Licensed manicurists across California are beginning to panic. Their status as independent contractors changed on January 1, 2025. There has been little to no guidance from the State or from the Industrial Welfare Commission as to how manicurists and salons can comply with certain changing laws. The statute itself provides little to no guidance to the actual individuals and businesses that are required to comply, thereby creating some anxiety, if not outright panic at the nail salon.
Nail enthusiasts know that finding the right manicurist is priceless. For those reading not familiar with the nuances of the nail technician-client-relationship, (which I strongly believe should be subject to the same confidentiality privileges that clients enjoy with their attorneys), there are two main types of nail salon. The first is a nail salon where the manicurists are under the control of the manager of the salon. They have standard working hours, use the supplies of the salon, do not have control over their own clients, and do not accept payment from clients. The client either walks in, or schedules an appointment with the salon directly, rather than with a specific manicurist. The client pays the salon directly and the manicurists are paid an hourly wage, regardless of how many clients they see per day. Presumably, the majority, if not all the salon’s income comes directly from the clients.
In the second type of salon, the manicurist rents a chair at a salon, maintains their own schedule and book of clients. The clients schedule directly with the manicurist, subject to the manicurist’s availability, not the salon’s hours. The manicurist purchases and uses their own supplies and accepts payment directly from the client. The manicurist is not paid by the salon, but instead pays the salon rent for the chair. The salon does not control the manicurist’s job duties in any capacity whatsoever. Presumably, none of the salon’s income comes from the clients, but from the rental revenue.
After the adoption of AB5 on September 18, 2019, there was endless confusion and outrage among the professional services industry, including manicurists, regarding their status as employees or independent contractors. There were some exemptions for certain industries, including manicurists. However, the exception for manicurists specifically expired on January 1, 2025.
Because of the confusion surrounding the statute’s construction, many manicurists (and salon owners) believe that beginning January 1, 2025, all manicurists will automatically become employees, with no exceptions. There has been much discussion in the industry suggesting that the only solution is to turn manicurists into salon owners, salon partners, or LLCs in order to maintain their independent contractor status. Those are complicated options that may not solve the problem.
Some manicurists may still qualify as independent contractors under California law, if they can satisfy all three factors listed in AB5, regardless of the expiration of the exemption. AB5 states that every person is an employee by default unless:
- the person is free from the control and direction of the hiring entity in connection with the performance of the work;
- the person performs work that is outside the usual course of the hiring entity’s business; and
- the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Clearly, manicurists who receive hourly wages from the salon and do not have control over their book of clients, hours, or supplies will be considered employees and will be subject to all the privileges of employment, such as minimum wages, meal and rest breaks, overtime, wages statements, workers comp insurance, and more.
However, manicurists who rent their booth directly from the salon may satisfy all three factors of AB5. Factors one and three are easily satisfied, even without making the manicurists a partial owner in the salon. The question becomes, does the manicurist perform work that is outside the usual course of the hiring entity’s business? Well, if the hiring entity does not take any payment or portion of payment from clients, the hiring entity (the salon) is not in the business of manicures, they are in the business of chair rentals (like a landlord). The manicurist is a separate business entity renting a space from another business. There is a strong argument to be made that this type of relationship satisfies factor two. Only this type of licensed manicurist may be classified as an independent contractor. Of course, this theory is untested as the law is relatively new, but hopefully assuages some panic among manicurists and salon owners who currently operate a booth rental relationship.
The information in this article is provided for informational purposes only and is not legal advice. This article does not create an attorney-client relationship.