Nail salon wage payment bond cost
New York’s Department of State requires all nail salon owners in the state to file a wage payment bond. Following an investigation detailing abuse and widespread mistreatment in the industry, Governor Cuomo mandated that nail salon owners obtain wage payment bonds by October 6, 2015.
Nail salon owners employing the equivalent of 2-5 full-time individuals providing nail specialty services must file a bond of at least $25,000. Owners with 6-10 full-time employees (or equivalent) must secure a $40,000 bond. Owners with 11-25 full-time employees are required to file a $75,000 bond. Owners with more than 25 full-time employees must secure a bond of at least $125,000.
Since these are credit-based bonds, underwriters will have to review your personal credit report to determine your premium. Having your financial documents ready when you apply will help expedite the bonding process.
Why this bond
New York wage payment bonds exist to ensure nail salon owners pay their employees earned wages and provide them with due fringe benefits. As long as the employer pays his or her employees all of their due wages and benefits in full, this bond is void. However, if the owner fails to adhere to the terms of this bond, the bond is subject to valid claims filed against it.
In the event of a valid claim, the surety will cover for all damages up to the penal sum of the bond. The principal (nail salon owner) must then reimburse the surety the equivalent amount of money according to the indemnification agreement.
Become a nail salon
New nail salons and area renters must obtain a license before they can commence business operations. Anyone 18 or older can apply for an appearance enhancement business license. Proof of surety bond will be required to be approved for license. Appearance enhancement business licenses include the following information:
- Business structure (corporation, partnership, etc.)
- Applicant’s name, address, SSN or Federal Taxpayer ID
- Business name and address
Application fees are $60. Appearance enhancement business licenses remain valid for 4 years from the date of issue. Applicants are encouraged to use the NYS License Center online for applications and renewals. For more licensing information, check out the “Important Links” section below.
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