Two months ago, the entire staff of barbers walked out of Bottle & Barlow, a popular salon in Sacramento, leaving Anthony Gianotti, the owner, to tend to clients alone. This article in the Sacramento Bee sympathized with him and bemoaned the April California Supreme Court ruling that changed the definition of an entire workforce. “Giannotti’s entire seven-person staff of independent contractors quit rather than be reclassified as employees,” the Bee reported. “It’s one of the first local dominoes to fall as a result of the state Supreme Court’s decision of Dynamex Operations West Inc. v. Superior Court, which redefined who can work as an independent contractor.
“The Dynamex decision narrowed the definition of an independent contractor to those who ran their own business outside of the job they were hired for, performed work outside the usual scope of the hiring company’s main function and were ‘free from the control and direction’ of the company.”
In short, the ruling allows millions of workers — from barbers to Lyft drivers to strippers — legal protection and clout where they previously had none or were considered disposable. After all, for employers, the economic incentives to misclassify workers is colossal. For instance, if they push to classify workers as independent contractors, they’re not required to pay workers’ comp, social security, federal and state employment taxes or payroll taxes. Certain employers then have long evaded regulations governing wages, taxes, safe working conditions and other rights workers have under labor law.
Now, however, millions of workers (at least in California) are fully entitled to those rights.
Similar lawsuits have clogged the courts for decades. Before Dynamex, there was the notable 1989 “pickle farmers” (or agricultural laborers who did seasonal work) case: S.G. Borello & Sons, Inc. V Department of Industrial Relations. A group of cucumber farmers filed a complaint when their employers tried changing the title of employee to “share farmers” and pushed for independent contractor status because the employers wanted the farmers to be responsible for the entire crop of cucumbers for pickle production.
Many class-action lawsuits by exotic dancers in strip clubs also have challenged the misclassification of employment issue. Dancers have often organized and cleverly sued for back wages, winning huge settlements, but the payout doesn’t necessarily change the way the clubs do business or improve working conditions. In fact, many times, the workers are dealt the blow of being punished unfairly with even more fees and fines under new titles whispered under the breath of managers who stand by for kickbacks from the illegal tip-outs from dancers’ earnings. Essentially, club owners have enjoyed tax evasion and tip stealing for decades.
So, what now?
First, it should be noted that strip clubs owners and barbershop and salon owners share some common interests. For one: Money. Instead of paying workers minimum wage, both places charge their workers rent and don’t provide them with wages, job security, sick leave, sick pay, retirement, safe work conditions or workers’ comp. Some hair salons even garnish their workers’ tips via hierarchical commission-based models. Similarly, strip clubs are notorious for skimming dancers’ tips, coercing them with “mandatory tipping” and random fines if they show up late.
Meanwhile, the independent contractor makes what I will call “expensive money.” They’re responsible for all of their own materials and costumes, filing their taxes, starting their own business or LLC, writing off their expenses, doing their own advertising, booking their clients and providing all of their own equipment, energy, transportation and time — all to make money that’s already mostly spent.
And so, to see how the Dynamex decision would affect Gianotti’s business and the barber industry writ large — he had told the Bee, “[The decision] really gutted us. You can’t hire and structure things the way (barbershops) have for decades. They’ve just destroyed the pay structure for the barber and cosmetology industry” — I reached out to the thirtysomething salon/bar owner. But after numerous calls to the barbershop, he declined to come to the phone or comment on the law, according to his receptionist. (I also was unable to get any of his former barbers to speak to me.) I was, however, able to track down two barbers and one hairdresser in L.A.
None of them were aware of the law that changed their employee status, but they had a lot to say about the pros and cons of the business model.
DD, hairdresser: I’ve worked, by choice, for almost 40 years exclusively as a 1099 independent contractor, and it’s served me well. I’ve always been my own boss, made my own hours and paid my own taxes. I’ve never felt exploited on the job. The drawbacks to being independent contractor are the obvious things — no health benefits, no holiday pay, no sick pay, no workers’ comp, no retirement. But it’s been my choice, and the trade-off has been that I’m allowed to come and go as I please. As far as the new law that passed, let’s just say nothing has changed at my salon, and so far, I’ve been able to maintain the same status.
Barbers, hairdressers, tattooers — these are all people who like to feel free. I’m not sure if there’s a way to unionize and maintain that kind of freedom. And hey, I’m not against the idea — my grandfather was a labor organizer in New York in the 1950s. Both my parents have union gigs, and my grown son is now in a union. But the freedom is nice: I’ve had the luxury of making my own prices and doing hair for free if I feel like it. I’m not sure that would work if I was an employee. It’s a toss-up for sure. Because on the flip side, I’ve worked my entire life at the same career and don’t have much to show for it except a lot of great stories.
Jay, barber to the stars: When I first started, I couldn’t accept tips and I was an employee who got minimum wage for almost three years. Then I ran my own LLC for tax purposes. Now I have a small business. I write everything off — including parking. The great things about being an independent contractor are: I’ve worked all over the world and can go anywhere and work. The pitfalls are: If I’m not working, I’m not making money and there’s no security — they’ll just go to the next person.
Some negative things about being an employee are: The business can shut down or relocate and then you’re screwed. You also lose your independence in terms of hours and clients. You have to be available for the salon. There’s a union for hair for film and TV, but there’s no barbers union. It would be a good thing, too, because if something were to happen to you, you could get surgery and wouldn’t lose your house.
Colby, founder of a barbers collective aimed at serving at-risk youth: At my last salon, I was an independent contractor. I was fortunate that the model was that I had my own schedule and marketed myself, but I didn’t pay for products. It was included in the rent. That varies from place to place. But when it was time to pay rent, my rent went up to 60 percent because I worked an extra day. It’s generally 50/50, which is pretty common in the hair industry. The benefits of it are, if you’re not busy, it switches to hourly. So I left because of the increase and because that salon was changing to the commission model. I feel lucky because I got to take my clients with me.
At the bigger corporations like Supercuts, it totally makes sense to unionize, to fight for health care and all the benefits. They 1099 you, take part of your service and they don’t have to pay you anything, which happens left and right. This place where I cut hair now is very new. I own part of this space and am a sole proprietor. I’m still learning about all of this. My goal is to make it a nonprofit that directly serves the queer homeless population. The model is that I want to charge a percentage of paying customers money that goes to an at-risk queer youth person’s haircut, and in this way, our goal is to have it be symbiotic. I want to mentor them with education and collaborate with other beauty schools. That’s the big ambition: to provide education and career mentorship to at-risk youth. The drawbacks to that is we’re only three people, and we’re exhausted. But hopefully, we’ll create this new model and grow it.