NYC nail salon chain must pay $300K in unpaid wages

A nail salon chain with 25 locations in the city will pay out $300,000 to more than 100 current and former employees after having paid them less than minimum wage and not compensating them for overtime over a period of years, the office of New York Attorney General Letitia James announced this week. 

An investigation by AG’s office, the state Department of Labor and the state Department of State into Envy Nails begun in 2018 found that between 2015 and 2021, nail salons routinely misclassified their employees, many of them immigrants and workers of color, as independent contractors. 

Aside from the payout Envy Nails, which has locations in Manhattan, Queens and the Bronx, also must dissolve improperly registered corporate entities and submit reports to AG’s office for three years.

“Envy Nails did not pay minimum wage, cheating more than 100 salon workers out of the livelihoods they had rightfully earned,” James said in a statement. “We are holding them accountable for their crimes, and New Yorkers can rest assured that we will always fight for workers’ rights. Thank you to our partners in government and advocacy for working together with my office to ensure Envy Nails pays up and makes these workers whole.”

Members of the New York Healthy Nail Salons Coalition, including the New York Committee for Occupational Safety and Health and Adhikaar, have been calling on legislators to pass the Nail Salon Minimum Standards Council Act, which would establish a council made up of nail salon workers, salon owners and government representatives to recommend safety standards and minimum pricing for services in the industry.

“We believe building a better nail salon industry is possible and that’s why we continue to fight for the Nail Salon Minimum Standards Council Act and to organize workers,” Charlene Obernauer, NYCOSH's executive director, told The Chief. “I hope this case helps support our fight for this legislation. It is rare to find a worker who hasn’t experienced wage theft in the nail salon industry.”

Nearly half of workers misclassified 

Many nail techs have been susceptible to wage theft because they are purposefully misclassified as independent contractors, which allows employers to circumvent minimum wage, overtime and workers’ compensation laws. The New York Nail Salon Workers Association estimated that 46 percent of workers in the nail salon industry were wrongly considered independent contractors.

Additionally, nearly 90 percent of nail salon workers are foreign-born, and 84 percent are women. The workers often earned poverty wages: about half of Spanish-, Nepali- and Mandarin-speaking nail technicians in the state reported earning below minimum wage, according to a report by Cornell University’s School of Industrial and Labor Studies.

“In 2018, our union was proud to stand with nail salon workers at Envy and work with them to file wage theft complaints,” said Julie Bracero-Kelly, the general manager of the NY NJ Regional Joint Board of Workers United. “Labor violations like wage theft and employee misclassification are all too common in the nail salon industry and despite the risk of retaliation, these workers bravely stood up for their rights. The attorney general listened to them and acted to deliver justice. She has been a force for combating wage theft across the state, and we thank her and her partner agencies for investigating this case and fighting for workers who are too often left to fend for themselves.”

The AG’s office also announced that, in addition to the wage violations, the state Department of Taxation and Finance and the city Department of Finance found that Envy Nails underreported more than $2 million in taxable sales between September 2014 and August 2019. The nail chain owed at least $90,000 in sales tax and penalties.

One salon under the Envy Nails banner, Nails 181, pleaded guilty to third-degree grand larceny for failing to pay sales tax during this period, according to the AG’s office. Manhattan Supreme Court Judge Laurie Peterson ordered Nails 181 to pay more than $275,000.

clewis@thechiefleader.com