Ethical Beauty, Part 1: Employment Practices

When I started on this journey, I was so naïve. I had no idea the beauty industry was riddled with illegal employment practices and horrific shortcuts that put people’s health at risk. Boy, have I learned a lot. 

It started in 2015. Shortly after we opened, the New York Times did an expose on illegal employment practices – I would encourage everyone to read it. The article exposes how manicurists are exploited and underpaid, in the most horrific ways. I was shocked when I read it. I had no idea this was going on. We had just opened and I started by classifying everyone as employees and making sure they were paid according to US Labor Laws. I had come from running an ad agency, and didn’t even think about it being an option to do things another way.

I was curious if this was happening in Austin, but what I found happening in our community was a little more subtle – employers were mostly illegally misclassifying their staff as independent contractors so they could avoid paying their share of employer taxes (companies pay zero employer taxes if they classify workers as independent contractors). The first year we were in business, we paid about $70,000 in employer taxes. We weren’t profitable that year, but we sure would have been if I didn’t have to pay those taxes. 

I figured there had to be a way to be profitable and do things legally, so I persisted. We had to adjust our pricing and find efficiencies, but we did it.  And when the US Department of Labor came to the salon one day and told us we were being audited, I was actually excited. I eagerly provided all of the documentation he asked for: timesheets, payroll records, list of employees – anything he wanted, I provided. And we passed the audit with flying colors – he couldn’t find anything we were doing wrong. And believe me, he tried. The whole process took a few months, with a lot of requests for information. When it was over, I was so proud and wore that audit like a badge of honor.

Throughout the years, I’ve interviewed a lot of nail techs who preferred to be paid as independent contractors, not realizing that they were actually paying more taxes because of it and missing out on benefits like unemployment insurance. I think that became more understood when COVID happened – our staff were immediately able to get unemployment because we paid into the system and they were actual employees, not independent contractors. We watched a lot of our independent contractor friends have to wait months to get assistance. Our staff got their first unemployment checks around the time they would have been paid on our normal payroll schedule. It was such a relief for me, and a scary time. 

Still, many aren’t aware of the common practice of illegally classifying staff as independent contractors (and believe me they will justify it a thousand ways but reality is there is almost no circumstance it’s actually legal in a nail salon setting). So what can you do? Look for a salon that tells you they are ethical and what their employment practices are. Because trust me, if you are doing things legally and ethically, you want people to know about it because it is not easy to run a profitable nail salon and also be on the up & up.