New York Attorney General Letitia James announced that her office has recovered $300,000 in unpaid wages for workers at Envy Nails, a chain of 25 nail salons located in New York City. Between 2015 and 2021, the salons failed to pay minimum wage to more than 100 current and former employees, many of whom were vulnerable immigrant workers and workers of color. As part of the agreement with the Office of the Attorney General (OAG), Envy Nails will pay $300,000 in restitution to the salon workers, dissolve improperly registered corporate entities, and submit reports to OAG for a period of three years.
One of the 25 entities doing business as Envy Nails, Nails 181, Inc. (Nails 181), has also pleaded guilty to Grand Larceny in the Third Degree, a class D felony, for failing to pay sales tax between September 2014 and August 2019. As a condition of its sentence, New York County Supreme Court Judge Laurie Peterson ordered tax judgments against Nails 181 totaling more than $275,000 in favor of the state.
“Envy Nails did not pay minimum wage, cheating more than 100 salon workers out of the livelihoods they had rightfully earned,” said Attorney General James. “We are holding them accountable for their crimes, and New Yorkers can rest assured that we will always fight for workers’ rights. Thank you to our partners in government and advocacy for working together with my office to ensure Envy Nails pays up and makes these workers whole.”
“Wage theft undermines the basic rights of working New Yorkers,” said New York State Department of Labor Commissioner Roberta Reardon. “I thank Attorney General James and Governor Hochul for their dedication to ensuring no New Yorker is robbed of their hard-earned wages. I urge those who feel they may be a victim of wage theft to contact NYSDOL immediately.”
“The Department of State, Division of Licensing Services regularly inspects nail salons to ensure compliance with wage bond and other requirements. When violations are found, the Department takes corrective action to protect the public and nail salon workers,” said New York State Secretary of State Robert J. Rodriguez. “The Department was pleased to work with the Department of Labor and the Office of the Attorney General on this matter to hold these bad actors accountable and deter future impropriety.”
“Paying business taxes is not only critical for the overall economic health of our city and our state but is also a civic responsibility. Taxpayers deserve a fair and level playing field when it comes to taxation, and no business can be allowed to simply ignore its legal obligations,” said New York City Department of Finance Commissioner Preston Niblack. “I thank the attorney general for bringing appropriate enforcement action in this case. DOF's Tax Audit and Enforcement Unit is always ready to assist, and we will continue working together with all of our partners to ensure those committing tax theft are held accountable.”
“In 2018, our union was proud to stand with nail salon workers at Envy and work with them to file wage theft complaints,” said Julie Bracero-Kelly, General Manager, NY NJ Regional Joint Board of Workers United. “Labor violations like wage theft and employee misclassification are all too common in the nail salon industry and despite the risk of retaliation, these workers bravely stood up for their rights. The attorney general listened to them and acted to deliver justice. She has been a force for combating wage theft across the state, and we thank her and her partner agencies for investigating this case and fighting for workers who are too often left to fend for themselves.”
The settlement and criminal conviction are the result of a multiagency investigation by OAG, the New York State Department of Labor (DOL), and the New York State Department of State (DOS). The DOL referred the matter to OAG in December 2018 after DOL completed another civil enforcement action against Envy Nails. The investigation revealed that between 2015 and 2021, 25 nail salons operating as Envy Nails in the Bronx, Manhattan, and Queens systematically underpaid salon workers, in violation of New York state labor laws. During this time period, Envy Nails salons misclassified their workers as independent contractors and did not pay them required minimum wages or overtime pay.
The investigation expanded when the New York State Department of Taxation and Finance (DTF) and the New York City Department of Finance (NYCDOF) discovered that in addition to wage violations, Envy Nails underreported more than $2 million in taxable sales between September 2014 and August 2019, resulting in the underpayment of at least $90,000 in owed sales tax, as well as penalties and interest.
Attorney General James thanks DOL Commissioner Reardon and Secretary of State Rodriguez, Acting Commissioner Hiller and DTF, and Commissioner Niblack and NYCDOF for their assistance with this investigation. New York City Tax Auditor Travis Goddard and Rajeev Garg, Senior Director, NYC Department of Finance, Office of Tax Enforcement also contributed to this investigation.
Attorney General James has consistently worked to defend workers’ rights and stop wage theft. In March, Attorney General James recovered $24,000 for employees of Build With Prospect, a design-build company that stole wages from its employees. In October 2022, Attorney General James secured $90,000 in stolen and unpaid wages for more than a dozen former employees of a commercial dry cleaner in Queens. In July 2022, Attorney General James delivered $500,000 to current and former employees of a Manhattan bar for enduring sexual harassment, discrimination, and wage theft. In May 2022, Attorney General James secured more than $2.9 million for hundreds of New York City Marriott workers who were denied full severance pay. In April 2022, Attorney General James recovered $175,000 for Gotham Pizza workers who were cheated out of their pay. In September 2021, Attorney General James recovered $400,000 for Long Island laundry workers who were unlawfully fired during the pandemic. In July 2021, Attorney General James delivered $600,000 to survivors of sexual harassment and discrimination at restaurants owned by famed chef Mario Batali and Joseph Bastianich. In 2020, she secured $240,000 for 11 former employees of Kenneth Friedman-owned New York City restaurant The Spotted Pig.
This case was investigated and prosecuted by Director of the Combatting Upstate Financial Frauds Scheme Initiative, Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau (CEFC) and Criminal Labor Section Chief Jeremy Pfetsch. Analytical work was provided by Deputy Supervising Analyst Jayleen Garcia under the supervision of Supervising Analyst Paul Strocko. Forensic accounting was performed by Principal Supervising Auditor Investigator Jason Blair, under the supervision of Deputy Chief Auditor Sandy Bizzarro of the Forensic Audit Section. CEFC is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo. The Labor Bureau is led by Bureau Chief Karen Cacace and Deputy Bureau Chief Young Lee.
The criminal investigation was conducted by Detectives Steven Pratt and Angel LaPorte under the supervision of Supervising Detectives Michael Leahy and Anna Ospanova, Assistant Chief Samuel Scotellaro, and Deputy Chief Juanita Bright of the Major Investigations Unit. The Investigations Bureau is led by Chief Investigator Oliver Pu-Folkes. Both CEFC and the Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado. The Labor Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux. Both the Division for Criminal Justice and the Division for Social Justice are overseen by First Deputy Attorney General Jennifer Levy.