Salon organizations sue state

By Gabriel Rom

A lawsuit, filed in State Supreme Court in Albany by two groups representing nail salon owners, accuses Gov. Andrew Cuomo and the State of New York of a politically motivated assault against the nail salon industry.

The two petitioners in the suit are the Korean American Nail Salon Association of New York and the Chinese Nail Salon Association of East America, both of which are based in Flushing, and collectively represent thousands of nail salons throughout the state.

The suit expands and deepens criticism from state Assemblyman Ron Kim (D-Flushing) that Cuomo’s emergency legislation in the wake of a New York Times expose on the nail salon industry was hastily written and unfairly targets the Asian-American population. The suit contends that “without any independent investigation, respondents hurriedly imposed draconian emergency rules on nail salon owners in response to the Times story,” and that “the standards being used to obtain a wage bond are arbitrary and capricious.

The wage bond requirement, which requires businesses to purchase insurance for any unpaid wages, were part of a bevy of emergency regulations ordered by Gov. Mario Cuomo in the days and weeks after a New York Times article, published in May, called attention to widespread abuse in the nail salon industry.

The Cuomo administration maintains that of the 1,188 wage bond applications received by surety companies since the requirement was put into effect, only 18 have been denied.

“Of our over 100 applications, we haven’t denied anybody,” said Josh Kayser, founder and CEO of Suretybonds.com.

Kayser admitted that some of the insurance agencies on the pre-approved list of brokers and agents released by the state Department of Financial Services “may have never sold wage bonds before.”

In August, the state’s multiagency task force on nail salons inspected 182 businesses and found 901 violations. As of early this month, 43 percent of salons inspected in August had been found to not have paid minimum wage or overtime.

“What business doesn’t have a year in financials, a year in tax returns?” Kayser asked. “As an insurer, we need to know what the odds are that this person is paying proper wages or will pay proper wages. If anyone can come up with a better idea than looking at credit scores or financials, then I’m game.”

Reach reporter Gabriel Rom by e-mail at [email protected]cnglocal.com or by phone at (718) 260–4564.

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