AB5 and Booth Rental for California Lash Techs: What the Law Actually Says

You rent a suite, or a chair in someone else’s lash studio. You signed a booth rental agreement, pay rent every month, and on your taxes you call yourself an independent contractor. But you have heard AB5 caused problems for California workers, and you have never read the law to know whether your setup holds up.

California’s governor signed AB5 on September 18, 2019, effective January 1, 2020. A follow-up law, AB 2257, amended it later that year and moved the rules into Labor Code sections 2775 through 2787.

The core idea is the thing most lash techs miss: the law starts by assuming you are an employee. Under Labor Code section 2775, a worker is presumed to be an employee unless the business paying them proves otherwise. The direction matters. You do not have to prove you are an independent contractor. The salon you rent from has to prove that you are.

The main tool California uses is the ABC test. Under section 2775(b)(1), a worker counts as an employee unless the hiring entity proves all three of these:

(A) “The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.”

In plain terms: the salon does not control how you do your work, on paper or in practice. Your technique, your process, your pace are yours.

(B) “The person performs work that is outside the usual course of the hiring entity’s business.”

This is the prong that trips up booth renters. If you do lashes inside a business that also does lashes, your work is inside its usual course of business, not outside it. A lash tech renting a room in a lash salon fails this prong almost by definition. And failing any one prong makes you an employee.

(C) “The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

In plain terms: you actually run your own established lash business, with your own clients and operation, not a label you picked on day one.

If the ABC test were the whole story, most booth renters inside a salon would land in the employee column because of prong B. But there is a carve-out written for licensed estheticians and cosmetologists, which is what a lash tech is under California law.

The most common mistake in lash advice here: someone tells booth renters they are exempt from AB5 and stops there. That is half true, and the missing half can hurt you.

The carve-out is real, but not automatic. It has two layers of conditions, and you must meet every one. Miss one, and you fall back to the ABC test and prong B.

Section 2778 holds the carve-out. It says section 2775 and the Dynamex ruling do not apply, and that Borello governs instead, “if the hiring entity demonstrates that all of the following factors are satisfied.” That word, all, is the whole game.

These six apply to a range of professions, not just beauty. The statute requires all six. In plain terms:

1. You keep your own business location, separate from the salon. You may work at the salon; the point is your business is yours, not folded into theirs.
2. You hold any business license or tax registration your city or county requires, on top of your professional license.
3. You can set or negotiate your own rates.
4. You can set your own hours.
5. You customarily do this work for others, or hold yourself out to the public as available.
6. You regularly use your own discretion and judgment in your work.

This is the checklist to read slowly. All five must be true. Here is each, in the law’s exact words, then what it means at your station.

1. Condition I

   (I) “Sets their own rates, processes their own payments, and is paid directly by clients.”

   You set your prices, and clients pay you, not the salon’s front register. If a client books with you and pays you directly at the time of booking, that is exactly what this condition describes. A booking page where clients pay you directly, like SuiteCal’s deposit and payment feature, supports this one piece.

   Stay clear-eyed, though. Direct payment satisfies one of five conditions, and those five sit on top of the six general factors. All eleven must hold. A booking tool that takes payment does not make you AB5 compliant. It handles one line on a long checklist.

2. Condition II

   (II) “Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.”

   You decide when you work and who you take. The salon owner cannot make you stay until 7 for a walk-in you did not choose, or force you to take clients you do not want. If someone dictates your hours or hands you clients, this condition is at risk.

3. Condition III

   (III) “Has their own book of business and schedules their own appointments.”

   Your client list is yours, and you book your own appointments, not through the salon’s front desk. If the salon’s receptionist slots your clients into a shared calendar, you lean toward employee. If they book through your own page, on your own schedule, your appointments are clearly yours. That is what a tool like SuiteCal’s appointment scheduler is built for: your booking link, your calendar, your book of business, separate from the salon’s.

4. Condition IV

   (IV) “Maintains their own business license for the services offered to clients.”

   Where it is required, you carry your own business license or tax registration for your lash services, separate from the salon’s.

5. Condition V

   (V) “If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.”

   This is the one that surprises people. If you rent space at a salon, the law expects you to issue a Form 1099 to the salon owner for the rent you pay, not the reverse. It is written into the condition, not just smart tax practice, and many booth renters have never done it. Ask your accountant.

Meet all five conditions and all six factors, and the carve-out applies. It swaps which test decides your status.

When the carve-out applies, Borello decides your status instead of the ABC test. It weighs many factors at once and lets no single one decide everything. But it has a headline question, which the California Department of Industrial Relations puts plainly:

“A key factor is whether the potential employer has all necessary control over the manner and means of accomplishing the result desired, although such control need not be direct, actually exercised, or detailed.”

In your world, that is one question: who controls how you do your work?

Picture two lash techs in the same suite building. One picks her own products, sets her prices, decides how long a set takes, and answers to no one about how she works. The other is told which brand to use, what to charge, and when to be available, and the owner checks her work. The first is strong under Borello; the second looks much more like an employee. Borello weighs other things too, tools, profit-and-loss risk, permanence, but control over how you work sits at the center.

California has no standalone lash license. Lash extensions fall within the scope of practice of licensed cosmetologists and estheticians, under Business and Professions Code section 7316. So when the carve-out says “licensed esthetician” and “licensed cosmetologist,” that is you. For a full breakdown of how these rules differ across the country, see our guide to lash licensing requirements by state.

This matters for one reason: the carve-out for estheticians and cosmetologists is permanent, with no expiration date. That is not true for every beauty license, which brings us to a law you may have seen in headlines.

If you follow beauty news, you may have seen AB 1514, signed October 3, 2025, effective January 1, 2026. The short version: it is about manicurists, not lash techs. The nail-tech carve-out was written to expire, it lapsed at the start of 2025, and AB 1514 restored it through January 1, 2029. Nail techs live with a carve-out that keeps sunsetting and needing renewal.

Estheticians and cosmetologists, which is what you are, are not in that boat. Your carve-out does not sunset. AB 1514 changes nothing about lash tech classification. Same industry, different license, different rules.

None of this matters unless the stakes are real, so here they are. Under Labor Code section 226.8, willfully misclassifying a worker as an independent contractor carries civil penalties of $5,000 to $25,000 per violation. Willful means knowingly, not an honest mistake. Misclassification can also trigger back wages, unpaid payroll taxes, and penalties through the EDD and other state agencies.

For what enforcement looks like: in 2018, the California Labor Commissioner cited a Temecula nail salon, Young’s Nail Spa, more than $1.24 million for violations covering 36 misclassified workers, with $160,000 tied specifically to misclassification. Then-Labor Commissioner Julie Su said it directly: “Using misclassification as a business model not only denies workers of their rightful pay, but also gives the employer an unfair advantage over law-abiding businesses.”

That is a nail salon, not a lash studio, and not a precedent about lashes. It shows the machinery is real and gets used in beauty. But that case was a business using misclassification as a model. Enforcement lands on arrangements that are actually wrong, not on a lash tech who read the conditions and made an honest effort. The point is not to scare you, it is to show why the eleven conditions matter.

Run your own setup against all eleven and answer honestly:

1. Own business location, separate from the salon
2. Any required business license or tax registration
3. You set or negotiate your own rates
4. You set your own hours
5. You work for others, or advertise your availability
6. You use your own judgment in your work
7. You set your prices and clients pay you directly
8. You choose your hours and which clients you take
9. Your own book of business, your own scheduling
10. Your own business license for your services
11. You issue a 1099 to the salon for the rent you pay

Check all eleven honestly and you are in a strong position; Borello is likely to see you as an independent contractor. If a few gave you pause, that does not mean you are misclassified, just that those are the spots to look at.

You do not need a law degree to run a compliant lash business. You need to understand what the law is actually asking, which you now do.

If your arrangement clears all eleven honestly, you are on solid ground. If you found gaps, the next step is a real conversation: first with your salon owner about the setup, and if the questions are bigger, with a licensed California employment attorney.

The best position to be in is the informed one. Now you are there.