BeautyLink - Volume 10 Issue 2 - 20

LEGAL
T

ENVIRONMENT
OVERVIEW

BY EDWARD CRAMP

he last year has seen a
marked improvement in the
legal climate for our students and schools. These
developments are encouraging and also provide
some important lessons for our sector.
Let's look at two areas in particular - the
student wage class actions and federal
regulatory climate.

Student Wage Claims: Students
are Not Employees.
In 2006, a small law firm in Las Vegas
began filing class action lawsuits against
cosmetology schools around the country.
The lawsuits contended that students learning in the schools' clinics were employees
of the schools and were entitled to be paid
a wage. All told, the law firm or its affiliates
brought nearly two dozen lawsuits. Happily,
the courts have, with one exception, agreed
that students enrolled in cosmetology
school are students, not employees. That
said, schools should take away some important lessons from this experience.

The allegations in the lawsuits focused
on the fact that the schools charged a fee
for clinical services while the students
provided the "labor" to provide the service
but did not receive a wage. Students allegedly had many of the hallmarks of employees, including being closely supervised,
receiving tips, providing a compensable
service, engaging in sales, and earning
"commissions" on sales. With one exception, the schools all successfully convinced
the courts that while the students may
have many of these hallmarks, in fact the
student was the overall primary beneficiary of the clinical experience, not the
school. This led four federal Courts of
Appeal to conclude that the students were
not employees.
Even though the schools ultimately won
these cases, there were some hard fought
lessons learned. First, schools need to be
sure to tell students that they are students,
not employees. It sounds silly, but setting
that expectation up front is important
under federal wage and hour laws. Also,
schools should avoid facilitating tips to

students in the clinic. For example, schools
should not accept tips on credit cards for
students. Any tipping should be strictly
between the client and the student. Schools
should also avoid any monetary incentives
for performance in the clinic - students
should not receive commissions or monetary compensation of any kind. Instead,
schools should focus on traditional academic incentives, such as higher grades
or academic recognition. Finally, schools
should be sure that students receive
adequate supervision and feedback from
instructors on the clinic floor. That feedback should be documented and kept in
the students' academic files.
While no one factor will definitively prevent these claims in the future, in general
these suggestions should help avoid them
as much as possible.

Federal Regulatory Relief
At the federal level, recent developments have brought some encouraging
news for students and schools owners
who have seen limited school resources

IIDEA STUDIO/SHUTTERSTOCK.COM

At the federal level, recent
developments have brought some
encouraging news for students
and schools owners who have seen
limited school resources sapped by
increasing regulatory burdens.

Online
Learn
Training
More
20

Enroll in CM104 - Compliant Interactions: Acting with Integrity, to learn more about the right thing to do or say when
interacting with both prospective and enrolled students. Visit http://www.aacstraining.org/CM104 to learn more.

| B E AU TYLINK | E NLI G HTEN | 201 8


http://www.aacstraining.org/CM104

Table of Contents for the Digital Edition of BeautyLink - Volume 10 Issue 2

Introduction to AACS 2018 Partnership Program Guide
message from the AACS president and CEA chair
workings of Washington
Spring Leaders Summit/Capitol Hill Day
CEA Conference Preview
Industry Partners Going Above and Beyond
Legal Environment Update
beauty changes lives
and then there’s compliance
people & places
new products & services
associate member profiles: Enlighten
new school members
index to advertisers
advertisers.com
BeautyLink - Volume 10 Issue 2 - Intro
BeautyLink - Volume 10 Issue 2 - cover1
BeautyLink - Volume 10 Issue 2 - cover2
BeautyLink - Volume 10 Issue 2 - 3
BeautyLink - Volume 10 Issue 2 - Introduction to AACS 2018 Partnership Program Guide
BeautyLink - Volume 10 Issue 2 - 5
BeautyLink - Volume 10 Issue 2 - 6
BeautyLink - Volume 10 Issue 2 - 7
BeautyLink - Volume 10 Issue 2 - 8
BeautyLink - Volume 10 Issue 2 - 9
BeautyLink - Volume 10 Issue 2 - 10
BeautyLink - Volume 10 Issue 2 - message from the AACS president and CEA chair
BeautyLink - Volume 10 Issue 2 - 12
BeautyLink - Volume 10 Issue 2 - workings of Washington
BeautyLink - Volume 10 Issue 2 - 14
BeautyLink - Volume 10 Issue 2 - Spring Leaders Summit/Capitol Hill Day
BeautyLink - Volume 10 Issue 2 - 16
BeautyLink - Volume 10 Issue 2 - CEA Conference Preview
BeautyLink - Volume 10 Issue 2 - Industry Partners Going Above and Beyond
BeautyLink - Volume 10 Issue 2 - 19
BeautyLink - Volume 10 Issue 2 - Legal Environment Update
BeautyLink - Volume 10 Issue 2 - 21
BeautyLink - Volume 10 Issue 2 - 22
BeautyLink - Volume 10 Issue 2 - beauty changes lives
BeautyLink - Volume 10 Issue 2 - and then there’s compliance
BeautyLink - Volume 10 Issue 2 - 25
BeautyLink - Volume 10 Issue 2 - 26
BeautyLink - Volume 10 Issue 2 - people & places
BeautyLink - Volume 10 Issue 2 - 28
BeautyLink - Volume 10 Issue 2 - new products & services
BeautyLink - Volume 10 Issue 2 - associate member profiles: Enlighten
BeautyLink - Volume 10 Issue 2 - 31
BeautyLink - Volume 10 Issue 2 - new school members
BeautyLink - Volume 10 Issue 2 - index to advertisers
BeautyLink - Volume 10 Issue 2 - advertisers.com
BeautyLink - Volume 10 Issue 2 - cover3
BeautyLink - Volume 10 Issue 2 - cover4
BeautyLink - Volume 10 Issue 2 - outsert1
BeautyLink - Volume 10 Issue 2 - outsert2
BeautyLink - Volume 10 Issue 2 - outsert3
BeautyLink - Volume 10 Issue 2 - outsert4
BeautyLink - Volume 10 Issue 2 - outsert5
BeautyLink - Volume 10 Issue 2 - outsert6
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