Not allowing manicurists to be classified as independent contractors under the state’s labor law is discriminatory, a new lawsuit from a group of nail salons in Southern California alleges.

As of January, manicurists are only able to be classified as employees, which limits their freedom to run their own businesses, have their own clients, and rent space in salons, the lawsuit alleges.

California’s AB 5 essentially codified a 2018 state Supreme Court ruling that designated when workers should be classified as employees and entitled to health benefits, minimum wage and other protections through the use of a three-pronged, ABC litmus test. It once allowed all beauty professionals licensed under the California Board of Barbering and Cosmetology to be classified as independent contractors.

Related: Orange County legislator pushes to restore independent contractor status for manicurists

But the law included a provision to sunset the carveout just for manicurists in January. Exceptions for barbers, electrologists, cosmetologists and estheticians remained.

Those who want to see the exemption restored say it allows workers, particularly those in the Vietnamese community, to better “own their own businesses and service their own clients.”

According to the labor law, workers and hiring entities must meet certain criteria to be considered independent contractors. Exemptions are granted to certain industries, including app-based delivery and ride-sharing services, such as Uber and Lyft.

While manicurists’ status as employees guarantees paid sick leave, minimum wage, overtime pay and unemployment insurance, it also requires certain working hours and breaks that other licensed beauty professionals are not subjected to.

Beauty professionals classified as independent contractors work under the “booth rent” model, keeping all of their earnings and paying a set fee to the establishment’s owner to rent their space. Everything else — their working hours, prices and clientele — is decided by them.

“Their life was turned upside down overnight when their independent contractor status expired on Jan. 1, when the rest of the beauty industry remained unaffected,” Assemblymember Tri Ta, R-Westminster, said during a press conference outside the Ronald Reagan Federal Building and U.S. Courthouse in Santa Ana on Monday, June 2.

Ta said he is supportive of the nail salons’ lawsuit because manicurists were singled out from other workers in the beauty industry.

“It is not just unfair, Ta said, “it is discrimination.”

The lawsuit lists Gov. Gavin Newsom, the California Labor & Workforce Development Agency and the California Board of Barbering and Cosmetology as defendants.

Representatives for the California Labor & Workforce Development Agency and the California Board of Barbering and Cosmetology said they do not comment on pending litigation.

A spokesperson for the governor’s office declined to comment.

Newsom, when he signed AB 5 into law in 2019, said: “The hollowing out of our middle class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action. Assembly Bill 5 is an important step.”

The nail salons’ lawsuit, however, alleges de facto discrimination against the Vietnamese American community and women due to the vast majority of manicurists belonging to both groups. According to a 2024 UCLA study, more than 82% of manicurists in California are Vietnamese and 85% are women.

“The manicurist industry has been a way for Vietnamese Americans to achieve the ‘American dream’ and move into the middle class,” said Emanuel Patrascu, who works as Ta’s chief of staff. “All they’re saying is: ‘Treat us like you treat everybody else.’”

Ta — who serves California’s 70th Assembly District, which includes Orange County’s Little Saigon — introduced legislation this year that would ensure licensed manicurists could continue working as independent contractors indefinitely. The bill was sent to the Labor and Employment Committee, but no action was taken. The deadline for policy committees to hear bills in their house has since passed.

A spokesperson for Assemblymember Liz Ortega, D-Alameda, who chairs the committee, did not respond to a request for comment.

“For over four decades, the manicurists have become synonymous with the Vietnamese American community,” said attorney Scott Wellman, who represents the plaintiffs. “For over four decades, they have all worked their own business, took care of their families and flourished. And they did this by being independent contractors.”

“I always stand up for my community,” Ta said in an interview. “I always stand up for everyone in the state of California. I have been fighting for low-income families and fighting for affordability.”

Staff writers Sean Emery and Hanna Kang contributed to this report.