1. Labor Commissioner's Office

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Licensed Manicurists Frequently Asked Questions:

1. Who is a W-2 employee and who is a 1099 independent contractor in California?

In California, workers are assumed to be employees who are entitled to certain rights such as minimum wage and overtime pay, sick leave, required meal breaks, and workers’ compensation for on-the-job injuries. Independent contractors have fewer protections.

Being told that you are an “independent contractor” by your employer, or being given an IRS Form 1099 instead of the Form W-2 is not what determines employment status. California law is what determines whether you are a W-2 employee or 1099 independent contractor.

2. How to determine if a licensed manicurists is an independent contractor or employee?

Under California law (Labor Code sec. 2778(b)(2)(L)),  a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist can be treated as an independent contractor if the business owner can show ALL of the following apply to the licensee:

(i) Sets their own rates, processes their own payments, and is paid directly by clients.
(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.
(iii) Has their own client list and schedules their own appointments.
(iv) Maintains their own business license for the services offered to clients.
(v) If the individual is performing services at the shop of the business owner, then the individual issues a Form 1099 to the salon or business owner from whom they rent their business space.

An example is Ann Nguyen who provides nail services at Pink Nail Salon:

1) Ms. Nguyen comes into the salon only twice a week, as she prefers,  between 12-4 pm to provide manicure and pedicure services that she schedules.
2) She has decided to charge her clients $75 for a pedicure or a traditional manicure.
3) After each appointment, she receives and processes their payments directly.
4) She has a business license from her county.
5) She issues a 1099 to the business owner for the rent she is paying for her space in the salon.

3. What changed January 1, 2025 for licensed manicurists?

However, beginning January 1, 2025, the above exception will no longer apply to licensed manicurists. Instead, what’s called the ABC test (Labor Code sec. 2775(b)(1)), will apply to manicurists, 
According to the ABC test, manicurists working at a nail salon will be presumably an employee, unless the employer can prove ALL of the following are true:

A. The worker is free from the control and direction of the business owner in connection with the performance of the work;
B. The work provided is outside the usual course of the hiring business owner;
C. The worker is customarily engaged in an independently established trade, occupation, or business of the same type as that involved in the work performed.

For example, beginning January 1, 2025, if you are a licensed manicurist, and you provide manicure services at the Pink Nail Salon, you are an employee, and must receive all the rights and protections of that employment status including minimum wage, sick pay, meal and rest breaks, overtime pay and workers compensation insurance coverage.

November 2024