Several Vietnamese American-owned nail salons in Orange County have sued California, alleging the state's labor code is discriminating against their businesses.

The lawsuit, filed in U.S. District Court in Santa Ana on Friday, alleges that the state's labor code violates the 14th Amendment's guarantee of equal protection under the law by forcing nail technicians to be classified as employees.

The suit argues that professionals in the beauty industry for years have operated as independent contractors, renting space in a salon and bringing in their own clients. That changed at the beginning of 2025, when nail technicians in the labor code became required to be classified as employees, the lawsuit said.

California Assemblyman Tri Ta (R-Westminster), who represents Little Saigon and surrounding communities, said his office has fielded much concern from Vietnamese American nail salon owners.

"Their lives have turned upside down overnight," Ta said at a news conference Monday morning. "It is not just unfair, it is discrimination."

The switch in labor law came back in 2019, when a sweeping law governing worker classification rules across various industries called Assembly Bill 5 was approved — a law that codified a California Supreme Court decision creating a stricter test to judge whether a worker should be considered an employee rather than an independent contractor.

AB 5 sought to crack down on industries where many workers are misclassified as independent contractors, who are not afforded protections including minimum wage, overtime pay and workers' compensation that employees have access to. But various industries have said AB 5 targets them unfairly, creating an uneven playing field for businesses.

Some professions received carve-outs, including doctors, accountants, real estate agents and hairdressers; while others such as truckers, commercial janitors and physical therapists must abide by the tighter classification rules.

Some implementation of the law was staggered to give industries, including nail technicians, time to adapt.

The lawsuit describes how the nail salon industry in California became dominated by Vietnamese workers in recent decades, when Vietnamese refugees began fleeing to the U.S. in large numbers in 1975 after the fall of Saigon in America's failed military intervention in Southeast Asia.

The industry "has become synonymous with the Vietnamese community," the lawsuit said, with more than 82% of all nail technicians in California being Vietnamese American, and some 85% women.

The businesses that filed suit include multiple locations of Blue Nail Bar, Happy Nails & Spa and Holly and Hudson Nail Lounge.

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