• Wage Theft Reaches Nail Salons
  • June 16, 2015
  • Law Firm: Pessin Katz Law P.A. - Towson Office
  • To address wage theft, among other work related issues in nail salons, New York Governor Andrew Cuomo recently imposed “wage bond” or increased insurance coverage for unpaid wages requirements on salon owners. The wage bond requirement was part of a series of measures proposed to protect the nail salon workers after a New York Times investigation revealed that many nail salon workers were paid less than minimum wage, had their tips withheld and were not paid overtime.

    A wage bond is a means to protect low-wage workers by tying licensure to protecting wages through the bond. Typically, the bond’s cost is set at a percentage of payroll. Should an employer fail to pay wages for whatever reason, the employees have the ability to make claim against the bond.

    After the imposition of the emergency measures, employees of a chain of nail salons in New York City filed a class-action lawsuit against the owners for allegedly paying the workers $60 or less a day.

    According to the National Employment Law Project’s publication “Winning Wage Justice: An Advocate’s Guide to State and City Policies to Fight Wage Theft”, Maryland specifically requires such a bond from farm-labor contractors as a condition of their licensure. Historically, nationwide, the bonds are most frequently required for public works and private construction projects. Overall, 38 states require the bonds for some jobs. The requirements vary from state to state.