The Connecticut Department of Labor has issued two dozen “Stop Work” orders to nail salons in the southwestern area of the state. After an investigation involving 39 nail salons, the department’s Division of Wage and Workplace Standards says the 24 affected businesses were in violation of labor laws.
Labor Commissioner Kurt Westby explained his department is now working with the salons, which are mostly in Fairfield County, to bring them into compliance with the law. The violations include misclassifying employees as independent contractors and failing to carry workers’ compensation coverage. Each salon could be fined up to $300 per employee for every day the business was not in compliance.
“We have done sweeps before, but not since 2015,” said Tom Wydra, director of the Division of Wage and Workplace Standards. “With the General Assembly in session and the topic out there, we felt it was time to do a more comprehensive sweep and see what it produced.”
Until this year, the Department of Labor argued it lacked the resources to carry out random inspections. Instead, the department relied on complaints from customers about individual businesses. During the 2015 sweep of nail salons, almost all were found to be in violation of labor laws.
In a report by Hearst Connecticut Media, employees, academics, and lawyers discussed just how widespread the violations of labor laws are in the nail salon industry. Estheticians and nail technicians are not required to receive training or be licensed in Connecticut—the only state without such requirements. Advocates for changing the law argue licensing these employees would help reduce abuses in an industry which employs many immigrants who may speak poor English and be unaware of their rights.
According to lawyer James Bhandary-Alexander of New Haven Legal Assistance, “I bring a lot of cases against employers for violating basic labor standards. Nail salons are notoriously not meeting those basic standards.”
Recently, I have reported on similar cases from across the country where business owners have misclassified workers, underreported payroll, or failed to obtain workers’ compensation insurance for their employees. In Ohio, the owner of Earth ’n Woods Products misclassified his truck drivers as office workers in order to reduce his workers’ compensation premiums. In New York, Parkside Construction allegedly underreported payroll to the tune of $42 million between 2014 and 2017 and, in so doing, avoided paying $7.8 million in workers compensation insurance.
About a dozen bills have been proposed in Connecticut since 2002 to regulate nail technicians and estheticians in the state, but almost none received a public hearing. The Department of Public Health opposes legislation, saying it does not have the resources to handle regulating the industry.
“In Connecticut, we tend to license things in a way that is punitive. We’re not interested in eliminating businesses. We’re interested in strengthening businesses,” said state Rep. Toni Walker (D-New Haven).
“Although we recognize the importance of keeping businesses open and employees on the job, our first responsibility is to ensure that workers are being paid correctly for the jobs that they do and proper protections are in place should they get injured while on the job,” countered Westby. “In promoting workplace compliance, we help create a level playing field so employers doing the right thing can remain competitive.”
Florida Workers’ Compensation Fraud Defense Attorney
If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.