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Legally Sound | Smart Business


The Podcast Where Nasir Pasha and Matt Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to

Nasir and Matt discuss the investigative report concerning nail salons andthe abusivetreatmentthat many workers are experiencing.

Full Podcast Transcript

NASIR: All right. Welcome to our podcast where we cover business in the news and we also add our legal twist to that business news. My name’s Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: And we are two lawyers that have nothing better to do than talk about business and the law. I love it.

MATT: You don’t see many lawyers with podcasts, I’ll say that.

NASIR: You know, I was thinking, we’ve been doing this for a year – like, more than a year now, I think, right? We missed our anniversary.

MATT: We’re closer to two years than one.

NASIR: Oh, that’s true because we started in December 2013?

MATT: I think it was at least October.

NASIR: Oh, really? Okay. Then you’re right. You’re right. But, I don’t know, it’s fun.

MATT: Possibly even before that.

NASIR: Our listenership is much more than it used to be. I mean, it took a while to get where we are but that’s fun – fun stuff.

MATT: Neither one of us is a celebrity so putting something out there is not going to…

NASIR: Neither one of us is a celebrity but, collectively, if you add our celebrity status, you know, collectively, I think collectively we’re a celebrity.

MATT: There’s a score for that. Everyone’s assigned a score based on your notoriety or presence as a celebrity and it has to do with online. It starts with a “K” I think.

NASIR: Is it Q score?

MATT: Yes.

NASIR: The recognized industry standard for measuring consumer appeal of personalities, characters, licensed properties, programs and brands. Man, I need a Q score.

MATT: Yeah.

NASIR: Let’s figure out how we can do it. Nasir Pasha…

MATT: This is our whole episode of you trying to come into the ultimate conclusion we have low Q scores.

NASIR: It says we don’t have any data for me. They just need to update it. Obviously, this is way behind.

MATT: All right. Well, we’re going to talk about a few things, one of which really is I say it comes as no surprise but maybe that’s just because we’re more familiar with it than other people but there was a recent piece that came out in the New York Times that did – I don’t know if it was an investigative search but – a detailed story on nail salons and just the abuse that these workers are getting and their treatment at these nail salons. It kind of details all the things that have gone on or that are going on in New York and it’s kind of crazy. Like I said, I mean, you and I were familiar with these things, but even reading through some of these findings, it’s still pretty insane.

NASIR: Wait. Wait. How was I familiar with nail salons again? I know you were but…

MATT: I thought, well, I don’t know. I guess maybe it was just me.

NASIR: I just know everything because of what you tell me in your experiences.

MATT: I don’t think I’ve actually ever been to one.

NASIR: You just have them come to your house or something?

MATT: Not quite but never had any work done on the nails.

NASIR: Well, the bottom line in very New York Times-like fashion, they do go into pretty good detail. They talk about even just how many manicure places there are, particularly in New York City. If you compare it to cities like Chicago, Los Angeles, and Boston, of the maps that I’m looking at, and just the concentration in New York City is just a little bit different and it’s because of the cultural association with the Vietnamese nail salons and I think that has a lot to do with it.

MATT: Well, yeah, I mean, in this story here, they even talk about a cultural hierarchy or a racial hierarchy. A lot of these shops are owned by Koreans.

NASIR: Okay.

MATT: This is the racial hierarchy as is described – Korean, China, and then non-Asian. That’s kind of the hierarchy of these places and I guess that it is what it is and I’m not surprised there’s any sort of racial discrimination going on just based on the other things that have happened. But, you know, because this is in New York or New York City, you know, some of the things that you would think would be violations aren’t necessarily violations.

NASIR: Yeah.

MATT: We have to think about the fact that these people might not be classified correctly as I assume these are all people that are not being paid as employees.

NASIR: Yeah, and maybe they should.

MATT: Yeah.

NASIR: I don’t know. But assuming they are an employee for sake of discussion, you know…

MATT: Yeah. Let’s see. Let me go through a couple of these. There’s actually a buy-in.

NASIR: If there’s a buy-in, then they’re probably trying to be classified as contractors there.

MATT: Yeah, even though it says “take on a new employee.” There’s a little bit of ambiguity on how they’re classified but let’s just take it for what it’s worth. A buy-in to start working, it’s not uncommon that they’ll start working and not get paid for a while. Some of them don’t even receive minimum wage because they’re pad off of tips or paid off of commissions. If people don’t show up, they don’t get paid and the workers are just sitting there.

NASIR: The biggest thing is these allegations of wage theft and charging them a fee for drinking water at the location reminds me of the show Better Call Saul where his law office is in the back of a nail salon and he gets yelled at for taking some of the cucumber water.

MATT: Pretty crazy. They’re charged to drink the salon’s water. That’s basically like sweatshops-type treatment. Here’s the thing too with these places. I think water is pretty crucial because there’s a lot of fumes involved with these nail polish and all this stuff they’re doing to the nails and all that stuff.

NASIR: Oh, that’s true.

MATT: I mean, I would think that they need to be properly hydrated in order to not have everything go to their head and pass out or get dizzy from all the fumes. Like I said, I’ve never really been to one so I can’t really say.

NASIR: To be frank, I can’t stand the smell even walking by one. I mean, they seem so strong, I don’t know how people actually work inside of those things. It can’t be good for you. It seems like a lot of these ones in New York in particular do happen to be Korean-owned. You know, I think I said Vietnamese earlier and that’s because, of course, I believe it’s well-known that a lot of these nail salons are Vietnamese. In fact, my brother-in-law sent me an article kind of explaining the reason and possibly the theory why there are so m any Vietnamese nail salons was because the main actress in Alfred Hitchcock’s The Birds actually went over to Vietnam, met some refugees there, and wanted to help them out and they were fascinated by her nails and somehow she put together a beautician to come over there and train twenty or so Vietnamese to do manicures and it kind of just ballooned from there culturally. And so, I can imagine where you have a cultural industry. You know, there’s industry standards within a business. I mean, take any even, like, the plumbing business locally, there’s just certain things, how the business is run, and that’ll happen a lot with this as well. But, if you are working with personnel that are maybe immigrants or non-educated or uncomfortable in their current environment and ignorant to the laws, they are ones that can easily be taken advantage of and it sounds like that’s what’s going on here because how are people supposed to know what’s going on unless some New York Times article comes out and kind of exposes it.

MATT: I mean, it’s pretty crazy that what’s in the story is accurate. If that was the case, then that’s kind of started everything and it just continued on and grew.

NASIR: But I find it interesting, how does that relate to expanding to Korean-owned and Chinese-owned nail salons, too? I don’t know. Maybe the Korean War? I think it’s a stretch. I don’t know.

MATT: And this is the reason I said that you had familiarity with it and I know you’re just trying to push things on me like I attend these nail salons frequently but, I mean, I think we’ve spoken to – or at least I have spoken to – people that are involved in nail salons and maybe trying to figure out the legal side of it because the ones I’ve talked to – I won’t name any names – they’ve classified everyone as independent contractors and so they can kind of just do, you know, they think they can just do whatever they want in that sense but, I mean, there’s definitely a strong case to be made that the people that are working there are employees so that’s an issue in and of itself. But just the actual treatment of the people there – whether they’re employees or independent contractors – I mean, that’s a whole other level. There’s still a decency owed to these workers.

NASIR: I think, you know, as consumers, for example, when you go to a nail salon, Matt, I think one of the first things that you should be looking out for, if they’re being classified as independent contractors – not that you would know from necessarily outside – that is the number one way that they’re going to be able to (1) pay them below minimum wage, (2) have them work without lunch breaks, without this and that. That’s how they get around these protections because, obviously, we’ve talked about this many times in the past. You know, employees are granted these protections and they’re doing it for a reason because the employer has such control over the employees and, in hair salons, nail salons are very typical to having these kinds of independent contractor relationships or trying to fit them in this mold. You know, we talk to employers all the time that want to try to move their work force to independent contractor status or remain in that status legally and there is, a lot of times, a huge advantages of doing so. But you have to really weight that risk to see if that’s what you really want to do, number one. But, also, number two is that, from an ethical perspective, does it also make sense for you to do so? It’s bigger than law in this case, I think, especially even if these nail salons – or what are they called? Nail manicurists or something to that effect.

MATT: That’s what they’re called in the piece.

NASIR: Let’s say they can be classified as independent contractors, it doesn’t seem right, especially when you have other Vietnamese manicurists that are – I think this article in particular says – they were getting paid how much per week? While the trade has helped many secure a stable living in the United States, manicurists earn about $645 per week in 2014, according to Nails. The industry also supports a vast network of technicians who send money to family members back in Vietnam.

MATT: It’s pretty clear that these shop owners are exerting a fair amount of control over the people that are working there which would tend to show that they’re employees but I don’t know. I think it’s pretty clear that the workers aren’t kind of free to do things as they choose. I think they’re told exactly what to do, when to show up. You know, there are a couple of things that, you know, show that they could be independent contractors in treatment, forcing them to pay money to teach them new skills but, I mean, I would say this is pretty easily an employee relationship.

NASIR: And even though this is not a factor of the employee independent contractor relationship, if the contractor or so-called contractor is still making below minimum wage, that’s usually a red flag because why would that person form such a relationship if that’s what they’re getting paid? Usually, in fact, a lot of times, people find that employees want to be paid as a contractor because, you know, the taxes aren’t deducted and there’s flexibility and so forth. As an example, $645 per week, if that’s what other manicurists are being paid, I mean, that’s much more than minimum wage. I mean, that’s probably almost about double, right?

MATT: $645 a week? I mean 40 at $10 would be, what, $400?

NASIR: About $16 – maybe not in California but the federal minimum wage, it would be just about double, almost.

MATT: Well, sad start to the week.

NASIR: Very bad start, it’s depressing. I would just everyone quit their jobs and stop working.

MATT: Well, I mean, I think that’s the thing. They talk in the article too about the English-speaking skills of a lot of these workers isn’t the best. If that’s the case, I mean, it might have been the US isn’t very open to people that don’t speak English, especially on the employment front, so there’s only so many jobs that you can take if you don’t speak English.

NASIR: That’s true, and a nail salon, I don’t know how many people expect their manicurist to, I don’t know, maybe I’ve seen too many TV shows like Seinfeld of Elaine going into a Korean nail salon.

MATT: I forgot about that. She brings George’s dad in.

NASIR: Yeah, it’s the old one because they’re all speaking Korean, I think, and she gets upset because she thinks that they’re speaking about her and apparently they were.

MATT: Yeah.

NASIR: But my point is that I’m not sure if there’s an expectation. Like, there might be even a strange thought – it may or may not be accurate – but people may generalize that they would rather go into a nail salon that has people that don’t speak English because maybe they produce better manicures for some reason, you know?

MATT: If you walk by one or if you look at the photos in this article, every person just sitting – well, obviously, if they’re working on their hands it’s different – but everyone’s just sitting there. The customers are sitting there on their phones – like, not saying anything. I don’t think, like, there’s no language barrier if you’re not even speaking to the person.

NASIR: That’s true. Well, I don’t know. Who knows what we know or what’s going on the salons?

MATT: It’s probably the appropriate time for you tell people of your eight-week investigative thing you have lined up to go to nail salons.

NASIR: Undercover. Okay. Well, thanks for joining us everyone on our nail salon special. If you reference our podcast, you’ll get 50 percent off your next manicure at participating locations.

MATT: Up to you to figure out which ones.

NASIR: Yeah. All right. Have a good one, everyone.

MATT: Keep it sound and keep it smart.

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A podcast covering business in the news with a legal twist by Pasha Law PC
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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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