As we previously posted, Governor Andrew Cuomo recently instituted new measures to protect nail salon workers and educate employers in New York. The new legislation and regulations aim to crack down on the exploitation of workers in the nail salon industry. In his latest effort to remedy abuse and unlawful practices in this industry, nail salon owners will now be required to secure wage bonds by October 6, 2015 or otherwise face fines and penalties such as the possible closing of their businesses. Salon owners would be able to use the bonds to pay for judgments against them in wage-theft cases. The size of the bond that nail salon owners will be required to secure will depend on the number of employees at the business and the number of hours they work.
The securing of wage bonds is important because it has become commonplace for nail salon owners to claim that they do not have the means to pay judgments against them in wage-theft cases, yet would take steps to hide their assets. For instance, in 2012, manicurists at Babi, a Long Island chain, were awarded nearly a $500,000 judgment, but only have collected some $100,000. The chain’s owner claimed to not have the money to pay the judgment, but it was later found that he sold property worth several million dollars right before trial. This new requirement helps to combat situations like these. Cuomo stated, “Requiring owners to secure a wage bond will help ensure workers are paid what they are legally owed and that businesses have the funds they need to meet their financial obligations.”
This Firm will continue to monitor developments in Governor Cuomo’s initiatives.