Thursday, June 5, 2008

Nail Technicians are Employees, Not Independent Contractors

A group of nail salons in Sacramento, Calif., were fined recently for not carrying workers’ compensation insurance on nail technicians. The salons classified the manicurists as independent contractors, but under state law they are clearly employees.

I’d venture that this is happening in states other state in nail salons, hair salons and other service-related industries.

Here’s the low-down on the situation in California, from the Sacramento Bee:

In recent sweeps of 17 beauty and nail salons in Sacramento, the state Division
of Labor Standards and Enforcement issued 16 citations to shop owners for
illegally classifying workers as independent contractors.

The DLSE
fined employers $1,000 for each employee not covered by workers' compensation
insurance and additional penalties for cash payment of wages without proper
documentation of withheld taxes and other deductions. In Sacramento County, the
fines totaled $61,000.

The DLSE carried out the two-day enforcement
raids in nine other counties in Northern California and the Bay Area, including
Placer County.

Labor Commissioner Angela Bradstreet said labeling
workers independent contractors allows employers to avoid payroll
taxes.

"It goes directly to the underground economy, and it gives
employers who are not complying with the law an unfair competitive advantage
over someone who is complying with the law," Bradstreet said.

In
addition, workers do not receive the benefits and labor protections that they
would be entitled to under state laws, she said.

Workers classified
as "employees" are protected by minimum wage law and laws mandating breaks,
workers' compensation, unemployment insurance, disability insurance and Social
Security.

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