Labor Commissioner Cites Nail Salon $1.2 Million for Misclassification and Wage Theft of 36 Workers

The Labor Commissioner’s Office issued more than $1.2 million in wage theft citations to a Temecula nail salon for misclassifying and failing to properly pay 36 workers. An investigation found that the workers at Young’s Nail Spa were not paid an hourly rate and not paid overtime despite working up to 50 hours a week.

“Using misclassification as a business model not only denies workers of their rightful pay, but also gives the employer an unfair advantage over law-abiding businesses,” said Labor Commissioner Julie A. Su. “California law is clear that if employers pay less than the minimum wage, when they are caught they will be responsible for paying not just the wages owed, but an equivalent amount in liquidated damages plus interest.”

The Labor Commissioner’s Office launched its investigation when the Labor and Workforce Development Agency referred the case following notification of a complaint filed through the Private Attorneys General Act. Investigators audited the business records over a 40-month period and determined that 36 workers employed at the salon were paid for each salon service performed instead of the total hours worked. Shifts averaged 9.5 to 10 hours per day but workers were not properly paid for overtime, nor provided proper meal and rest breaks. Young’s Nail Spa also failed to carry valid workers’ compensation insurance coverage during the last three years.

The $1,242,227 citation amount includes $670,040 payable to workers and $572,187 in civil penalties.

Violations Include:

  • Failure to pay minimum wage;
  • Failure to pay overtime;
  • Failure to provide final paychecks as required by law;
  • Improperly paid rest periods;
  • Not providing proper itemized wage statements;
  • Meal period violations;
  • Failure to maintain valid workers’ compensation insurance;
  • Misclassifying workers as independent contractors and
  • Not providing proper itemized wage statements.

 

In 2014, Labor Commissioner Su launched the Wage Theft is a Crime multilingual public awareness campaign. The campaign defines wage theft and informs workers of their rights and the resources available to them to recover unpaid wages or report other labor law violations.

Source: CA Department of Industrial Relations  |  2018 © Copyright Payroll Masters

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