California sued over labor law that impacts 82% of Vietnamese nail technicians

Los Angeles, California – A coalition of Vietnamese American nail salon owners and technicians has filed a federal civil rights lawsuit challenging California’s labor laws, alleging that a 2020 statute effectively discriminates against their profession by denying them the ability to work as independent contractors. The lawsuit, filed Saturday in U.S. District Court in Santa Ana, argues that Assembly Bill 5 (AB 5) unfairly targets nail technicians, a workforce overwhelmingly made up of Vietnamese American women, while offering exemptions to other professions.

AB 5, which took effect in 2020, was crafted in response to a 2018 California Supreme Court decision that established a stricter test for determining whether workers should be classified as employees or independent contractors. The law was designed to curb the misclassification of workers who, as independent contractors, do not receive minimum wage protections, overtime pay, or other employment benefits. However, the law included carve-outs for a wide range of occupations, including physicians, attorneys, accountants, real estate agents, and hairdressers. Nail technicians, despite their longstanding use of the independent contractor model, were not among them.

The plaintiffs, which include multiple locations of Happy Nails & Spa, Holly & Hudson, and Blu Nail Bar, contend that this omission has devastated their businesses. They argue that complying with AB 5’s requirements would impose costs that small salons cannot sustain, including payroll taxes, insurance, and other employee-related obligations. The lawsuit states that the enforcement of AB 5 will force many of these businesses to shut down, resulting in job losses and financial ruin for salon owners and workers alike.

According to the suit, Vietnamese Americans make up more than 82 percent of all nail technicians in California, and 85 percent of them are women. The lawsuit positions this demographic reality as central to its claim of discrimination, arguing that the law disproportionately impacts one ethnic and gender group under the guise of labor reform. It also details the history of Vietnamese migration into the nail industry, noting that many refugees who fled Vietnam after the fall of Saigon in 1975 turned to the trade as a path toward financial stability and entrepreneurship.

The legal action brings renewed attention to the tension between worker protections and immigrant entrepreneurship. While supporters of AB 5 have pointed to cases of wage theft and exploitative conditions in salons as justification for the law, opponents argue that it applies a one-size-fits-all solution to a complex and culturally specific industry. Critics say that by excluding nail technicians from the law’s exemptions, the state has created a situation in which an overwhelmingly immigrant and female workforce is penalized for the business models that made their work viable.

Research from the UCLA Labor Center has underscored the economic precariousness within the nail salon sector. A 2023 report found that the median hourly wage for nail salon workers in California was just $10.94 in 2021, well below the state’s then-minimum wage. That study, along with previous lawsuits brought by workers against salon owners, has fueled the argument that increased regulation is necessary to protect low-wage workers from abuse. But the plaintiffs in this case argue that reform should not come at the expense of livelihoods or cultural autonomy.

The lawsuit seeks to restore the right of nail technicians to operate as independent contractors and to block the state from enforcing AB 5 in a manner that they argue violates federal anti-discrimination laws. At the same time, Republican State Assemblyman Tri Ta has introduced Assembly Bill 504, aimed at carving out an exemption for manicurists in the state’s labor code. Ta, who represents Little Saigon and surrounding areas, has said his office has received an outpouring of concern from constituents whose businesses have been upended by the law.

At its core is a fundamental question about who benefits from labor protections and who is harmed when they are implemented without regard to the particular histories and vulnerabilities of immigrant communities.