On Monday, September 21, around 350 Chinese immigrant nail salon owners and a few of their workers marched into the front quad of New York City Hall, sporting identical white T-shirts that read “No Wage Bond.” During the hour-long protest, they chanted, “Wage bonds kill jobs! Stop squeezing small businesses! More support less laws!” Several local politicians stood by their side and promised to push back on new mandates regulating nail salons. Facing them were a sparse group of ethnically diverse manicurists counter-protesting in silence, holding signs that depicted the exploitative owners and harsh conditions in the nail salons they worked for.
In July, the New York State government introduced the wage bond requirements as part of an overhaul of regulations dealing with nail salons. The goal was to guarantee compensation for workers in cases of wage theft and other related violations. In protest of this new mandate that many Chinese nail salon owners deemed “excessive” and “burdensome,” they went on a one-day strike in August. The strike caught on with nail salons all along the East Coast. The City Hall protest marked the first of their many public demonstrations against these requirements. Since then, opposing voices on the new wage bond mandate have continued to arise from different angles of the heated debate.
Sze Tsang Cheng, 30, stood among the protesters at City Hall. Now a nail salon owner in the Bronx, she began her career in the nail salon industry as a teenager, rinsing customers’ feet as a manicurist’s assistant in Queens.
Born in Fuzhou, China and raised in Hong Kong, Cheng moved to the New York with her family at the age of 12. She stumbled into the nail salon industry after dropping out of high school, only to find that it was equally difficult, if not more so, to master manicures and pedicures than her schoolwork. It wasn’t long until she discovered her true passion in nail art designs. As she spent several years learning from experts in the field and refining her skills, her lack of ability to communicate with clients in English frustrated her. This realization motivated Cheng to enroll in LaGuardia Community College, where she completed her GED and obtained a college degree soon after.
For almost a year now, Cheng has run Amber Nail and Spa in Pelham Bay, the Bronx, where she personally trains her employees, performs nail artwork on customers who have trusted their hands to hers for years, and mends their chipped nail polish at no cost as part of her follow-up services. The New York State government’s latest regulation enforcement, especially the wage bond requirements, has shackled her dreams to expand her business by hiring more manicurists.
The mandatory wage bond coverage amount ranges from $25,000 to $125,000, depending on the number of employees and total labor hours in each nail salon. While owners don’t pay the full amounts, they apply through surety companies authorized by the state government, which determine whether they are eligible to purchase a wage bond and calculate their premium amounts based on their credit scores.
Cheng explained her difficulties with this new mandate.
“I have to pay several thousand for the wage bond because my credit score is not that great. It was fine in the past. But recently it’s decreased a bit because of some loans,” she said in Mandarin. “After I finish paying all the insurance fees and taxes, right now I have to pay over $4000 for the wage bond. I really can’t afford it.”
Nor is Cheng alone in her concerns. Another nail salon owner hailing from the Bronx, who prefers to be called by his American name John Zhang, as opposed to his Chinese name, lamented that the new wage requirements might cost him “absolutely everything.”
Zhang left his native Liaoning province, in northern China, two decades ago, to embark on a new life in the United States. He washed dishes, sewed clothing and lifted heavy boxes of deliveries, just as many other newly arrived Chinese immigrants in Manhattan’s Chinatown did in the mid-’90s. In 1998, Zhang bought a small commercial space on White Plains Road in Pelham Parkway, Bronx, where he’s run a nail salon named New Wong Nail Supplies. It has remained the main source of his household income ever since.
Days before he was to open a massage studio in September a few stores down the same block, Zhang had to put the plan on hold because of the financial uncertainties that now come with the wage bond requirements.
“The issue is not how much the wage bond costs, but rather the aftermath of any dispute that may arise,” he explained in Mandarin. “In that case, the surety company will lend us money and ask us to pay back with interest. We might wind up going bankrupt and owe the surety company an enormous amount of money.”
The nail salon industry, in which Cheng, Zhang and many others have lived and breathed for years, has come under fire after Sarah Maslin Nir of the New York Times shocked the nation with a two-part exposé in May. According to Nir, some manicurists were reportedly underpaid and sometimes even unpaid, humiliated and even physically abused, in addition to being exposed to poisonous work environment that could lead to serious health issues.
Aisha Lewis-McCoy, 33, an attorney working in New York, served as a part-time manager of Lee’s Nail & Day Spa in suburban Washington D.C. back in 2007.
Offering an array of services including manicure and pedicure, hairstyling, massages and facial treatment, this salon complex was essentially a monopoly in the area, which allowed its manicurists to earn more money by developing direct relationships with customers and brokering their own services. Every worker there, of either African or Vietnamese descent, had the flexibility to take a 30-minute lunch break each day anytime between two shifts.
Despite the advantages and benefits this “upscale” salon complex provided its employees, she observed many issues in its day-to-day operation.
“At the end of the week, they had to turn over an envelope of tips from half of what they made. The owner would come at the end of the week. She would just pick up her envelope,” Lewis-McCoy said.
She added that, in the absence of a payroll system, the owner told every employee, including herself, to file taxes and report incomes individually. It was also extremely difficult for workers to take a leave outside their fixed days off, because the owner expected them to be available for appointments no matter what went on in their lives.
Instances like these, and many more brought to light by Nir’s investigation, have led to an overhaul of the nail salon industry. In July, New York State Governor Andrew Cuomo announced a multi-agency task force to reform the nail salon industry, gathering resources from the state Departments of Labor, State and Health to implement a comprehensive list of new regulations. The wage bond requirements play a key role in the industry crackdown.
In 2011, the non-profit advocacy organization the National Employment Law Project published Winning Wage Justice: An Advocate’s Guide to State and City Policies to Fight Wage Theft, which outlines benefits of the wage bond model: “Bonds are most useful for workers employed in industries that are typically undercapitalized or heavily subcontracted such as agriculture, garment, construction and janitorial work.”
Luis Gomez, the Organizing Director at Workers United New York/New Jersey Joint Board, drew on this publication and said wage bonds have been effective in protecting workers’ wages in other industries where workers are at risk of wage theft in at least 38 U.S. states.
However, not even all the employees are in favor.
52-year-old Lusen Chen has been working in the nail salon industry for 17 years. He left home in Fuzhou, China in his early twenties in search of “a better life abroad.” In 1988, he arrived in the United States on an ocean liner from Japan without a legal status to stay. Like Zhang, he tried his hand at many different kinds of work in order to make a living; and like Cheng, he eventually discovered his talent and interest in working as a manicurist.
He shared his thoughts on the new mandate.
“I think the state government’s new wage bond requirements are unreasonable,” he said in Mandarin. “As a nail salon worker for over a decade, I really want to urge the New York State government to come up with a policy that will protect both the workers and the nail salon owners, so that this industry can survive in the future.”
Many politicians have spoken against the wage bond requirements as well.
New York City Council Member David G Greenfield addressed the crowd during the City Hall protest, saying, “It’s unfair that because there may be a handful of people who are breaking the rules to try to put everybody out of business. And that’s what this is about. We’re going to support you because we can go after the few people who are bad, without putting the good people out of business.”
New York State Assemblyman Jose Rivera said in an exclusive interview shortly after the protest, “I am willing to say to Andrew Cuomo, we have a bad habit — we love to regulate blindly, we don’t talk to people, we don’t listen to people, then we regulate them out of business. That’s not fair.”
Alison Park, a former employee of Workers United New York/New Jersey Joint Board, said it is “laughable” to predict a successful outlook for the wage bond requirements in the nail salon industry based on their effectiveness in the carwash and development industries.
“The overall costs of those businesses are astronomical compared to nail salons,” she said.
Gomez, the Organizing Director of the union, expressed surprise at Park’s comments.
Despite the problems Attorney Lewis-McCoy witnessed in that suburban Washington D.C. nail salon, she doesn’t think the wage bond model is going to work, either.
“At the end of the day, New Yorkers will constantly look for cheaper and cheaper places to get their nails done,” Lewis-McCoy said, “So I worry about a black market being birthed out of this, since it looks like only the salons that charge the most will be able to actually continue staying in business.”
On Friday, October 2, a New York State judge rejected a motion to block the wage bond requirements, put forth by the Chinese Nail Salon Association of East America and the Korean American Nail Salon Association of New York. Although the deadline to complete the wage bond premium payments passed on October 6, these two trade organizations said they would continue to fight this mandate. In the meantime, coalitions of health advocates and labor unions are continuing to push stricter regulations and organize the workers of this contested industry.
– By Qingqing (Hilary) He