist, limited her to simple manicures and passed her over for the more costly services. She was paid a 40% commission on each service and issued a 1099 form for contractors, even though the owner set her hours and handled payments.
Her manager turned down her request to be labeled a W-2 employee.
She said, This is how everybody does it, she said. All we’re doing is what everyone else does.
She returned to manicuring in December 2023, and bounced around for a year in several salons with similar arrangements. She now works at a salon in Monrovia, finally as a W-2 employee. But she said she s still paid a 60% commission.
It s not hourly, which I don t feel is fair because I m there over 10 hours per shift, she said. Sometimes when customers come late, we have to stay late.
On an average day, she said she makes about $100 before tips a rate far below California s $16.50 minimum hourly wage.
She recently drove down a boulevard in Rowland Heights, stopping in every nail salon she saw to look for a new job. The responses she heard in a half-dozen businesses were the same: No W-2 jobs, no hourly pay.
She s never reported it to state labor officials.
I need a job, and this is how they re doing it everywhere, she said.
The costs of employment
Six months after opening her own salon, Luper now finds herself on the other side of the business equation.
The overhead costs have been much higher than renting a space, and as the only manicurist in the building, she s too busy with her own clients to handle walk-ins. She wants to bring in another nail technician ideally a booth renter to take customers off her hands and offset costs.
But she s held off with the legal situation up in the air. She never envisioned being an employer, and said she can t afford to take on payroll taxes, workers compensation insurance and paying an hourly wage regardless of whether there are customers. Besides, she said, she doesn t think she could pay enough to attract an employee.
No manicurist is going to work for the minimum wage, she said. That s not why we went to school.
She wishes the state worked harder to investigate bad actors and enforce existing classification laws rather than complicating a business model that worked for her. In the past year, the state Labor Commissioner s Office has cited one nail salon for misclassifying workers, spokesperson MariCarmen Estudillo said.
The Monrovia manicurist said she d love to make the hourly minimum wage. But she, too, is wary about AB 5. Business isn t busy like it was at her first salon, where customers would crowd in and she would work the whole day without a break. If nail salons had to pay all the costs of formal employment, she doesn t think they d survive.
I want to get paid for the time there, she said. At the same time, I don t know how long I can have this job at this place if this continues.
And without the job, she can t build up clientele to work independently, as she dreams. She wants to offer her own nail designs, specializing in the builder gel technique that s become a popular alternative to acrylics. And she s studying for an esthetician s license so she can also do facials.
Then she wants to rent her own studio in a quiet salon, with just one chair and one client at a time.
Read More
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