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California's AB5 Law under fire, nail techs sue state over worker classification – what the law states?
California's AB5 Law under fire, nail techs sue state over worker classification – what the law states?

Time of India

time28-06-2025

  • Business
  • Time of India

California's AB5 Law under fire, nail techs sue state over worker classification – what the law states?

A federal lawsuit has been filed against California, challenging its labor rules concerning nail technicians, as per a report. The lawsuit, which was filed in the US District Court for the Central District of California, claimed that Assembly Bill 5 (AB5), violates the 14th Amendment, as it does not allow nail technicians to work as independent contractors, as reported by MoneyWise. What is AB5 and Why It Was Introduced Assembly Bill 5, which was passed in 2019, changed how companies classify workers, as per the report. This came after a 2018 Supreme Court ruling against Dynamex Operations West, which had misclassified delivery drivers as independent contractors to cut costs, which led the assembly bill to form ground rules for who can be an independent contractor, according to the Moneywise report. Under the new law, workers must meet three conditions to be categorised as a contractor, which include working independently, performing tasks outside the company's core business and offering their services to other clients, as reported by MoneyWise. If a worker does not come under these conditions, they must be treated as employees, with protections like minimum wage, overtime pay, workers' compensation and unemployment insurance, according to the MoneyWise report. ALSO READ: Pokrovsk in peril? Tensions surge as 111,000 Russian troops gather near Ukraine's frontline hotspot Lives Turned Upside Down Pro Nails Association pointed out that the change had shaken up an industry, which has many immigrant employees from Vietnam, and generates about $3 billion a year, reported MoneyWise. Live Events California Assemblyman Tri Ta (R-Westminster), who is the representative of Little Saigon, said that, "Their lives have turned upside down overnight," and "It is not just unfair, it is discrimination," as quoted in the report. Vietnamese Nail Techs Say Their Livelihoods Are at Risk California's AB5 Law's change is not in favour of nail salon owners, and the owner of two Happy Nails & Spa franchises, An Tran, is taking the state to court, arguing the rules impede how salons operate day-to-day, as reported by MoneyWise. Tran explained that turning contractors into full-time employees would mean higher payroll costs, higher insurance and tighter margins for owners, who already deal with overhead costs like rent and supplies, according to the report. Tran told the LA Times, "We don't have customers all the time. That's going to cost us a lot more to pay them for the downtime when they don't have any customers," as quoted in the MoneyWise report. ALSO READ: Iran moves women prisoners to hellhole farm jail after airstrike hits notorious Evin prison A Fight About Community and Identity According to the lawsuit, the fight is also about community, as many Vietnamese refugees had started working in nail salons in the late 1970s with the aim to rebuild their lives in America and now, even decades later, that legacy has continued, reported MoneyWise. The lawsuit also pointed out that over 82% of California nail technicians are Vietnamese, and about 85% are women, according to the report. The attorney for the plaintiffs, Scott Wellman told KTLA 5, 'Vietnamese American manicurists have faced blatant discrimination under California's labor laws, stripped of the same rights and freedoms afforded to others in their industry,' adding, 'If the State of California refuses to fix this injustice, we are prepared to hold them accountable in federal court,' as quoted by MoneyWise. Low Pay and Health Risks Also Part of the Story While, worker advocates have highlighted that the lawsuit also points out the deeper issues of exploitation across the industry, as per the report. A UCLA Labor Center report showed that about 80% of nail salon workers earn pay at or below two-thirds of the median full-time wage, more than double the national low-wage rate for all workers and many salons are reportedly concerned about health and safety conditions as well, as per the report. FAQs Why are nail technicians suing the state of California? They say AB5 unfairly does not allow them to work as independent contractors, which threatens their livelihood and community-built businesses. How are nail salons affected by AB5? Salon owners now have to treat nail technicians as employees, which comes with higher costs and less flexibility, as per the report.

Vietnamese-American salon owners are suing California after having their lives ‘turned upside down overnight'
Vietnamese-American salon owners are suing California after having their lives ‘turned upside down overnight'

Yahoo

time27-06-2025

  • Business
  • Yahoo

Vietnamese-American salon owners are suing California after having their lives ‘turned upside down overnight'

A new federal lawsuit is targeting California's labor rules, and the state's Vietnamese-American nail technicians are at the center of the fight. Filed at the U.S. District Court for the Central District of California in Santa Ana, the lawsuit argues that a 2020 law, Assembly Bill 5, stripped nail technicians of their right to work as independent contractors, which violates the 14th Amendment's promise of equal protection. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it The change has shaken up an industry with many immigrant employees from Vietnam. That industry also generates about $3 billion a year, according to the Pro Nails Association. Representative of Little Saigon, California Assemblyman Tri Ta (R-Westminster), confirmed fear and frustration are flooding his office, and it's impossible to ignore. "Their lives have turned upside down overnight," Ta said at a news conference. "It is not just unfair, it is discrimination." While some are critical of the law, which has turned their livelihoods upside down, labor advocates argue it's a step toward ensuring a workforce that is often overlooked and underpaid, earns fair, stable wages. In 2019, California passed Assembly Bill 5, a law that redefined how companies classify workers. The law stemmed from a 2018 Supreme Court ruling against Dynamex Operations West, which had misclassified delivery drivers as independent contractors to cut costs. The assembly bill established ground rules for who can be an independent contractor. Under the new law, workers must meet three conditions to be classified as contractors. These include working independently, performing tasks outside the company's core business and offering their services to other clients. If not, they must be treated as employees, with protections including minimum wage, overtime pay, workers' compensation and unemployment insurance. For nail salon owners, this shift isn't in their favor. An Tran, who owns two Happy Nails & Spa franchises, is taking the state to court, arguing the rules impede how salons operate day-to-day. Turning contractors into full-time employees means higher payroll costs, higher insurance and tighter margins for owners, who also deal with overhead costs such as rent and supplies. "We don't have customers all the time. That's going to cost us a lot more to pay them for the downtime when they don't have any customers," Tran told the LA Times. Read more: You don't have to be a millionaire to gain access to . In fact, you can get started with as little as $10 — here's how This fight is also about community. Many Vietnamese refugees turned to nail salons in the late 1970s as a way to rebuild their lives in America. Decades later, that legacy endures. More than 82% of California nail technicians are Vietnamese, and about 85% are women, according to the lawsuit. 'Vietnamese American manicurists have faced blatant discrimination under California's labor laws, stripped of the same rights and freedoms afforded to others in their industry,' Scott Wellman, attorney for the plaintiffs, said in a statement to KTLA 5. 'If the State of California refuses to fix this injustice, we are prepared to hold them accountable in federal court.' Worker advocates add that the lawsuit highlights deeper issues of exploitation across the industry. A UCLA Labor Center report found nearly 80% of nail salon workers earn pay at or below two-thirds of the median full-time wage, more than double the national low-wage rate for all workers. Beyond low wages, many salons are reportedly concerned about health and safety conditions as well. Former nail technician Pabitra Dash confirmed those risks firsthand. She and her husband struggled with miscarriages while she was working in the salon industry. Once she quit, she was finally able to carry her baby to term. While her doctor never pinned the miscarriages on the chemicals she used at her job, Dash said she and her husband felt relieved they had a child after she left. '(My doctor) said, 'It's really good for your health and your baby,'' Dash told NBC News. Stoicism has been the response of many workers, who are worried that speaking up could cost them shifts or even their jobs. The federal lawsuit has turned nail salons into the latest flashpoint in California's struggle to balance gig work with fair labor protections. Salon owners fear that stricter rules might make it harder to keep their doors open, while many technicians quietly worry they'll lose their employee rights. This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Federal lawsuit claims California's labor code discriminates against Vietnamese nail techs, salon owners
Federal lawsuit claims California's labor code discriminates against Vietnamese nail techs, salon owners

Yahoo

time03-06-2025

  • Business
  • Yahoo

Federal lawsuit claims California's labor code discriminates against Vietnamese nail techs, salon owners

A federal civil lawsuit against California alleges that the state's Labor Code discriminates against Vietnamese-American manicurists and salon owners, following the passage of a 2020 law that changed how employees and independent contractors are classified. The suit, filed in U.S. District Court in Santa Ana on Saturday, argues that only nail technicians are excluded from being classified as independent contractors due to a California law enacted in 2020. Nail technicians, many of whom are Vietnamese-American, were also considered independent contractors before the law's passage. According to the suit, 'in California, approximately 82% of all nail manicurists/ pedicurists ('nail technicians') are Vietnamese American, and 85% of these are women.' 'The penalties for misclassifying a worker as an independent contractor are severe, and when the defendants, as heads of their enforcement agencies, enforce the new rule prohibiting nail technicians from being independent contractors, the damage to the plaintiffs will be severe and irreparable. In this regard, the salon plaintiffs will be forced out of business and will be forced to close their doors. In addition, the salon plaintiffs will be subject to significant assessments and financial penalties that will be impossible to pay,' the suit added. California Assemblyman Tri Ta (R-Westminster) stated that he has introduced legislation, Assembly Bill 504, to restore equal rights to manicurists. The labor law switch occurred in 2020, when AB 5, a law that altered the classification of workers as employees or independent contractors, took effect. Before its passage, in 2018, the California Supreme Court changed the requirements companies must use to label their workers as independent contractors. At the time, companies that opposed the bill waged a campaign to prevent its passage. The businesses that filed the suit include multiple locations of Happy Nails & Spa, Holly and Hudson, and Blu Nail Bar. 'Since January, Vietnamese American manicurists have faced blatant discrimination under California's labor laws, stripped of the same rights and freedoms afforded to others in their industry,' Scott Wellman, attorney for the plaintiffs, said in a statement. 'If the State of California refuses to fix this injustice, we are prepared to hold them accountable in federal court.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Federal lawsuit alleges discrimination against Vietnamese women nail techs
Federal lawsuit alleges discrimination against Vietnamese women nail techs

Los Angeles Times

time02-06-2025

  • Business
  • Los Angeles Times

Federal lawsuit alleges discrimination against Vietnamese women nail techs

The fight for licensed manicurists to be able to work as self-employed without passing a test is going to court. Backed by Vietnamese American nail technicians and nail salon owners holding protest signs, including 'stop Asian hate,' Republican Assemblyman Tri Ta announced Monday morning the filing of a discrimination lawsuit outside of the Ronald Reagan Federal Building and U.S. Courthouse in Santa Ana. 'Earlier this year, our office received many concerns from Vietnamese American manicurists and nail salon owners,' Ta said at a news conference. 'Their lives were turned upside down overnight when the independent contractor status expired on January 1.' 'It is not just unfair, it is discrimination,' he added. Licensed barbers, cosmetologists, estheticians and electrologists can still work as independent contractors under state labor law without being subjected to a rigorous test. But exemptions under Assembly Bill 5 expired this year for manicurists. The change has left manicurists and nail salon owners alike confused as to whether non-employees can continue renting booths for their businesses — a decades-long industry practice. Ta, whose 70th Assembly District encompasses Little Saigon, said 82% of manicurists in the state are Vietnamese, with 85% of those being women. The federal discrimination suit, filed on May 31, represents several Orange County nail salon businesses as well as individual manicurists. Gov. Gavin Newsom and the heads of five state agencies and boards are named as defendants. 'This lawsuit seeks only one thing — to make sure that all professionals in the beauty industry are treated equally and to eliminate the obvious discrimination against the Vietnamese community,' the complaint reads. Attorney Scott Wellman, who is litigating on behalf of the nail salon owners and manicurists, held up a copy of the complaint during the news conference. He claimed the equal protection rights of his clients under the U.S. Constitution are being violated by the lack of an exemption. 'This wrong has to be righted,' Wellman said. The suit represents a change in strategy for those fighting on behalf of aggrieved manicurists and nail salon owners. In February, Ta introduced Assembly Bill 504, which aimed to reinstate the exemption for manicurists, but later claimed the proposed legislation couldn't even get a hearing from the committee on labor and employment. He followed up in March by calling for the U.S. Department of Justice to launch an investigation into alleged racial discrimination codified in California labor law, before ultimately turning to federal court. 'These hardworking professionals deserve the same freedom to set their own hours, to choose their own clients, to rent their own booths and to run their own businesses on their own terms just like other peers in the beauty industry,' Ta said Monday. Ta and the suit cite statistics from a UCLA Labor Center report on California's nail salon industry that was published last year. Co-authors of the report, though, have been publicly critical of Ta's efforts to have the exemption reinstated. 'As an industry predominantly consisting of Vietnamese and female manicurists, AB 5 protects the community from misclassification and labor violations that have long existed at the workplace so that they can receive the wages, benefits and protections that all workers deserve,' said Lisa Fu, executive director of the California Healthy Nail Salon Collaborative and report co-author. The report found that 80% of nail salon workers are considered low-wage earners, with 30% of manicurists in the state classified as self-employed, which is triple the national rate. Assemblywoman Lorena Gonzalez, who authored the sunset provision in AB 5, previously told TimesOC that the nail salon industry has a long history of high misclassification rates that needed added guardrails for labor rights 'while still allowing individual business owners the ability to work as a sole proprietor and simply rent space from a salon.' Manicurists who back the federal discrimination suit spoke out at Monday's press conference. 'I want to be able to continue to work as an independent contractor,' said Loan Ho. 'It gives me more flexibility. I have time to raise my children.' Emily Micelli works out of Blu Nail Bar at Fashion Island in Newport Beach, which is the lead plaintiff in the suit. She has more than 20 years of experience as a nail technician and doesn't want to be a nail salon employee. Micelli left the previous nail salon she worked out of when the owner wouldn't allow her to continue as an independent contractor. 'I cannot keep clients on my phone, make appointments and come up with my own custom design packages,' Micelli said after the news conference. 'I have to abide by the salon's rules. It will make me lose business.' Micelli believes that while the law may be well-intended, it otherwise serves to discriminate against Vietnamese American women like herself. 'I know the law wants to protect us as workers,' she said, 'but being a W-2 [worker] is better for office workers not for people like us, who are artists. I'm actually an artist — a nail artist.'

Vietnamese American salon owners sue California alleging labor code is discriminatory
Vietnamese American salon owners sue California alleging labor code is discriminatory

Miami Herald

time02-06-2025

  • Business
  • Miami Herald

Vietnamese American salon owners sue California alleging labor code is discriminatory

Several Vietnamese American-owned nail salons in Orange County have sued California, alleging the state's labor code is discriminating against their businesses. The lawsuit, filed in U.S. District Court in Santa Ana on Friday, alleges that the state's labor code violates the 14th Amendment's guarantee of equal protection under the law by forcing nail technicians to be classified as employees. The suit argues that professionals in the beauty industry for years have operated as independent contractors, renting space in a salon and bringing in their own clients. That changed at the beginning of 2025, when nail technicians in the labor code became required to be classified as employees, the lawsuit said. California Assemblyman Tri Ta (R-Westminster), who represents Little Saigon and surrounding communities, said his office has fielded much concern from Vietnamese American nail salon owners. "Their lives have turned upside down overnight," Ta said at a news conference Monday morning. "It is not just unfair, it is discrimination." The switch in labor law came back in 2019, when a sweeping law governing worker classification rules across various industries called Assembly Bill 5 was approved - a law that codified a California Supreme Court decision creating a stricter test to judge whether a worker should be considered an employee rather than an independent contractor. AB 5 sought to crack down on industries where many workers are misclassified as independent contractors, who are not afforded protections including minimum wage, overtime pay and workers' compensation that employees have access to. But various industries have said AB 5 targets them unfairly, creating an uneven playing field for businesses. Some professions received carve-outs, including doctors, accountants, real estate agents and hairdressers; while others such as truckers, commercial janitors and physical therapists must abide by the tighter classification rules. Some implementation of the law was staggered to give industries, including nail technicians, time to adapt. The lawsuit describes how the nail salon industry in California became dominated by Vietnamese workers in recent decades, when Vietnamese refugees began fleeing to the U.S. in large numbers in 1975 after the fall of Saigon in America's failed military intervention in Southeast Asia. The industry "has become synonymous with the Vietnamese community," the lawsuit said, with more than 82% of all nail technicians in California being Vietnamese American, and some 85% women. The businesses that filed suit include multiple locations of Blue Nail Bar, Happy Nails & Spa and Holly and Hudson Nail Lounge. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.

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