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In 2015, a wage bond was mandated for New York nail salons. The bond mandate came following the publication of a two-part expos� in the New York Times alleging that “manicurists [were] routinely underpaid and exploited, and endure[d] ethnic bias and other abuse.” The piece caused enough of a stir that state and city government noticed, and Governor Cuomo quickly issued the wage bond mandate with an October 6, 2015 deadline. Keep reading for the rundown on the New York nail salon wage bond.
Why was the wage bond mandated for nail salons?
The two�New York Times articles detailed Sarah Maslin Nir’s interviews with nail salon employees in New York City, and she claimed that many were paid below minimum wage and suffered various abuses at the hands of salon owners. The article also said that labor violations in the industry went largely unchecked, and workers were being exposed to harsh working conditions that had caused health problems for many of them.
Another assertion made in Nir’s expos� was that salon owners were exploiting immigrants who spoke little English and were often in the country illegally. Because of this, salon owners could get away with unsafe working conditions, underpaying or not paying workers at all, and charging them training fees.
The backlash from the articles resulted in Governor Cuomo quickly taking action to instate a wage bond and a workers’ bill of rights, along with offering free training for unlicensed New York nail salon employees. Cuomo began a public awareness campaign and distributed pocket cards to involve consumers in worker protections. In addition, legislation requiring nail salon owners to provide equipment to protect employees from harsh chemicals was passed.
What does the wage bond do?
The mandated wage bond is a salon owner’s guarantee that employees will be paid fairly and in accordance with New York law, including being paid overtime and any fringe benefits they are entitled to. If employers do not pay employees the wages they are owed, employees can file a claim against the surety bond to recoup lost wages. Failing to comply with the wage bond requirement can result in loss of business licensure and fines.
Who needs this bond and how much does it cost?
Any New York nail salon that employs two or more licensed full-time employees must purchase wage bond. The amount of surety bond coverage depends on the number of full-time employees or the equivalent (two part-time employees equal one full-time employee):
- Two to five licensed full-time employees�$25,000 surety bond
- Six to ten licensed full-time employees�$40,000 surety bond
- 11 to 25 licensed full-time employees�$75,000 surety bond
- 26 or more licensed full-time employees�$125,000 surety bond
The surety bond must be displayed and visible in the salon.�New York nail salons must also obtain accident and professional liability or general liability insurance with coverage of $25,000 per individual occurrence and $75,000 in the aggregate.
The cost of the surety bond is determined on a case-by-case basis, but applicants with good credit history should expect to pay anywhere from 1-10% of the bond’s coverage amount. For example, a $40,000 surety bond’s premium might range from $400-$4,000.
Ready to get this New York surety bond? Get in touch with Single Source Insurance to get a quote!