Business Management

California Nail Salon Fined $1.2 million for Misclassifying Workers

According to an article in Temecula Patch, Temecula, Calif.-based Young’s Nail Spa was fined more than $1.2 million for misclassifying workers and failing to pay them regular wages, as well as requiring them to work long hours with few or no breaks and no overtime pay.

The California Department of Industrial Relations Division of Labor Standards investigated multiple complaints against the salon owners including failure to pay minimum wage. To avoid having pay overtime, the owners mischaracterized their employees as independent contractors.

Labor Commissioner Julie Su was quoted in the article, saying, "Using misclassification as a business model not only denies workers of their rightful pay, but also gives the employer an unfair advantage over law-abiding businesses."

Young’s Nail Spa was ordered to pay $670,040 in reimbursement to the affected workers and $572,187 in civil penalties.

This comes on the heels of a recent California Supreme Court decision that significantly narrows the definition of an independent contractor, putting traditional booth rental salons in legal jeopardy in the state.

Click here to read more about booth renter/independent contractor issues in the salon.

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