Dept. Of Industrial Relations Estopped From Claiming Cosmetologists Are Employees After Labor Commissioner Found Them To Be Independent Contractors.

An administrative law judge concluded cosmetologists were independent contractors, and, therefore several salons were not liable for contributions for unemployment, employment training and disability as well as personal income tax withholdings along with penalties and interest. Nonetheless the Commissioner acting through the Division of Labor Standards, an entity within the Department of Industrial Relations [Labor Code section 79,], issued citations and assessed penalties against the salons for paying their cosmetologists without giving them properly itemized pay statements. In a petition for extraordinary relief, the superior court denied relief, concluding the Division had properly issued the citations and assessed civil penalties. The appellate court reversed, stating: “We agree with Happy Nails that a final decision of the California Unemployment Insurance Appeals Board (the Board) that the cosmetologists are not employees collaterally estops the Commissioner from assessing those penalties.” Happy Nails & Spa v. Julie A. Su, as Labor Commissioner  (Cal. App. Fourth Dist., Div. 1; July 19, 2013) 217 Cal.App.4th 1459.