Current law in the state of California would make it illegal for manicurists to booth rent at the end of 2024. You read that right: California manicurists and nail salon owners will lose their right to be independent contractors. We know that legislation is tough to stay on top of, let along make sense of, so we will break it down for you and let you know what you can do.
The Legislation
In an effort to avoid workplace exploitation of employees, the California Supreme Court decision Dynamex Operations W. v. Superior Court of Los Angeles in 2018 turned the tides by changing employer law in California to recognize that a worker who performs services for a hirer is an employee and not an independent contractor for wage and benefits reasons. This was unless, of course, the employer could prove otherwise in a three-part test. In other words, the burden was shifted to the owner to prove that a worker is an independent contractor.
Shortly after this significant change, Assembly Bill No. 5 was introduced by Lorena Gonzalez in 2019 to codify the court decision for the purpose of unemployment insurance. More important and controversial, this law also exempted certain professions from the ABC test.
After dedicated lobbying from California-based licensed manicurist and industry advocate Jaime Schrabeck and licensed esthetician Wendy Cochran, the bill's author was persuaded to exempt all licensed beauty professionals from the ABC test. According to the legislation, that included, "Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber or licensed cosmetologist, with conditions
(I) Sets their own rates, processes their own payments, and is paid directly by clients.
(II) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.
(III) Has their own book of business and schedules their own appointments.
(IV) Maintains their own business license for the services offered to clients.
(V) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.
(VI) This subdivision shall become inoperative, with respect to licensed manicurists, on January 1, 2022."
However, because of concerns of exploitation, licensed manicurists were singled out with an inoperative date of Jan. 1, 2022, meaning the exemption would end only for manicurists on this date. This date was postponed with Assembly Bill 1561 to Jan. 1, 2025. According to Schrabeck, "Subsequent bills have been introduced to eliminate the inoperative date altogether, but they have failed to move forward."
What Can You Do?
Schrabeck finds this legislation to be "the most urgent and consequential issue facing California nail professionals, and most know nothing about it."
If you are a licensed nail technician, a booth renter, a nail salon owner or even just a licensed nail technician in any state concerned about the future of your profession, now is the time to act. "Licensed manicurists in California will lose their right to work as independent contractors on Dec. 31, 2024 unless the legislature passes (and governor signs) a new law to extend or eliminate this inoperative date," noted Schrabeck.
The good news, your advocacy can make a difference. Contact Assemblywoman Liz Ortega, Chair of the Assembly Committee on Labor and Employment and Senator Lola Smallwood-Cuevas, Chair of the Senate Labor, Public Employment and Retirement Committee.
