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DOL Launches Employee Misclassification Initiative in Seattle-based Nail Salons

March 12, 2012

The U.S. Department of Labor's (DOL) Wage and Hour Division (WHD) has recently launched an employee misclassification enforcement initiative, focusing on nail salon employees in Seattle who have been misclassified as independent contractors.

Our Costa Mesa, California-based labor and employment attorney Vincent Howard regularly reports on the alarming trend of employee misclassification in the U.S. workplace, especially in industries that employee low-wage workers who are vulnerable to wage and hour violations and wage exploitation.

Vincent Howard has been following the news of the DOL initiative, and the WHD's efforts to protect these vulnerable workers from the chronic violations of the Fair Labor Standards Act's (FLSA) overtime pay and minimum wage compensation provisions.

According to the DOL, employee misclassification is a common violation found in the nail salon industry in this country, which occurs when employers misclassify workers as independent contractors, or "booth renters" as opposed to regular employees. When employers misclassify workers, they fail to pay proper overtime compensation, fail to keep current and accurate compensation records for all hours worked, as well as for duties performed before and after their shifts begin, and break the law by taking deductions for employee uniforms, equipment rental, or other workplace items that lower the employee compensation rate to below the minimum wage level, or cut into the full wages that an employee is due in week of overtime.

Under the DOL initiative, the WHD will reportedly conduct unannounced investigations within nail salons throughout the city. The Washington State Department of Licensing reports that there are currently 24,898 active licensed manicurists in the state, and when violations of the FLSA minimum wage and overtime provisions are found, employers will pay back wages and will be penalized. The DOL reports that over the past two years, the WHD has collected over $699,000 in back wages for employees in the nail, hair and skin care industries across the country.

According to the Wage and Hour Division, many of these nail salon employees are immigrants, who are especially vulnerable to wage theft or wage exploitation. This initiative has been implemented to ensure that nail salons properly classify each worker and compensate them with proper wages and overtime compensation--instead of shirking their wage and hour responsibilities and willfully misclassifying workers in order to gain an unfair advantage in the marketplace.

Last year, the WHD signed a memorandum of understanding with the Washington State Department of Labor and Industries, in order to fight the illegal practice of employee misclassification, to protect workers and law-abiding employers, and to prevent losses to the state workers' compensation and unemployment insurance programs.

As Vincent Howard reported in a recent Orange County wage and hour lawsuit blog, the DOL also partnered with the IRS last year in the fight against employee misclassification, in order to share information when illegal misclassification is found--which will protect law-abiding employers and workers as well as taxpayers, as recent estimates show that local, state, and federal governments lose billions of dollars every year in uncollected tax revenue from employee misclassification.

If you have experienced employee misclassification in your Orange County or Southern California workplace, contact Howard Law, PC today for a complimentary consultation about your wage and hour rights.

U.S. Labor Department's Wage and Hour Division launches enforcement initiative to combat labor law violations at Seattle-area nail salons, The U.S. Department of Labor Press Release, February 15, 2012

Related Web Resources:

The Department of Fair Employment and Housing (DFEH)

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

Related Blog Posts:

Mexican Restaurant Pays Over $74K in Back Wages for Employee Misclassification, California Employment Lawyers Blog, March 6, 2012

Restaurant Pays $83K in Back Wages for Overtime, Minimum Wage Violations of FLSA, California Employment Lawyers Blog, November 17, 2011

Tennessee Restaurants To Pay Overtime Back Wages for Willful and Repeated FLSA Violations, California Employment Lawyer Blog, November 11, 2011

DOL Continues to Track Down Federal Wage and Hour Law Violations in the Workplace, California Employment Lawyers Blog, September 8, 2011

Taqueria Restaurant to Pay Workers Nearly $250K in Overtime Back Pay and Minimum Wages, California Employment Lawyers Blog, June 15, 2011

Feds Crack Down on Wage and Hour Violations in NY Restaurants, California Employment Lawyers Blog, April 15, 2011

DOL Wage and Hour Division Audits for Low Wage Industry Violations, California Employment Lawyers Blog, July 20, 2010

New Study Reveals More Abuse of Low-wage Workers in Los Angeles, California Employment Lawyers Blog, January 11, 2010