When a New York state labor investigator entered a Long Island nail salon in July, she spotted two women sneaking out the back. The owner insisted that they did not work there.

But the truth emerged several days later, when one of the women called the investigator and said her boss had told her to flee so she could not be interviewed about her wages. When the investigator returned to the salon, American Beauty, in Port Washington, N.Y., she was surprised when the owner lied to her again about the woman.

“I said, ‘Oh my God, I can’t believe this,’” recalled the investigator, Cecilia J. Maloney.

Labor investigators have swept through nail salons across the state since May, when Gov. Andrew M. Cuomo ordered them to step up their scrutiny of the industry in response to a series of articles in The New York Times that revealed abysmal pay and working conditions among nail salon workers.

From a regulatory perspective, the results of the inspection sweep seem to tell a straightforward story of widespread abuses. Although the state’s plans to crack down on the industry were highly publicized, all but a dozen of the 230 salons whose investigations were closed by late last year were cited for violating at least one labor law.

The Labor Department cited more than 40 percent of the salons, including American Beauty, for underpaying employees, directing them to pay $1.1 million in back wages and several hundred thousand dollars in damages to workers, according to a Times review of closed investigations. Some of the violations were egregious: One worker at a Manhattan salon was paid $30 a day for 10-hour shifts; another manicurist in Queens was paid only $200 for a 50-hour workweek; manicurists at seven salons were forced to work for free or had to pay salon owners a fee, ostensibly to learn the trade; several owners admitted to submitting fake payroll records in an effort to fool investigators.

But the details of the state inspections are perhaps most revealing about just how challenging it is to regulate a largely immigrant-run industry in which almost everything is done off the books and employers are often unfamiliar with the intricacies of state labor laws.

About 85 percent of the salons failed to maintain adequate payroll records, a violation of state law, making it by far the most common citation, according to the Times review. Without records, investigators were forced to accept whatever employees told them they were paid, usually in front of their bosses. Many workers fear retaliation if they are honest about illegal wages, manicurists and labor officials said. One owner, in fact, fired a worker who spoke to an investigator, investigators later found.

“We have a vulnerable worker population slowly coming to understand its rights, but some are still afraid and unsure of who to trust,” said Frank Sobrino, a spokesman for the Cuomo administration. “As a result, they do not come forward to report abuse.”

Labor investigators documented many of the abuses that were highlighted in The Times’ articles. But workers’ fears in speaking with inspectors, along with the fact that the state sweep came at a time of such intense scrutiny on the industry, complicate direct comparisons of the scope of the problems found by the state and The Times. Among the more than 100 manicurists interviewed by The Times, for example, only about a quarter said they were paid an amount that was the equivalent of minimum wage.

The inspection records reveal another reality: Many owners, even some of those making efforts to pay decent wages, simply failed to grasp the technical details of state labor laws. Many salon owners, for example, seemed unaware that they must pay one full hour of bonus wages when an employee’s shift spans more than 10 hours.

Nail workers routinely work days that stretch longer than eight hours and are paid in flat daily or weekly wages, a combination that does not square with state labor laws on overtime pay and essentially guarantee a violation, even when employees are paid a rate that works out to more than the state minimum wage.

In two dozen cases, for instance, owners paid employees an equivalent of at least the state minimum wage and overtime for the hours they worked, but because they did not correctly account for the overtime hours they were still cited for underpayment.

Excluding those cases, just over a quarter of the salons, 67 in total, paid wages documented by investigators that worked out to less than the state minimum wage, which was $8.75 an hour when the investigations occurred last year. Of those, 42 missed the mark by at least $50 a week.

A group of salon owners and Ron Kim, a New York state assemblyman who represents the mostly Asian enclave of Flushing, Queens, are planning a rally in Albany on Monday to protest the enforcement sweep, which they say has unfairly targeted an industry dominated by Asian immigrants.

In interviews, some owners of salons that were cited insisted that they had done nothing wrong and that a few bad operators had tarnished the entire industry. Several said their employees would rather be paid in cash, under the table, because they were not authorized to work in this country.

Min Suk Yi, the owner of the American Beauty salon that was inspected last summer by Maloney, admitted to The Times that she did not keep proper payroll records, but she denied telling the two women to flee and accused Maloney of having a preconceived view that she was lying.

“It’s tough for owners, as well as workers,” Yi said. “Most owners like me work seven days a week for decades. I never even dreamed of taking a vacation.”

Subminimum wage

Golden Nails, a tiny salon near Columbia University in Manhattan, was the subject of the largest total underpayment assessment by investigators: almost $100,000 that six employees should have received over three years

The owners, who had closed the salon weeks before inspectors arrived in May, could not provide payroll records. So the investigator relied on the wages and hours cited by former employees.

One employee said she had been paid $30 a day for 10-hour shifts in 2012 — the lowest amount cited in any of the state inspections. She was given a raise, to $40, but that was still well below a legal wage. Another employee said she had worked six days a week, a total of 61 hours, for $300 in 2013. Under the state’s minimum wage laws, including an allowed reduction for tips she earned, she should have gotten about $450 a week.

Maurice Paredes, an owner, declined to discuss the inspection and blamed The Times for damaging the industry. “You generalize every nail salon as a place where people are taken advantage of, which is not true,” he said.

Last year, a worker at another salon in Jackson Heights, Queens, was paid a rate of $420 for a 63.5-hour workweek, when she should have received at least $700. At a salon in Floral Park, N.Y., a worker earned only $200 for 50 hours a week, when she should have earned twice that much.

More than 10 percent of the salons illegally charged manicurists for supplies like gloves and nail clippers. One salon docked $50 from each worker’s wages every three months for items like gloves and nail polish.

Investigators also found that employees at some salons had to pay the owners to work during supposed training periods, an illegal practice that was highlighted in The Times’ initial investigation.

An employee at the Lucky Nail salon, in the Flatlands section of Brooklyn, for instance, had to pay her boss $100 a day for her first two weeks on the job while she put in 10.5-hour shifts during an “apprenticeship,” according to investigators. She also had to pay $25 for supplies.

The owner, Linda Yang, an immigrant from China, said that before the inspection she thought it was fair to charge the worker. She vowed to never do so again, and said she wished she had received a warning before being fined $4,000. She works mostly alone, she said, in her small salon.

“I want to follow American law and rules to be good citizen, but something we don’t know, they have to let people know first,” Yang said.

In addition to collecting back wages, the state can assess fines. Investigators levied the largest fine on New Broadway Nails, a salon in Greenwich Village.

The task force first visited the salon on Aug. 16. In the days that followed, the owner called three employees and told them to take time off, telling one to stay away “until I make paperwork for you” and another to take a vacation because “I have to fix something,” according to inspection records.

When an investigator showed up on Aug. 25, the owner told one employee to leave, removed the employee’s work apron and pushed her out the door. The employee returned 30 minutes later and talked to the investigator. The owner then asked her to sign sheets that inaccurately listed her shifts. She refused. Days later, the owner fired her, the state’s investigation found.

The state fined New Broadway $10,000 for retaliating against its workers and $5,000 for other violations. The salon also had to pay its workers almost $84,000 in back wages and $66,000 in damages.

The owner of New Broadway denies the allegations and is challenging the findings, said Gopaljee Jaiswal, a lawyer representing the salon. Jaiswal accused employees of “concocting their story” and said he believed the state was “misusing the law” and “bullying the Chinese.”

When investigators visited Happy Nails in Bushwick, Brooklyn, last summer, they tried to speak with Juana Idrovo, a woman the investigators observed cleaning the salon. But the owner initially blocked them, Idrovo recalled in an interview with The Times.

“No, no, no, she is no one here,” the owner told investigators, according to Idrovo. “She doesn’t work here. She just comes to clean from time to time.”

In addition to cleaning, Idrovo said, she had performed manicures and pedicures at the salon for almost seven years.

Idrovo, 35, later called an investigator who had left a business card. She said she had started at $50 a day, sometimes working more than 10 hours at a stretch, and was eventually bumped up to $60 a day.

Happy Nails was ordered to pay her some $6,700 in back wages and $1,677 in damages. The salon was also fined $1,500.

The owner of the salon, which has since closed, could not be reached for comment.

Idrovo said she had lied on the day of the inspection out of fear.

“I was nervous because the owner kept coming over warning me not to say anything,” she said.

Confusing conversions

The Times’ review included investigations that were completed by mid-December. Salons can appeal the Labor Department’s findings. In all, the department inspected 395 salons, mostly in New York City, during the sweep last year.

The state did find salons that were following labor laws. A worker at Atlas Park Floris Spa and Nails, in Glendale, Queens — one of the 12 salons that received no citations for violations in the recent inspection sweep — said in an interview that she had earned $9 an hour plus tips, and liked her job.

In two dozen cases, salons paid workers wages that amounted to more than the state minimum wage but ran afoul of state laws because they paid daily or weekly rates.

Salon owners are required to pay workers 1.5 times their regular hourly wage for any overtime hours. If an owner pays a daily or weekly rate, the state converts that to an hourly rate to evaluate whether the wage is sufficient.

But the method the state uses to convert the rate guarantees an underpayment violation on any overtime hours worked.

Consider what happened to Lyn’s Nail One Salon, in Astoria, Queens, where an employee earned $500 for a 50-hour workweek. That is the equivalent of $9.09 an hour, with $13.54 an hour for overtime, a legal wage.

But following the state’s conversion method, an investigator calculated her regular hourly rate as $10 an hour — dividing $500 by 50 hours — and then issued a violation because the owner did not pay $15 an hour for 10 of those hours.

Officials with the state Labor Department said the method was written into state law and was intended to discourage employers from paying flat rates for long days, which some employers have historically used to short workers on overtime pay. Employers receive advance written notice of the risks of not paying by the hour, officials said.

“We are not cracking down on innocent bookkeeping errors,” said Sobrino, the state spokesman. “We are fighting to recover unpaid wages and improve working conditions for exploited nail salon workers.”

© 2016 The New York Times Company