New York Nail Salon Wage Bond in Effect

This month marked the deadline for New York’s nail salons to purchase a wage bond, and despite an effort to invalidate the new law, it went into effect on October 6. A nail salon with one or more employees needs at least $25,000 in coverage to ensure that all legal wages are paid, including overtime. A typical wage bond costs about 2-3% of the coverage price; so a $25,000 bond would cost salon owners $500-$750 each year.

While some salons have complied, not all have. According to the governor’s press office, more than 1,500 applications have so far been received by surety bond providers. “This was only a fraction of all surety companies responding, so we need to wait,” says Frank Sobrino, deputy director of communications. The state requires all new salons to have proof of coverage in order to obtain a business license. Salons already in business are required to show proof of coverage during an inspection by the Department of State.

There have been several protests, including one in front of the New York Times building on September 21. Representatives of the nail industry included salon owners, and also appeared to include employees. The outcry was directed at the May multi-part series written by reporter Sarah Nir, revealing nail workers who were not getting paid minimum wage by their employers. It was also a reaction to the wage bond, which some feel will only make things worse for nail techs by forcing salon owners to close their doors or reduce staff.

Although nail techs with wage disputes have always been able to make claims for reimbursement, the wage bond ensures that wage monies will be available even if the salon shuts down. “What changed is that there is perhaps a greater awareness of their rights,” Sobrino says.