Nail Salon Sweeps in New York Reveal Abuses and Regulatory Challenges

Ian Pajer-Rogers |

From The New York Times:

by Kim Barker and Russ Buettner

When a New York state labor investigator entered a Long Island nail salon last July, she spotted two women sneaking out the back. The owner insisted that they did not work there.

But the truth emerged several days later, when one of the women called the investigator and said her boss had told her to flee so she could not be interviewed about her wages. When the investigator returned to the salon, American Beauty, in Port Washington, N.Y., she was surprised when the owner lied to her again about the woman.

“I said, ‘Oh my God, I can’t believe this,’” recalled the investigator, Cecilia J. Maloney.

Labor investigators have swept through nail salons across the state since May, when Gov. Andrew M. Cuomo ordered them to step up their scrutiny of the industry in response to a series of articles in The New York Times that revealed abysmal pay and working conditions among nail salon workers.

From a regulatory perspective, the results of the inspection sweep seem to tell a straightforward story of widespread abuses. Although the state’s plans to crack down on the industry were highly publicized, all but a dozen of the 230 salons whose investigations were closed by late last year were cited for violating at least one labor law.

The Labor Department cited more than 40 percent of the salons, including American Beauty, for underpaying employees, directing them to pay $1.1 million in back wages and several hundred thousand dollars in damages to workers, according to a Times review of closed investigations. Some of the violations were egregious: One worker at a Manhattan salon was paid $30 a day for 10-hour shifts; another manicurist in Queens was paid only $200 for a 50-hour workweek; manicurists at seven salons were forced to work for free or had to pay salon owners a fee, ostensibly to learn the trade; several owners admitted to submitting fake payroll records in an effort to fool investigators.

But the details of the state inspections are perhaps most revealing about just how challenging it is to regulate a largely immigrant-run industry in which almost everything is done off the books and employers are often unfamiliar with the intricacies of state labor laws.

About 85 percent of the salons failed to maintain adequate payroll records, a violation of state law, making it by far the most common citation, according to the Times review. Without records, investigators were forced to accept whatever employees told them they were paid, usually in front of their bosses. Many workers fear retaliation if they are honest about illegal wages, manicurists and labor officials said. One owner, in fact, fired a worker who spoke to an investigator, investigators later found.

“We have a vulnerable worker population slowly coming to understand its rights, but some are still afraid and unsure of who to trust,” said Frank Sobrino, a spokesman for the Cuomo administration. “As a result, they do not come forward to report abuse.”

Labor investigators documented many of the abuses that were highlighted in The Times’s articles. But workers’ fears in speaking with inspectors, along with the fact that the state sweep came at a time of such intense scrutiny on the industry, complicate direct comparisons of the scope of the problems found by the state and The Times. Among the more than 100 manicurists interviewed by The Times, for example, only about a quarter said they were paid an amount that was the equivalent of minimum wage.

The inspection records reveal another reality: Many owners, even some of those making efforts to pay decent wages, simply failed to grasp the technical details of state labor laws. Many salon owners, for example, seemed unaware that they must pay one full hour of bonus wages when an employee’s shift spans more than 10 hours.

Nail workers routinely work days that stretch longer than eight hours and are paid in flat daily or weekly wages, a combination that does not square with state labor laws on overtime pay and essentially guarantee a violation, even when employees are paid a rate that works out to more than the state minimum wage.

In two dozen cases, for instance, owners paid employees an equivalent of at least the state minimum wage and overtime for the hours they worked, but because they did not correctly account for the overtime hours they were still cited for underpayment.

Excluding those cases, just over a quarter of the salons, 67 in total, paid wages documented by investigators that worked out to less than the state minimum wage, which was $8.75 an hour when the investigations occurred last year. Of those, 42 missed the mark by at least $50 a week.

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