California Manicurists May No Longer Be Booth Renters
As of January 1, 2025, California will no longer allow nail salons to have independent booth renters operating in their salons and all manicurists will be classified as employees!
This means all nail techs in California will have to be transitioned into W-2 employees, else the establishment owner will face not only regulatory fines but be prey to private litigation by “AB 5” head-hunting law firms specializing in these harassing lawsuits.
The PBF have been witness to dozens of such private-action lawsuits, in which small businesses have been financially strapped — and in some cases ruined — by these costly legal threats. And because of the stacked law against them under the provisions of the now infamous “AB 5” law, there’s no winning these challenges in court (and they are further insulted by having to pay the plaintiff’s legal expenses … meaning the greedy law firms who’ve been profiting off this new law since it was passed in 2020).
Fortunately until now, our industry has been shielded from AB 5, because we worked to get a legal carve-out for hair, skin and nail workers and barbers when that law was working it’s way through the Legislature in 2019. Unfortunately, due to the Legislators’ concern about one segment of our industry, manicurists and their establishment owners were only given a temporary exception that is set to expire this coming January.
The PBF have been lobbying California lawmakers and powerful lobbying interests — including labor unions (the primary defenders of AB 5 and ending all forms of independent contracting) — to allow the manicurist sunset date exception to be extended, but to no avail. To illustrate our challenge, the author of AB 5 is now the President of the most powerful union organization in Sacramento, the Labor Federation, so any wonder why this has been an uphill battle?! And with only one month left in this year’s legislative session, we’re not hopeful we’re going to be successful.
This means on January 1, 2025, any nail technician may be lured into filing legal action against their establishment owner for misclassifying them as an independent worker and not an employee, demanding back pay and other legal entitlements. And the considerable state labor regulatory apparatus could also come crashing down on those same salon owners, requiring withholding taxes and Workers’ Comp premiums retroactive to January 1, 2025.
This could spell disaster for this segment of our industry, which overwhelming relies upon the booth rental model and who won’t be able to absorb the additional costs of transitioning all of their manicurists into W-2 employees, including payroll taxes and Workers’ Comp premiums. And that doesn’t include the considerable costs of potential lawsuits for non-compliance post-January.
The PBF will continue to push lawmakers to extend the January 1 deadline before they adjourn in September, but if we are unsuccessful, we will need to martial this segment of our industry to rise up and demand that their elected representatives treat them justly and equally as the other two segments of our industry — which enjoy a permanent exception from AB 5. This grassroots campaign will need to begin in earnest come the new legislative session that begins next year. So stay tuned for your marching orders! [Hint: get to know your locally elected State Assembly member and Senator, now]
If you’d like to read more about this legal quagmire, you may see the relevant sections of the law here:
Business & Professions Code Section 2778 (b)(2)(L):
And to find out who represents you in Sacramento, go here:
