NY's nail salon owners to pay $2 million in unpaid wages

Updated: 2016-05-10 11:35

By HEZI JIANG in New York(chinadaily.com.cn)

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One year after he established a task force to oversee nail salons in the state, New York Governor Andrew Cuomo announced on Monday that 143 salons have been ordered to pay a total of $2 million in back pay and damages to 652 employees.

"New York State is cracking down like never before on the unscrupulous individuals that take advantage of the hardworking people they employ," Cuomo said.

Of the $2 million in back pay, a spokesman for Cuomo told China Daily that $600,000 already has been paid.

The Nail Salon Industry Enforcement Task Force was set up after a New York Times investigation showed worker abuse at nail salons, a majority of which are owned by Chinese-and Korean-Americans. Led by the New York State Department of Labor, the task force has opened investigations into more than 450 nail salon businesses, with 383 being completed to date.

The state ordered a series of reforms for the salons, including protective equipment standards for the workers, which prompted an outpouring of anger by nail salon owners. Several rallies were held to protest the reforms, which also required salons to purchase wage-bonds, a form of insurance to cover claims for unpaid wages of workers.

Last year, the Chinese Nail Salon Association of East America and the Korean American Nail Salon Association of New York filed a lawsuit against Cuomo and the State of New York to block the wage bond requirement. But the case was dismissed by the State Supreme Court.

"The wage bond hit the industry very hard," said Yu Jian, chairman of the Chinese organization told China Daily on Monday. "They encourage workers to sue their employers."

But Yu acknowledged that the regulation has pushed the nail salon industry on the right track by "forcing the businesses owners to learn about laws and about how to do payrolls," he said.

"Some of them may have paid their workers enough, but because they've never done the payroll properly. There is no evidence," he said. "Now most salons have set up payroll systems."

His association has held classes for salon owners to study the business laws.

"Many of them, in fact, thought they were paying the workers more than the minimum wage, but they didn't pay extra for overtime. They did the wrong calculation." Yu said. "The new stuff that they learned will benefit them in the future no matter if they stay in the nail salon industry or open other businesses."