By now, it’s no secret that many beauty professionals are subjected to serious labor exploitation at the hands of salon owners–some of whom are acting with intent, but most of whom are simply clueless. Instead of turning to internet groups for a bunch of useless advice from people who aren’t qualified to advise you, read this post. You’ll find no half-assed assumptions dressed up as “facts” here. Everything on this list comes with reputable links, neatly underlined for your convenience.
1.) Salon owners are generally required to comply with the FLSA.
This is the FLSA. In normal person language, it says, “If an employee’s commission does not equal or exceed the federal/state minimum wage (whichever is higher) for the hours they’ve worked in a two week pay period, the employer is responsible for making up the difference.”
The FLSA also requires employers to pay overtime wages unless they meet all three of these exemption conditions. (Under the “interstate commerce” rule, it’s damn near impossible to be considered exempt, so play it safe and assume that your salon–if it’s accepting payment via credit card, ordering or shipping product out of state, taking phone calls, and servicing clients who aren’t residents of your state–is non-exempt.)
Tips paid to service employees by customers may not be considered commissions for the purposes of the exemption. If the salon owner hasn’t ensured that their employees have been making at least minimum wage after each pay period, the employees are entitled to back pay. (Oh, and the owner is at risk for auditing, fines, penalties for tax and labor violations, and civil suits.)
2.) Tips belong to the service provider.
The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.
For more information on tips, read this post and read this post.
3.) Employers cannot withhold pay as punishment.
Wage withholding as punishment is expressly prohibited by federal and state laws. When and how often an employer is obligated to pay employees varies from state to state. Most states have strictly outlined payment requirements (see New York for example, which requires employers pay their employees at least bi-monthly and in recurring intervals such as every two weeks).
Wrongfully withholding salary from an employer can result in legal consequences for the employer, including: civil suits, investigation, and/or criminal violations. Wage withholding is permissible in certain limited situations in certain jurisdictions, but the laws vary and none of them permit an owner to retain a paycheck due to “disrespect” or “tardiness” or any of the ridiculous excuses some salon owners try to use.
If your employer is illegally withholding your wages, click here to see what you can do about it.
4.) Salon owners cannot “fire” a booth renter.
Booth renters are commercial tenants. They are self-employed. As such they need to be properly evicted following the state’s specific statutes regarding commercial evictions.
5.) An “independent contractor” is self-employed. They are not employees.
Independent contractors do not work a schedule. They don’t adhere to a dress code. They don’t attend mandatory meetings. They don’t work for a salon owner at all–they work for themselves.
Employee misclassification and tax evasion are a big deal. Enormous settlements are the rule, and substantial judgments adverse to employers are typical.
6.) “Product fees” or “head charges” are questionably legal at best. (Messy. Don’t touch.)
Product is considered a “cost of doing business” expense–and businesses are expected to absorb those expenses. Office workers don’t pay for the office supplies they use to do their jobs since the supplies are required to perform the tasks they’re compensated for performing. In the same way, stylists in the majority of states can’t have the costs of color, hairspray, gel, nail polish, water, electricity, or reception services deducted from their wages.
A lot of owners remove the product fee prior to calculating commissions, which is generally fine as long as the employer is FLSA-compliant and the employee is aware of their pay rate prior to taking the position, but not all owners do this. Instead, they tell their employees that they’re making 50% of gross sales without mentioning that 10-12% is being directed to product or head fees. Some owners go a step further and pull the product cost out of the employee’s cut. Do not do this. This is wage theft territory. Don’t swim in those waters.
7.) Employers cannot charge an employee for a “redo.”
There are only a few situations in which the law considers wage deductions permissible–and in the majority of states, this isn’t one of them. Employers, if an employee fails to perform to your expectations, you can fire them, but deducting money from their wages for a mistake is legally perilous at best. (Again, in addition to federal laws protecting employees, there are also many state laws that do the same, most of which are stricter than those at the federal level.)
Yes, I agree with you. It sucks. If an employee doesn’t perform a job properly, resulting in an unhappy customer, why should you take the hit for it? Shouldn’t she have to be responsible for compensating the stylist that performs the redo service? I say yes. Laws say no. Not to mention that this method is ineffective, unethical, and inappropriate. It leads to unhappy employees who might work slower, do unacceptable work, and pass on that attitude to other employees.
Positive reinforcement is a more reliable tool than negative reinforcement.
8.) Employers are generally required by state laws to give employees breaks–actual breaks. They are required by federal law to compensate employees if they engage them to work during their break or meal periods.
During an employee’s mandated break period, they must not be engaged to work. That means a salon owner cannot require their receptionist to take an unpaid lunch break “while she covers the desk.” They can’t force their stylists to sit and wait for walk-ins while they eat in the back room. What employees do with their break time is their prerogative.
Salon owners cannot “engage or suffer an employee to wait” unless they are being compensated. Period.
9.) The consequences are severe.
Under the Fair Labor Standards Act (FLSA), “any employer” who violates minimum wage or unpaid overtime compensation laws may be liable for both the shortfall and liquidated damage (double the damages).
The Wage and Hour Division of the Department of Labor conducts investigations of alleged FLSA violations. When, pursuant to such an investigation, the Department of Labor decides a company is not in compliance with FLSA, there are several ways employee back wages can be recovered:
- The Wage and Hour Division may supervise payment of back wages.
- The Secretary of Labor may bring suit for back wages and an equal amount as liquidated damages.
- An employee may file a private suit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs.
- The Secretary of Labor may obtain an injunction to restrain any person from violating FLSA, including the unlawful withholding of proper minimum wage and overtime pay.
When it comes to recovery of back pay, there is a two-year statute of limitations, except in the case of a willful violation, where the statute of limitations is three years. When employers are found to willfully violate FLSA, they can also face criminal prosecution and fines up to $10,000. Upon a second conviction, employers could face imprisonment. In addition to all this, the IRS often joins forces with the DOL and local labor divisions. Employees may also sue the employer in civil court.
It’s time to quit being ignorant. Stop putting yourself at risk. Doing things legitimately is easier and more profitable.
Be different. Be better. Be safe.
Did you leave beauty school with more questions than answers?
Prepare yourself to enter the salon workforce with this crash course in employment rights, salon compensation, and much more. My courses, Know Your Rights: Foundations and Know Your Rights: Contracts, will teach you how to keep from being taken advantage of in the salon.
Is the no “cost of doing business fee” applicable for all states? I’ve been working for someone for years that charges a chemical fee of 6%. I live in New York. Will the FSLA be able to answer this for me? Can I go back and collect? I’m sure I’m owed thousands!!!!!!
Actually, NY state might be able to help you with that. Here are their current statutes regarding wage theft: https://labor.ny.gov/formsdocs/wp/LS605.PDF
They have some pretty specifically worded, aggressive laws in place. Basically, nothing can be deducted from your paycheck unless it’s court ordered (like child support) or agreed upon in writing *and* for your benefit (like contributions to a 401K or retirement savings).
Having employees pay product fees is a way of disguising lower commissions. If the owner is that hard up for money, she needs to quit advertising a high commission and just offer the lower commission outright. That’s just a deceptive business practice.
What about with Florida? I’m owed thousands too them
In Florida, we are screwed. We’re notorious for having an utter lack of legislative protection for employees.
I’m in Florida and we were givin 50% commission provided that we buy our own styling products and 0.008% be deducted from our tips that were paid on the cc machine. All chase tops are ours. Now we have been told that we are being put back on a sliding scale which roughly equals to 41.2% with still having to buy our own styling products and deductions remain on cc tips. What can I do?
Unfortunately, Florida still lags behind in employee protection laws, but if I were you, I’d refuse to purchase products as an employee. The CC charges on tips are legal, and as long as you’re informed of a change in compensation before you begin work for that pay period, that’s legal also. But the product charges are questionable at *best.*
If you are supplying your own product, you should be getting a minimum of 65% commission. That’s just standard in the industry.
What’s “standard” in the industry isn’t legal. If you’re supplying your own product, you should be a renter, setting your own prices and hours, and collecting your own payment. It’s an employer’s responsibility to bear the cost-of-doing-business expenses; not the employees’ responsibility.
I’m sorry to comment here but it’s the only way I know to comment. I’m considered an Independent contractor but my boss doesn’t pay any taxes. She tells us what to do, when to do it, & where. She also has renters that pay rent and are 100%renters, she just collects a check from them. They do as they please. So a renter (cosmetologist)referred a client to me (nail technician) that never received a service from the spa, only from the renter. So does the client fall under “my client” like if I leave I can tell the client I’m leaving. My boss says I don’t have any clients, basically I can’t build a clientele because I work for her. I feel like I’m being manipulated & taken control of.
Also if a client that follows me from a previous spa refers a client to me, that falls under “my client” right? I get paid more for people who followed me. Another thing, I had to sign a write up last week because one of her clients contacted me wanting to book an appointment. I booked the appointment & told the boss so she could put it in the paper book. She then told me I have to meet her am hour before I usually come in (which at first was when my first client is, then changed to 10:30) for a meeting & sign a write up.
She needs to understand that you aren’t her employee. She isn’t your boss. She has no right to “write up” a goddamned thing, nor to call you in for some ridiculous disciplinary meeting.
Hi Kayla! I recommend reading the following posts:
Who Owns the Clients?
Know Your Rights
The 20 Factor IRS Test
It sounds to me like you’re definitely misclassified.
This article was very informative. The salon I work at charges us 10% off the top of our commission for “product”. The best part is, we are always out of everything. We were told by our distributers and our boss that “a product charge is very common” and “many salons do it.” Our busiest stylists lose roughly, $400+ per week. They are paying for product we don’t even have! Any tips on how to bring this up at our next employee meeting?
Well, I would start first by explaining to them that they are required to adhere to the FLSA, which states that if your commissions do not equal or exceed at least minimum wage for each hour worked, they are responsible for making up the difference. If those “deductions” drop any of you below minimum wage during any pay period, they are committing wage theft, which is really serious business. They could get into deep trouble for labor abuses like that, not just with the federal government either. The majority of states have legislation in place to protect employees also, so they could get hit on both sides.
I would then tell them that if they’re going to try and disguise a lower commission by charging a 10% “product charge,” they’re much better off just offering a lower percentage to begin with. It’s deceptive, unethical, and plain stupid to over-complicate their payroll procedure like that, especially considering how questionably legal it is to charge a product fee.
I am a new Apprentice in a salon in my neighborhood. After giving the owner my fee and required documents for my Apprentice application, I found out that the salon has an expired license and the Master Cosmetologist have an expired license as well! Will I still be able to apprentice here, or is it wise to just move on from this unlicensed salon? Will I be sanctioned personally for working at this salon?
I would say first to report them to whatever authority in your state/country regulates that. They can not be collecting money from apprentices they have no right to be training. Definitely move on and demand to have your money returned. Never practice in an unlicensed facility or under the direction of an unlicensed person. I don’t know where you’re located so I can’t tell you if you’ll be punished or how, but my assumption is that yes, you would be.
Thank you so much for your quick reply! I should have trusted my gut and not agreed to take the position. I am in Alabama and only have a Natural Hairstylist license and was looking to apprentice in Cosmetology. I guess I will keep working in natural hair styling until I find a legitimate business to apprentice with!
Hello I have been a salon owner since 1986 and now I have a situation in witch my booth renters are going out for drinks during there work day and coming back and working on clients what can I do about this legally?
Holy crap! That’s crazy! That is obviously a huge safety issue. I actually have no clue where you would even start there. Your best bet, honestly, would be to contact your health department or your cosmetology board and ask them for guidance in terms of whether or not it violates any code or regulation they have in place. They should have their own liability insurance policies, so you shouldn’t have to worry about being held responsible for any drunken injuries they inflict, but that definitely needs to come to a stop regardless. If neither the health board or the cosmetology board can help you, contact an attorney ASAP about the possibility of making changes to the lease. As far as I know, it is not overstepping your bounds as a commercial landlord to require the staff that work within your building to be of sound mind while working on the premises, but check to make sure.
Seriously, that’s insane.
Tina, you for your research, articles and compassion for the spa industry. I am with you 100%. I’ve been on a mission to make positive changes within the spa industry, starting with spa management. My way is a little different than your way. For, I am not as brave nor as good of a writer as you. The last time I spoke up for spa business ethics, I got fired. Too bad I was an “employee.”
Thanks for encouraging me further to pursue my mission.
Deanna from New Orleans
I work at a salon in MI and I am being charged a “product fee” for chemical services as well as deep conditioners and malibu treatments. When I was hired in, I was told that there would be a commission split of 55% stylists, 45% salon. From what I understand, this commission rate is better than most. I was coming from a booth rental salon, so I was unaware of what the “standard” commission rate is, but I was always under the impression that the commission is supposed to cover our costs to work. I was never made aware of these additional charges up front and I was only given the total numbers after asking, and I still don’t even know how it all breaks down. The fees don’t show up on our paystub and I have never received any totals for how much I am being charged. So basically, I would never have known had I not asked about it. I’m not even sure that everyone is being charged the fee, to be perfectly honest. I’m trying my best to give the benefit of the doubt and go under the assumption that my boss wasn’t trying to sneak it under the radar, but….it’s not easy. I’ve read conflicting statements on this particular subject so basically I am one confused lady!! I love what I do, and I’m confident that this is just a bump in the road, but I’m hoping you can help me out with a little advice.
Also, some people say that if this deduction is made before the commission split, then its fine. What are your thoughts on this? Isn’t that just disguising a lower commission rate as a “product charge”?
Those are exactly my thoughts on it. It’s a way a salon owner can hide lower commissions or justify wage theft. An experienced owner forwards product expenses onto the clients that benefit from the product, not the employees applying it. A competent owner knows how to properly calculate service prices to more than sufficiently cover their overhead.
You live in a great state for this. In Michegan, these deductions are prohibited. ” Except for deductions required by law or permitted by statute (income taxes, social security, garnishments) or a collective bargaining agreement, a written voluntary consent is required for deductions made from an employee’s wages.” http://www.michigan.gov/lara/0,4601,7-154-61256_11407_59886_27856-39062–,00.html
I also work in Michigan. My employer didn’t tell me she was taking backbar fees when she hired me. This last paycheck she took $201.50 for 2 weeks (I did 9 colors). I get maybe 20% commission + hourly. I told her I think it’s excessive to take out that much when I didn’t even use that much product. I don’t think she should be taking any backbar fees because of my low pay and she doesn’t have written consent. She goes on to tell me that it’s legal because she takes it off the top. She constantly belittles me and says that I don’t get it, I’m harming the salon with my negativity and I continue to conduct habitual behavior. I told her I have the right to question my pay, and will ask the wage & hour division and labor board to make sure. She got all pissy.
The wage & hour division told me I need to file a complaint in order for them to look into it.
She doesn’t track hours and only pays commission to the other girls. She doesn’t display licenses in public view and doesn’t have everyone’s license that works there. She also is selling backbar items as retail. On top of all that, she’s a chronic liar.
How do I go about getting all of the things she’s doing wrong looked into? Am I right on this?
Well, you’re in a weird middle ground area. I’ll address each issue in a list:
1.) The deductions, even though they’re made from gross sales, weren’t disclosed when you were hired. You were simply told you were getting a percentage of sales. That lack of transparency may constitute deceptive hiring.
2.) You have no authority to dictate how she covers her costs of doing business, nor do you have the insight into the business operations necessary to understand her decisions. You do have the right to question your pay, but you don’t have the right to criticize her personal business decisions. So, I consider that inappropriate and unnecessary. You can certainly ask and present your perspective (for instance, you feel your wages are too low), but honestly, the environment you two are creating for each other sounds too toxic to continue. It’s probably best for everyone if you part ways.
There are very few rules I’ve found to be true about salon finances, but one tends to apply no matter where your salon is located or how frugal you are: wages that exceed 35% of gross sales are unsustainable. If you’re making 20% commission, plus hourly, plus tips, and the employer complies with the law and has you classified as an employee, she’s also paying employment taxes on all those wages (including the tips), which drives your labor cost higher than you realize (since you aren’t really seeing that tax money in your paycheck).
3.) Her not tracking hours and only paying commission to the other girls is a definite violation of federal law, but not one you can personally do anything about, since you aren’t one of the people affected by those practices. (It’s a stupid law, but the DOL only takes complaints from victims.)
4.) The state board will act on her failure and/or refusal to display licenses, so contact them about that.
5.) More than anything else, I recommend leaving. If she’s a toxic person who chronically lies and belittles you, she isn’t worth your time. Even if she were doing everything by the book (which I doubt), nobody should be subjected to hostile work environments.
I work in a situation where I have been getting paid by commission for 2 yrs and it is in check and cash total amounts are way lower then hrs work per hr. The owner is not from the industry and she is only in business for 2 yrs. She is standoffish and “thinks she does enough for the staff” said staff are all paid w-2 and entire hair staff pay for there products used on clients except shampoo/conditioner and chemical services including color and keratin. Nail staff and hair staff are on commission only. How do I approach this subject? Employee loyalty has been brought up recently by her even though the salon is dead with no clients majority of the time. I myself since I have been there paid a price financially.
An owner with that attitude and no experience is destined to fail in a significant, devastating way. You could approach her diplomatically, but based on what you’ve said, I highly doubt that will serve you. My guess is that a mutiny is imminent–her entire staff (or damn near the entire staff) will abandon her. No amount of rational discussion will change the attitude of an employer who a.) doesn’t understand and therefore can’t appreciate the job her employees do and b.) holds the opinion that she “does enough for the staff.”
I work for a franchise waxing place… can I get fired for no selling enough product or not having a high percentage on pre book ( clients booking their next appointment before they leave)
Unless you have an employment agreement that specifies otherwise, yes. All states in the US are employment at-will, which means you can be fired for any reason that doesn’t violate your civil rights. So, you can be fired for failing to hit objectives or meeting performance standards, but you can’t be fired for getting pregnant, being Hispanic, or any other cause that would constitute discrimination.
I know this is such a late comment but I am just now finding this thread because I am dying for answers.
Our salon is commission. We are told we have to work a certain amount of hours, adhere to a dress code, blah blah. But when it’s tax time our owner tells us that we are independent contractors and technically self employed. We are not paid for meetings. Our salon is a “sliding commission.”
50% $1000 & under
55% $1000.01 – $1550
60% $1550.01 – 2250
However, the salon also takes a set amount off the top of each service. Takes our full toner charge, our full PPE charge and a percent of a color charge as well. I added up my check last week and did the math. I am making 46%. Less than the starting stated amount in our contract. How do I go about addressing this? Am I being misclassified?
You are being misclassified. Nothing about your arrangement indicates that you are truly self-employed. Here’s an article about how to open up that discussion with the salon owner.
I’m confused. I’ve always worked in commission based salons, and have always paid a chem charge. The salon I’m currently at takes this out before my commission is totalled . My previous salon took this fee out after our commission was calculated. Are these both illegal. Truthfully I do not know ANY salons where they do not charge chem fees.
Whether or not it’s legal is debatable, depending on where you’re located. The federal government doesn’t allow it in one statute, but then claims it’s okay as long as you’re not dropped below minimum wage for that pay period in another statute. State laws are better about being more clear where wage deductions are concerned. The vast majority of states absolutely prohibit arbitrary wage deductions that are primary for the benefit of the employer–which a chem charge is. If it’s being pulled out of your commission, it’s definitely wage theft. As an employee, it is not your job to pay for the product you require to do your job, especially since you can’t claim that deduction as a business expense.
I’ve read through the previous comments/questions; but didn’t see anything parallel to my situation.
I work for at a salon in FL. A few things have been going on that caught my attention, and any guidance would be helpful.
1. When a a client is less than thrilled with their service, like color being different than expected, etc, the stylists are required to 1. Fix it so they are happy. 2. Pay the salon for additional prduct used(which is either deducted from the days tips or the next pay period). Is the legal?
2. We are all W2 employees paid on commision, but are required to be at the salon for 45 hours/week; even if we don’t have a client. Also, about every 2 weeks, we have a staff meetings that run into 10-11 pm, that we are required to attend. Personally, I make more than minimum wage, but I’m not sure, is overtime pay an issue there?
3. Another thing that doesn’t seem right it we with regard to travel… We are required to go to classes out of town(that the salon does pay for). But there is no per diem, gas reimbursement, or hotel reimbursement. I know in most businesses, if travel is required, then there should not be any additional expense on the employee; unless the are 100%1099. Is that a valid thought?
There are other things, but those are the 3 most concerning items. I look forward to your response, and let me know if you need any further clarification on anything.
Deducting from tips is illegal. Your tips are yours and they’re protected by federal law. Florida currently doesn’t have any laws restricting an employer from deducting fines from wages, but federal law dictates that your commissions must meet or exceed what you would have made at minimum wage for each hour worked in that pay period. If any deductions drop you below that, it’s a violation of the FLSA and very punishable.
Your salon owner is required to pay you overtime pay–time and a half–per federal law. So yes, overtime pay is a huge issue.
Um, if they’re requiring you to go to classes, they need to not only pay for the classes, but the travel, rooms, and your time. That’s technically work time, so those hours need to be paid for. (Holy crap, these people are blowing my mind right now with all the shit they’re pulling–as a sidenote, if someone is 1099, they aren’t an employee and they can’t be required to do anything, especially attend mandatory training.)
I hope I helped! Let me know if you have any more questions!
Hello I’m concern
I work as a nail technician and the clients leave me tips as $5 or what they feel giving there is time that customers leave me $20 of tips as my the employer takes $1 for every $5 so if I get $20 they stay with $4. It that legal????!
The law on that is linked above in #2. No. It isn’t legal under ANY circumstances.
I’m so mad right now I don’t know where to begin! I practically run the salon I work at and I just recently told the salon owner that I couldn’t be there all day every day anymore because basically its not worth the money. I KNOW my commission does not meet minimum wage.
Yesterday a family member needed to verify my income for tax purposes, and the interviewer said she needs a statement from my boss saying why she is not taking out my taxes.. So I called her and she tells me I’m not an employee of the salon!! That I’m an independent contractor who she chooses to pay by commission! I’ve never been told this before and it is total bull!! I am always at that salon usually BY MYSELF, and I clean it, I set appointments, answer the phones, I market for this b*tch, keep inventory and go out to buy products when we run out, (not with my money, but it’s my gas!) and most of the time I open and close! Hell most of the business we get is from MY Instagram photos that she posts to the salon’s account! And I do all this thinking I’m promoting myself and the salon I work at! Cuz Duh! Why on earth would anyone do that for a place they’re not employed by??
She had a nice little ride on my shoulders I’ll admit, but I am soooo dropping her on her butt tomorrow. That was a slap in the face.. What can I do about backpay? Should I even have been on commission since I’m “not an employee?”
Immediately file an SS8 with the IRS! I’m on my tablet with my son sleeping on me, so I can’t paste the link right now, but search on the site for “misclassified what to do.” The link to the form is there. Also file a complaint with your state labor board.
omg wow how did everything turn out. i learn so much here its crazy how bad we are treated
Ok so I’m new to the industry as im a new grAd well not that new (as of October 2014) but this is my first job, Any who the salon owner isn’t from the industry the only “experience” that she has is owning other businesses but this is her first nail salon which opened in March 6 2015, ok so she started us (the only 5 techs that waited for if to open) “pay vs. commission” structure whit a set pay at $8/hour and commission at 40%, 45% and a cap at 50% each week we could either make a base pay of $8/hour (minimum wage here in Arizona is 8.05
She has to weigh the commission against the $8.05, but other than that, her system is legal.
I’m a little lost. I’m relatively new to the beauty industry and I’m trying to learn all I can about compensation laws so I won’t be taken advantage of.
I’m an esthetician in the state of KS and I recently moved from one salon to another. Everything has happened extremly fast and now that things are settling down and my clientele is picking up again I’m starting to think that may have made a mistake. the salon I moved to is brand new and I am the only esthetician. The owner says I’m a commissioned employee but I supply all of my product and tools except for the room that I provide services out of and a facial machine. Everything else (product lines, waxes, supplies, massage table, lighting, pots,blankets, towels, sheets, makeup, lashes etc.) I pay for out of pocket. My commission rate is 50%. I feel like this a little low being that I provide just about everything. Am I wrong? I also know that you can’t be both, a commissioned employee and a booth renter, correct? I was also told that I would receive certain things if I were to come work for this salon (lash extension training, my own room, a microderm machine) but I received contracts (after I quit my other salon) in which none of this was mentioned. How do I go about bringing this up to my employer without ruffling feathers? I’d really hate to leave because my clients love the salon and I don’t want to seem like a “jumper”. Also I haven’t signed any legally binding paperwork as of yet, if that matters.
You are correct about not being an employee and a renter simultaneously. You are one or the other, you can’t be a combination of the two. Don’t sign anything you don’t agree with. (I’m so sorry this response is coming so late. I’ve been traveling to shows, writing another book, and juggling half a dozen consulting clients.) I would bring this up delicately. I’d point out that she may not be aware of the laws and offer to help her right the situation. I’d also show her how the arrangement puts her at more of a disadvantage than it does you, especially when the legal implications are considered.
As far as being a “jumper,” do not worry about it. The majority of salon managers and owners are fully aware of how mismanaged most salons are.
I live in NY and was wondering if it was legal for an employer to take money out of my pay and give it to another employee for a re do service that I originally did.
Assuming there isn’t an employment contract in place that dictates the terms of the arrangement, they likely could as long as you were paid the prevailing minimum wage for each hour you worked in that pay period. You would have to speak with an attorney for an answer specific to your situation, since I don’t know enough about it (and am grossly underqualified) to answer without specific statutes to reference.
When it comes to an unhappy client, my boss has this policy: The unhappy client MUST rebook with the original stylist whom they were unhappy with and allow that stylist to “fix” the problem at no charge…otherwise if they request a different stylist…they will be charged full price of the service. ..again.
There have been instances where the original stylist was not available due to scheduling conflicts. ..and in those cases, the unhappy client was placed with another stylist for the “re-do”…But then the cost of the original service was deducted from the first stylist’s wages and payed forward to the second stylist performing the “re-do”.
Shouldn’t the owner pay both stylists for their time?
Absolutely. It’s up to the owner whether or not to award “redos” or refunds, but both professionals must be paid for their time–at least the prevailing minimum wage. Whether or not they can decide to revoke the commission depends on whether or not an employment contract permits/restricts it. Since commissions above the prevailing minimum wage may be considered discretionary bonuses, I would assume (don’t quote me on this because I don’t have a statute to reference here) that they could theoretically revoke it in the absence of a contract.
you mean the salon owner is ultimately the one that has to pay 2 operators, deal with the complaining client, solve the issue at hand with all involved, write off wasted product and client might never go back (more loses)? how is that fair?
But then again, owners are the bad ones and nothing ever is good enough!!!
I highly suggest you read more of the posts on this blog, specifically this one, and check who you’re addressing. I’m a salon owner too. We’re not entitled to break the law and those who do create an unfair playing field, making doing business harder for the rest of us. We chose to become business owners. That was our choice. With that came responsibilities and legal obligations. Period.
I understand everything you wrote. However I have not found any salon that follows minimum wage laws. I’m in Northern California and just starting out. Every salon I’ve toured is commission only. The only salons that provide min wage are drybars , chain salons i.e. supercuts or salons that pay min wage to the assistants. There are booth rent salons but they don’t apply to my question.
If every upscale salon operates the same way commission only/no clients no money, how do you bring up the fact that @ the end of the day after all is said and done you should be making min wage for the hours worked?
You bring it to their attention. In California (where numerous laws exist prohibiting this practice), it’s even easier because you don’t have to rely on federal legislation. California is very specific in their laws and they’re very easy to access and read.
I am also in Northern California and have worked at a salon for 10 years on commission (I work part time). Our salon owner wants us to be at the salon for possible walk-ins all day, but does not pay for that time. There is no pay structure in place to pay for time spent waiting for walk-ins. So, according to California law, if I was sitting around for 8 hours and went home without any pay, that would be illegal? That has happened numerous times to me and others. We are told it is to “build” our clientele. Although even after 10 years, there are still slow times when you don’t have appointments. Or sometimes, you have an appointment in the morning and one in evening with a large gap between. I am not free to go and come back, but expected to sit there between. Wouldn’t that also be illegal if not compensated?
Woah, yeah. That’s way illegal, in California in particular. In addition to being against federal regulations, it’s against numerous state regulations.
correct me if i am wrong so to my understanding even though i am commission based (independent contractor) my boss says. even on my days where i do nothing at all she still should pay me minimum wage ? i am so confused because with all this because i am commission she does supply everything but yet i get treated like and feel like employee
You’re misclassified, from the sounds of it. If you were truly independent, you’d be a renter, running your own business, charging your own prices, and making your own hours. Your employer sounds like one of many who like to have their cake and eat it too, but not comply with the laws and regulations (or pay the taxes) required of an employer.
First of all, thank you so much for all this information. I’ve been doing tons of research and it’s amazing just how little facts are out there for salon employee’s! Because of YOU I’ve become aware on how badly my salon takes advantage of me and my coworkers. We’re a strictly commission salon, not being paid minimum wage if our commissions are not enough, not being paid overtime, not being paid for mandatory meetings, not reviving lunch breaks. If I perform a redo on a client who wasn’t happy with another stylists work, I’m asked by my manager how much I want to take of the sale, while being told how much I decide they have to take from the other stylist. If I redid a complete service I want to be compensated for the full service, but they make me feel guilty if I do and tell the other stylist I’m the reason they won’t make anything from it. I know these things aren’t legal, but my problem is that my salon doesn’t have us clock in so and I never see my service totals till my check is cut. If I don’t have proof of my hours can I still make a claim?
Hour tracking is a mandatory requirement, established by federal law.
Well, federal law requires business owners to record hours, so they could be cited for that. However, it’s extremely hard to make a case without those records. I recommend speaking with someone at your labor board regarding your specific circumstances and any applicable state-level legislation.
at least in California, if your employer does not have time records, then the burden of proof is moved to them in any wage claim hearing. So if you file for unpaid wages, and they don’t have those records, with proof (pay stub) that you did indeed work, you are almost certain to prevail in the wage claim
That’s how it should be in all states. It blows my mind that federal law establishes recordkeeping requirements but in many states, the burden of proof falls on the employee. It’s like the owners get rewarded for not having records by being given the presumption of innocence.
I began working in the beauty industry as a freelance makeup artist and received professional training. I’ve since completed cosmetology school and I’m looking for the right salon for me that will allow me to work as a hairstylist and makeup artist in the salon, but still maintain my separate identity (my freelance work) outside the salon. I shadowed/interviewed with a potential salon owner and was told that my freelance work could not take place so long as I’m an employee at the salon. Is that something that can be upheld? Can they dictate what I do outside of the salon in regards to my makeup services? My other question would be, if I’m using my own makeup in the salon, is it reasonable to receive full compensation for the service provided and can the owner charge me a percentage? I want to be able to negotiate reasonable terms for both the salon and myself. I just fear getting the short end of the stick as I’m not willing to give up my freelance work that I’ve been doing for the last 4 years. I put myself through professional education and I’ve spent a lot of time & money into this. Help.
So long as they classify you as an employee, they can restrict you from independent trade as a condition of your employment. If you’re unwilling to give up freelance, if I were you, I wouldn’t. It’s very rare that a salon has enough of a makeup clientele to sustain an MUA, so maintaining your ability to work independently may be critical.
Is it true in all states that an employer must pay minimum wage if the employee’s commission doesn’t equal that during a pay period?? I work at a salon that doesn’t do this and when an employee brought it up they told us that didn’t apply to us because the salon doesn’t bring in enough money to qualify.
Review of revenue rulings makes it clear that the federal government doesn’t reward businesses for poor annual performance by giving them special exemption to federal labor laws, so their income is very likely irrelevant. Most salon owners who contact me for help navigating an audit/labor dispute gross far less than the $500k threshold and are routinely ruled against on both state and federal levels.
Tina I recently came across this webpage and I need some guidance. I just started working at a very high end salon, which they have a good walk in clientele and that’s great. But the commission they stylist receives is only 25% which I’ve never heard of it being that low. Ever! We are required to attend meetings without being paid. Also the salon does a lot of fashion shows and events which don’t end til late in the night (almost midnight) and it’s “mandotory volunteer work” there is absolutely no compensation for the stylist. We are not paid for those events or fashion shows. The salon will even close earlier on Saturdays to do these events without any compensation. We have to get to the salon 30 minutes before our shift starts to do “open duties” and if your late you get barked at. Keep in mind we’re on commission not hourly. Also there has been a time we had to take a class that the stylist had to pay for it and it was deducted from our pay check without any warning. If the salon isn’t busy we are still required to stay for our whole shift 8+ hours. Is this enough to file a complaint to the Workforce Commission?
LOL! You know what America calls “mandatory volunteer work?” Slavery. It’s prohibited by the Thirteenth Amendment of the U.S. Constitution. Unless you’re a prisoner or working for an NPO, you need to be getting paid for your time. That’s such bullshit, I seriously can’t stop laughing right now. You definitely have enough to file a complaint to your labor authority, and to the Federal Department of Labor.
I can only speak on behalf of myself as a salon owner. When you sign up to be a salon owner their is now glittered folder that has any information in regard to any laws. So I thank you for informing us about these situations. When you open your salon your intent is to make your salon better than your previous job or prior employment situations or become part of a consulting group who tells you how to structure your salon.
So what rights do the salon owners have? Is it fair that we have to pay taxes on tipped income? Is it fair that we give the employee time off to expand their education but still have to pay them for their travel and time or better yet the salon pays does their education to them have them leave weeks later? Is it fair that you the owner work your ass off to promote and brand your salon for stylist who feels they are being treated unfair to raid your salon client list, make phone calls, talk shit about your business and steal information? What rights does a salon owner have to set standard of business? At what point do you hold them responsible to want to take action in growing their career and business? Is it fair for me to have to pay unemployment ito a stylist who just wants a job and is not willing to perform the duties they were hired for? Is it fair for me to have to provide incentives to motivate them, give them retail bonus’, Christmas bonus’ and free services so they at least look the part?
Could you please write something to us salon owners who do care on what our rights are so that we know what we are doing right, I think that will help weed out the ones who think it is so freakin easy and possibly show employees appreciation for what they do get.
I’ve long held to the belief that there damn well should be a glittered folder for owners, because it’s completely unfair for regulatory agencies to expect compliance without making a least some effort to keep people informed. Many states are getting their shit together and offering really great internet resources for business owners, but too many still bury their legislation on outdated websites that are difficult to navigate and understand.
It’s absolutely unfair that you have to pay taxes on tipped income. If we’re permitted in most states to forward the credit card processing fees on tips to the employees, why is it not also legal for us to let them bear the tax burden on them? It’s stupid. (I don’t permit tipping in my salons for this reason. Instead, I advise pricing the services appropriately and eliminating the tips. There’s a good argument that the practice of tipping can be considered discriminatory, since research has shown that minorities are often tipped less. Freakonomics has a great podcast episode about it that’s well worth the hour of listening time.)
If you can’t afford continuing education and still want the employees to participate, consider incentives like a higher bonus rate if they complete continuing education classes as an alternative to providing the education yourself. We’ve all had employees we invest in who jump ship. It sucks.
You NEED a non-solicitation agreement and data protection clause in your employee handbooks. The non-solicitation prohibits employees from soliciting the clients, and the data protection keeps them from stealing client contact data. When it’s violated, I advise enforcing it in court. Always.
Unemployment insurance should keep you from having to worry about employees who file for it. I think the current rate is 6% of every $7,000 they earn or something. It’s not like the government will come to you and expect you to pay checks to them out of your pocket until they find a job–at least, that’s not been my experience. (I’ve only had one ex-employee file for unemployment and all I had to do was speak with someone regarding her termination. I provided them with the written warning she had signed, and the employment agreement she signed that showed she agreed to the employment terms–which she violated.)
I’ve written tons of posts about ownership, and articles in various trade magazines, but I’m doing better than that. I’m writing a book on it that I’ll be releasing at the end of this year. Like you, I’m sick to DEATH of people (employees and potential owners alike) thinking that this job is a cakewalk.
I’m considered an independent contractor, and I receive 75% of my tips which are put in my check. The 25% pulled out the owner states is for expenses (receptionist, supplies, etc). The owner says this doesn’t cover the whole cost, just helps. When putting up a fuss, the owner says she can just take away tips totally, discouraging clients for leaving a tip and removing the option from the credit card machine.
That’s wage theft. Federal law prohibits employers from claiming any portion of an employee’s tips unless through an agreed-upon tip pooling arrangement by which tips are pooled together and distributed equally among all EMPLOYEES who typically receive tips. The key words here are “employees” and “who typically receive tips.” This would include shampooers and assistants, but would NOT include receptionists, managers, or the owner. Under no circumstances are tips to be taken by the owner for use for “expenses.” I assure you, she cannot “take away tips totally,” unless she plans on implementing a policy by which the salon no longer accepts them at all. This legitimately pisses me off. I recommend that you report her. She deserves it.
I enjoyed your article but have one bone to pick with you. You repeatedly use the term “women” but last time I checked our industry is not just women. There are plenty of petty, catty, difficult men in the industry too you know!
LOL! You’re right. I need to be more equal in my condemnation of bullshittery in the salon. I’ve had to deal with a good deal of male asshats too!
What about Rhode Island? Does the flsa apply there? My boss said we are the same as waitresses because we make tips so she doesn’t have to pay minimum wage
The Fail Labor Standards Act is federal legislation and applies to all 50 states.
Is there a link to this
A link to what, specifically?
Oh! I’m sorry. I didn’t realize you replied to a comment. Here’s the link to the FLSA.
Any info regarding “piece pay” & “On-Call” regulations?
Also, can you explain “waiting to engage” verses “engaged to wait”.
Following is Spa employee expectations:
1. Paid at piece pay rate.
2. Set on-call schedule10 a.m. to 4 p.m. Tues-Fri
3. May leave the premises for lunch & during downtime.
4. Must return when called during downtime.
And is there regulations on amount of notice given to arrive at work when called in for an appointment?
You’d be better off discussing this with an attorney with a specialization in employment law in your state. As far as I know, on-call regulations are managed differently, and I’m fairly certain that the employee must have the right to refuse in order for it to be exempted from the “engaged to wait” prevailing wage legislation. The DOL has this handy questionnaire to help guide you with regards to on-call legislation.
I have been working for an employer that originally started us out at minimum wage and bonus. Then they went to a commission based pay. However they’ve since told us that we can be paid as “tipped employees and if our commission doesn’t meet minimum wage they add in our credit card tips and say that is our pay! Also if we do not sell at least 10% per pay period they remove a dollar off our commission pay before they figure out our commission. Say I sold 1500.00 but not 10% product. I had 80 clients. They take the 80 dollars out of the 1500 before they figure my commission. It just disappears. It’s not on our pay stubs or anywhere. How is this legal!!! We are in Illinois.
That’s wage theft. It’s not legal in Illinois or anywhere else. I recommend speaking to an attorney that specializes in employee defense to find out what your options are.
Thank you so much for compiling this. I can tell you are quite passionate about the topic. I’m curious how this translates to spa (I’m in NY) which offers body treatments like massage, scrubs, wraps, energy work as well as facials and full body waxing. I have to wonder at points if a min wage rate over the course of two weeks equals the rate I was paid as we are paid based on services rendered. Waxing is commission based. And all other services are a rate based on service duration of 30 min hand on, 60 or 90 each have an additional 15 min turn over time built in so the actual blocked off time is a rate based on 45/75/105min. This might be more than you needed to know
Lol, as long as your combined pay for that pay period equals or exceeds what you would have made at the prevailing minimum wage for the number of hours worked in that pay period, your employer is in the clear. If the amount is short, they have to make up the difference.
How can I prove the amount of hours that I’ve worked in a salon if I don’t have access to my schedule, my paystubs were all labelled under commission, so there was no hours placed onto there. I just left a salon because my boss would hold me there for the entire day “just in case there’s a chance for a walk-in”. We had a receptionist that had quit, and my owner decided that when I’m not busy with a client she could have me do all the receptioning for free, as well as assist her when she’s in a pinch and do her mixing, shampoos, and blowdries. She was overworking me for her benefit. She didn’t have kids, and didn’t understand how I’d rather be at home with my daughter then being in the negative for paying off daycare while I wasn’t making money. Working for her hurt me in the end, but after reading this I feel deserving of backpay. When I told her that I found another position at my second job that would increase my wages quite a bit to where I could make more money and work less than the two jobs she just became mad and selfish. I really liked her as a person which is the hardest part for me, but after how she reacted to me when I told her I was doing the best for my family, I saw her true colors and I want to do what is right, not just stand by and get taken advantage of anymore.
I recommend speaking to an attorney with a specialization in employee defense. Each case is extremely different, and each state has different requirements to prove wage theft. The attorney will be best able to direct you on how to proceed. In the future, I recommend keeping your own records to prevent this in the future. Without proof of your own, it’s extremely difficult to prove, let alone calculate the amount of backpay owed.
I am a newer stylist to the industry, I’ve been looking at my numbers and am about to lose my lunch for what I found now. I live in Illinois and was wondering if there are specific laws for each state, and where I could find them? I was wondering if everything stated above is law for every state? As I’m sure things differ. I’ve noticed a lot of check discrepancies in what I’ve combed through and the salon I work for only pays commission which I’ve noticed has never equalled minimum wage the whole time I’ve worked here how do I go about getting back pay? And this is a little off the money subject but something else we also deal with at the salon is our boss/owner talks about each stylist to clients and other stylists/ co-workers, now this I feel is slander and it makes everyone uncomfortable working there because it’s personal things she’s sharing that should not be talked about and the reasons she knows these things is because we have to explain to her why we need a day off or why were calling off work but she takes these things and tells everyone in the salon what’s going on in the stylist personal life outside of the salon what should I do?
The federal minimum wage laws (The Fair Labor Standards Act) applies to all 50 states. Your best course of action to recoup that money is to find an attorney in your area that specializes in employee rights, and have them direct you. Some state agencies have great resources, but the attorneys will know better which will suit your situation. As for the sharing of personal information, personally, I’d never expect an employee to explain an absence to me, and I’d never disclose my reasoning for requesting a day off if I needed one. It’s not the employer’s business. Since she’s developed a reputation as a gossip, I’d refuse to tell her anything, using that reasoning as justification.
Hello! I Have read a few of your articles and think that you may be able to help me. I just resigned my contract for another year at the salon I am working as a booth renter. I am super easy to work with and typically keep my mouth shut because I have my small clientel and would rather keep working and now rock the boat. However recently I have been getting frustrated and I want to know my rights and my salon owners rights. My recent concerns are….
1. Can she charge an extra montly fee for a shelf to sell retail? I feel like this is an interferance with my business and is not legal. She currently gets all profit from retail.
2. She has a super small salon with 5 stations and one nail room. She is full time, with two full time booth renters and four part time renters who share two stations. Four of us share the nail room, which often gets over booked.
3. Two years ago we switched from a commissioin to a booth rental. Now that we all have all our own color and back bar there IS NOT enough room for us all to keep all our things so the salon is super cluttered and i have to store my color under my station at my clients feet. Not professional.
4. She just told me she is going to also use the nail room for eyelash extensions….. That room is already overbook and angain THERE IS NO MORE ROOM!
5. I am not expecting a lot from her, but i feel like rent is very high and she is not providing what i need to run my business… Am i the stupid one for signing a contract? Does she have to have enough room for that many stylist or does she have the right to rent it just as is, and if I dont like it tough?
THis is just a little of whats going on and hope i can get some help! Thanks so much!
I’d suggest finding a new place to rent. This place clearly isn’t meeting your needs or expectations, and I suspect that the problems will only continue to escalate.
I recently moved from NY to Florida. I’ve been in this business for over 30 years along with owning my own Salon. I’ve always done booth rental. I have a few questions…. I make 50% commission, we are expected to stay all day in case we have walking. I do receive a paycheck but she doesn’t take any taxes out. I signed a piece of paper allowing her to take 5% out of each check . I wasn’t aware that it wasn’t for taxes. At the end of the year she’s giving us a check to help towards the money we will have to pay in at the end of the year. Does this mean I can’t write anything off? We have mandatory classes that fall on my work day which means I loose out on money for that day. We don’t pay for these classes. How about time off? I’m so confused…. Is she my boss? Do I have to ask permission to take time off? When we sell products we get very little profit but are always reminded how low our sales are. I loved doing booth rental…. Right now we all share stations. Depending on who is off is where you work. So many questIons I know…. Also when I first started working I would sometimes make a little over 100 dollars but stay the whole day trying to build my clientele and or waiting for walkins. If the other hairdressers were busy we aren’t permitted to leave because they wanted to make sure no one was turned away. Thank you for your time.
Hi Jan! I’m leaving a link to an article (which also links to other articles) that will help you immensely.
1.) You’re misclassified as an independent contractor, in my opinion. When you’re a renter, you are a tenant and the owner is nothing but a landlord. You run your business independently with no outside influence. Nothing about your current situation indicates independence.
2.) The check to help offset your taxes is INSANE. I have no idea what she’s thinking, but nothing about this scenario benefits you.
3.) She’s absolutely not your boss, but she’s holding over as if she is. She’s doing what so many owners who misclassify do. She’s trying to have her cake and eat it too.
Read this post and all the other posts regarding booth rental and misclassification that it leads to. I normally don’t like to promote my book, but I think you’d also benefit greatly from reading that as well to keep this from happening to you (and others) in the future.
Wow! I have learned so much. What about a corporation in Minnesota that had salons in IL. ? They charge $13 product fee for every facial and it varys from $1-$7 for waxing based on what service we provide. As an Il. Resident am I forced to abide by the Minnesota laws just because that is where the corporation is? I was told product fees are illegal, period but have heard otherwise from my manager. What is your knowledge on this? It’s all so confusing.
The business is required to abide by the laws of the state they’re operating in, which means the Minnesota laws do not apply to Illinois. (That’s like the corporation claiming they can get away with paying a lower minimum wage in a state with a higher minimum wage just because their headquarters is located in the cheaper state. That doesn’t fly.)
Any chance you know of product fees are legal in Il. Salon/spas ? If not how can I find out ? Thank you !
Hi Stacy! I have linked each state’s specific legislation on wage deductions here.
I currently work in Occupational Safety, and I deal with a lot of labor laws as well. I agree with just about everything your saying except for some of the issues on overtime. (I could be wrong, so please set me straight) But if you are an independent contractor (by definition) No overtime is required. If you make $12 an hour or more overtime is not not required (and this includes adding in tips because tips can be considered a part of wage) and if you are in a management position, the title of manager (in some cases) can make them exempt from paying overtime.
I am so happy though that someone is out there talking about this. i run into so many employers that want to make people independent contractors, but set hours and requirements that make them employer/employee, and people need to remember “you cannot sign away your rights” Under no circumstance can you say you agreed to it, or signed a contract and therefore you have to abide by it. Laws are #1, if the contract isn’t legal and if it doesn’t meet the standards required, it is not binding. Even if you agree to be an independent contractor, if a governing body (like the IRS) doesn’t recognize your employment / arrangement or status as an independent contractor, it doesn’t matter what you signed, it is not binding because it isn’t legal.
Warning: This comment response is super long, lol. Grab a cup of coffee or something. I apologize in advance for basically writing a small class lecture in this comment box, lol.
You’re right. No overtime is required for independent contractors, but technically, independent contractors really don’t belong in the salon. (You can read more about why here.)
In my book and in all of my articles, I’m careful to distinguish between employees, renters/microsalon owners, freelancers, and (when the distinction isn’t necessary) “professionals.” (I probably should put some kind of notice about that somewhere, lol.) So, when you see the term ’employee,’ it means people who are W-2. When you see ‘freelancers,’ ‘renters,’ or ‘microsalon owners,’ those are people who are self-employed. Since some posts of mine include references to each, it’s important to notice which word is used. So, yeah, I’ll definitely be putting that in a notice at the top of posts like this from now on, because I can totally see how someone could get that impression, lol.
The title of “manager” alone doesn’t exempt an employee from being paid overtime. To be considered “exempt” from overtime payment, the employee in a management position must be paid on a salary basis of no less than $455 per week and perform certain types of work that:
* is directly related to the management of his or her employer’s business, or
* is directly related to the general business operations of his or her employer or the employer’s clients.
(More exemptions can be found here, on the DOL website.) This being said, it’s important to check state legislation also, as state-specific legislation would need to be heeded. (Some states may not permit this exemption, or may have a higher salary requirement. In those instances, the employer must abide by the laws which are most protective of the employee.)
Proper, salaried managers would likely not be in a position to accept tips, and I’m fairly certain (not 100% positive though), that a tip exemption would be very difficult to justify on a salaried manager. Managers aren’t paid overtime for working more than 40 hours a week. In exchange, their employer must provide a guaranteed salary, which can’t be reduced when they work fewer than 40 hours. These exempt employees have the discretion to manage their time and are not answerable for hours worked or the number of tasks performed. Under the DOL’s FLSA regulations, the minimum salary a worker must earn to qualify as exempt is $455 per week, $910 every other week, $985.83 semimonthly (every 1st and 15th of the month), $1,971.66 monthly or $23,660 annually. If a salaried, exempt manager were performing the duties required of them to attain the exempt status (management/operations oversight), they’d not really be in a position to take gratuities.
In 2014, the Wage & Hour Division recovered nearly $241 million in back wages for employees (22% more than in 2004). The most common and most expensive mistake is wrongly labeling employees as exempt from overtime pay. Employees misclassified as exempt can be eligible for two years’ worth of back wages (three if the violation was “willful”) at 1.5 times the hourly rate, plus liquidated damages equal to the unpaid wages. That means employees can collect up to three times their regular rate of pay.
The use of illegal contracts in this business is driving me up a damn wall. Lately I’m finding a lot of professionals are signing them simply because they believe they’re unenforceable, which is causing a huge problem for some of them when they have to go to court to defend themselves against a willful breach. I advise anyone who is confronted with a questionable contract to straight out refuse to sign. Negotiate it or walk away from the owner’s “opportunity.” If the contract doesn’t sound right, doesn’t make sense, or doesn’t seem like something you’ll adhere to, don’t touch a pen to it to begin with.
[…] From my perspective, the rise of booth rental can be traced along the decline of ethical salon management. If salon owners maintained their positions as leaders and talent developers, this exodus wouldn’t have happened. Instead, many salon owners are abdicating their responsibilities, forcing their employees into the position of part-owner, expecting more of them than is reasonable, or legal. […]
I work in a salon where the owner takes our taxes out of our paycheck each pay period for tips. She takes 15% off of our gross for the pay period. My problem is that some people don’t tip at all, or majorly under tip. So at times I’m being taxed on something I didn’t necessarily get. I’ve worked in a few salons and have never encountered this. Is this legal?? Or becoming common practice? I’d rather deal with my tips and taxes on my own.
Your employer is required by federal law to report, withdrawal, and remit employment tax on tips, as tips are taxable income. That isn’t a responsibility you can take over. (Law prohibits that.) However, the 15% rate is a little shocking. Does that include state income tax or something? Your federal tax responsibility is 7.25% (which your employer matches). You shouldn’t be paying the full 15.3%.
No this is a completely separate tax, there is also a line for state income as well. All tips in the salon are cash only or personal checks made out to the stylist. I’m concerned with the fact that she she just doing a guesstimate of how much we are receiving. So if I do $100 service and the client doesn’t leave a tip I’m still being taxed on it even though it was never receive. I feel like this is a bit of a gray area.
That’s definitely not a gray area. She has to base tax contributions on known amounts. She might be trying to cover herself in this, since she probably knows the IRS has tables that determine tip income, which they use to select cash businesses for audit. She’s probably assuming that you’ll report the correct amount and receive a refund, since overpayment is reimbursed. You could suggest she implement a tip reporting system so you’re only taxed on what you actually earn. I agree with you that her system (although probably well-intentioned), is not working out in your favor from paycheck to paycheck.
Thanks!! Do you by any chance know what an LEIT deduction is?? That’s another deduction on all of our paychecks that nobody has any idea what it is. Thanks for your time!!
You’re welcome! LEIT stands for Local Earned Income Tax.
My question is, why aren’t the State Cosmetology Boards checking on this? In Louisiana they’re more worried about Nail Salons being properly licensed, while the Hair Salons owners are getting away with murder! I have left the industry for this very reason. Owners want you to booth rent BUT you can’t sell products, set your own hours etc OR they want you to be on “Commission” BUT they want you to supply your products, thry set your schedule, and sit there just in case someone comes in. The only other choice is a chain salon and down here they’re ran by people who don’t have a clue about hair, don’t want to pay more than minimum wage and makes it impossible to hit commission. The industry has gone down the drain.
State cosmetology boards are tasked with enforcing state cosmetology regulations, not federal or state labor laws (they have other departments for that). These departments don’t “check in” on these things unless reports are filed, and even then it often takes a while for them to respond because labor abuses are so common and those departments are typically underfunded and understaffed. 🙁
I am from MN and the salon owner I work for charges us Taps fees (product fees) I am commissioned based (50%). She has taken the fees out after 50 %commission split and just three weeks ago went back to taking them out before the 50% commission split. Is this legal? Also is it legal for her to require a sylist whos is commission to stay at the salon when you have nothing on your books? We dont get paid an hourly rate? Another this is the other day she said that we are a no tip salon, which isn’t true we do get tips, why would she say we are when we arent?
Prepare for a long response. Go ahead, get some coffee or something. I’ll wait, lol.
Okay, the short answer for the wage deductions is this: Nope.
In MN, employers may deduct up to $50 TOTAL (over the course of your entire employment relationship) for:
* purchased or rented equipment used to do your job,
* consumable supplies used to do your job; and
* travel expenses incurred for work.
And this $50 must be paid back to you when you leave employment. (MN Statutes 177.24)
Employers may deduct money from your wages if:
* you are covered by a union collective bargaining agreement that allows for it (you aren’t);
* before you made a purchase or took out a loan from your employer you voluntarily agreed in writing to have the cost deducted from your wages (this is referencing “purchases” from the employer, which in your case might be the cost of a hair extension install or a pay advance);
* there is a court order requiring that deductions be taken (for something like child support arrears, for which this situation certainly doesn’t apply).
Other statutes of interest here include 181.06 (permitting authorized deductions specified in a written contract for programs where the employee is the beneficiary–not applicable to service charges), 181.55 (requiring employment contracts between employees and employers that specifies the terms of employment), 177.4, Subd. 3 (tips belong to the employee without exception), and 177
24 Subd. 4 (prohibiting unreimbursed expense deductions from wages for uniforms, equipment, consumable supplies, and travel expenses).
You’ll need to consult with an attorney for clarification on these, but to me, they seem to indicate that the practice of charging employees for consumable work supplies isn’t permissible.
MN also has its own Fair Labor Standards Act, which requires everyone to make minimum wage.
If your employer makes unannounced changes to how you’re compensated and how fees are deducted without informing you prior to making those alterations, and the changes impact the final amount of your pay, that’s definitely against the law. (Employers can’t randomly decide to alter your wages after work has been performed. Those changes must be communicated and approved prior to the beginning of the pay period in which those changes will take effect.)
It’s legal for an employer to require W-2 employees to remain at the salon if they don’t have clients, but those employers are also required to compensate their employees at least minimum wage. If your commissions don’t equal or exceed it, they’re not in compliance with the law.
She’s saying you’re not a tip salon because she doesn’t want to report them or pay taxes on them–that’s illegal also.
I recommend you read the following articles for more information:
Know Your Rights
My Daughter recently started working for Supercuts in CA first job after cosmetology school. They required her to purchase all her own scissors, trimmer, and clippers? Can they do that? She is not getting any compensation back either. I just would think it is not a salon where she is renting her own station she is being paid by the hour. It is a Franchise store not a corporate store if that makes a difference. Just curious doesn’t seem legit to me.
It’s typical for professionals to be expected to provide those tools themselves, and most do out of personal preference since each of us plies our trade better with tools that suit our technical style (for example, I can’t work with fixed shears, I need a swivel shears for my wrists to feel comfortable). I’m not certain whether California prohibits it, but I’m doubtful that it does, since shears, clippers, and styling tools can be incredibly expensive, and can be taken to other places of employment.
This article from SRHM talks about the conditions in which supplies and tools must be furnished in California. https://www.shrm.org/templatestools/hrqa/pages/california-businessrelatedexpenses.aspx
After you actually own a salon someday, after you invest everything you have into the business, after you have spent a decade putting your heart and soul into it’s success- after that- your little blog posts will change lady! Oh, but you can keep living in your disillusioned view of the world, that’s okay because so do all the other hairstylists who are flakes, job hop, steal clients, and are ungrateful for all the sacrifices that salon owners endure so they can have a job.
Lol, you must not know who I am. I advise you to continue reading and gain some perspective before forming uninformed judgments of me and making truly ridiculous statements like this one. (I’ve very frequently denounced every single one of the complaints you’ve made about stylists. Go ahead and check. It’s all here.)
Nobody knows better than I do about the arrogance and ignorance of professionals who come with a hard sense of entitlement and no real clue what ownership requires. However, many owners also have no clue how to comply with the law and ensure their employees are given the rights they’re due. If you don’t like the laws employers are required to abide by to do business in this country, call your congressman, move abroad, or close up shop. Just as you don’t owe anyone anything other than what’s legally required of you, professionals don’t owe you the ability to exploit them.
Can a salon have assistants whom are not paid and only work for the stylist for tips? Some of the stylists use these girls whom are board licensed, then refuse to pay them for services tabulated such as multiple shampoos, color applications and shampoos, washing towels, cleaning the stylist stations eg…. I started recently at a salon to sharpen my skills so I could start doing hair again only to find that most of the stylists don’t tip fairly. Even when given a detailed list of the services you provided. Is it against the law to have assistants who are not on the books and only rely on sporatic tips form contract stylist who pay 230 dollars rent a week to the owner and others who work on commission. Both I might add must provide their own products, colors, skincare, conditioners, perms eg..?
No. Those assistants should be employees, and should be getting compensated at least the prevailing minimum wage. For them to qualify as unpaid interns, the position has to deliver primary benefit to the intern, which this arrangement does not. Renters are obligated to provide their own product, since they’re running their own businesses, but the assistants absolutely need to be getting paid properly.
something sounds wrong for sure and I think the owner should be paying you something weekly a flat rate and on top of that the girls can tip but usually their clients do . I would not stay in that environment
Hello, I’ve been working at a salon for almost two months now in Texas, and the owner of the salon has been paying me my tips once a week. Just last week i waited a week for my paycheck where i was supposed to finally get paid my tips and they gave me my paycheck , but said they wouldn’t have my tips for another three days. My friend said that its illegal and that by law i should be getting paid my tips at the end of every night, but they say they don’t have cash, so i get paid tips once a week. Is this illegal? And if so what legal action can i take?
It really depends on the state’s wage payment laws. Texas Payday Law requires employers to remit payment to employees twice a month (either biweekly or on the 1st and 15th of every month). If an employee is not paid on a payday for any reason, including the employee’s absence, the employer must pay those wages on another business day as requested by the employee. Tips aren’t specifically addressed in the law, but since tips are considered taxable income, they should be included with your paycheck on the pay period in which that income was earned. I’m guessing this isn’t legal, and your next step would be to file a complaint with the Texas Workforce Commission. http://www.twc.state.tx.us/jobseekers/texas-payday-law
Hi! So I live in PA and I work in a salon and recieve 50% commission, alot of the time I am just sitting around, my pays are very slim and I’m getting paid way under what minimum wage should be for the amount of hours I put it. Is this a problem or is my boss paying me right?
It’s a problem. You’re required to be paid at least the prevailing minimum wage for each hour you’re at work.
My boss requires us every year to “spring clean” the salon all day long on a Sunday for no pay. This infuriates me but don’t know how to address it.
Is she insane? I’d say absolutely not. She can either pay $80 or $100 to have it done properly or pay for everyone’s time. Nobody works for free.
Question concerning making up hours.
I am a commission stylist who doesn’t get paid hourly. When I request to take time off my boss makes me make up the hours for the days I’m taking off and some days it runs over on our off time. Is this right? I’ve never experienced this at any other salon I have worked at. Is there a law against this?
There’s no such thing as a commission-only employee. Your employer is required to classify you as a W2 employee and compensate you at least the prevailing minimum wage for every hour you’re present at work. She could require you to make up time if you’re classified and compensated appropriately, but that doesn’t seem to be the case here.
I have a question about apprentice training hours. I own a salon in NYC. We hold a weekly voluntary class for our assistants. This class is an opportunity for them to gain valuable knowledge from the colorists and stylists that are on my team. I myself was never paid for attending these classes as an assistant when I went through my training. I considered it a gift and a blessing that the salon I worked for dedicated time to better my knowledge for free. Currently, it has been brought to my attention that some salons pay their assistants during this training. My question is should my assistants be paid on the clock for this same one on one opportunity? I feel like they should be grateful that they aren’t being charged for these classes. Let alone get paid for them. I could see if they were mandatory classes to train them on how to be assistants or even meetings that are mandatory. I have always believed that this is why you go through the process of becoming an assistant so that you could reap the rewards of this free opportunity to get access to this knowledge.
Please let me know your thoughts.
I wrote a post about this very issue, outlining the laws about it. If you search “engaged to wait” on the site, it should come up. (I’m on my phone and fighting to stay awake, or else I’d link you to it, lol.) Basically, if it’s optional, you don’t have to compensate them. They only have to be compensated when you “compel or suffer” them to work (require them to be there).
You mentioned requiring a meal break time to also answer phones etc. or leaving for your lunch break. In Washington state it lists voluntarily stopping and starting a meal or break still counts as the 30 min required if you complete the time in 2 parts. Like getting a 10 min break to have it interrupted by a client who wants to speak to you, then returning to complete your break period. You can leave if you choose but many staff stay in case of a walk in or phone appointment. segmenting your lunch break during a color processing still counts as a meal break if you receive the whole 30 min within the first 5 hours of your 6 or more hour shift. I do require a break at 5 hours worked to comply with the law but they wish to add it on the end of a 6 hour shift and go home early. This is not within the law and we have to account for the time cards. Any thoughts on this?
That’s incredibly frustrating to me. I understand they want to take as many clients as possible, but they’re putting you into a questionably legal position, since it’s not within the law for them to leave early and count that as a break. I wouldn’t allow it if I were you (because these same employees who are asking you to make this concession now will be the same ones who report you to labor authorities for it the second you piss them off), but an employment law attorney in your area might have other possible solutions for you.
I work for a salon in the state of Illinois. Is it legal in Illinois to charge me a chemical fee?
Doesn’t sound like it. Read the Illinois deductions from wages information here.
If a stylist gets color on a clients clothes, does a salon owner have the right to deduct the price of the clothing from the employees paycheck?
It depends on your state, but in most, they can’t. To see if it’s legal in your state, look up your state’s wage theft laws, or legal wage deductions. Here’s an example from Colorado. Most states have the deduction laws laid out similarly on their websites if you search for them.
Thank you so much for this article. I’m in California where the law recently changed. Apparently, as of January 1, 2016 commission salons are supposed to pay piece rates plus an hourly rate for all the time we’re required to be in the salon if we’re not working on a client. It used to be hourly vs commission, but now it’s hourly PLUS service per piece. And apparently, salon owners are required to back date it to 2012. So that’s the first thing….
The second, which I can’t seem to find any info on, is whether it’s legal for my employer to take 7% as a service fee before paying me commission. I signed an employee agreement when I started, which included a non compete (illegal in CA), that said I would get commission, less 7%. The way I had been calculating it was to subtract the service fee from my total services rendered, then calculate commission from the remainder… But actually, my boss is calculating 7% of my total sales, then calculating my commission from total sales seriously, THEN subtracting that first number. The way he does it, he gets twice as much. I can’t find any language on this being legal or not, but it definitely seems unethical. He used to take 15% of everyone’s credit card tips until the employees complained, that’s when this service fee business started. He also does not have us track our hours and requires unpaid training and meetings, but I do know that I’m only at 50% of potential booking. What do I do?
Okay, the way they’re calculating the fees is completely wrong. You’re totally right about that. It’s not legal under California’s wage theft laws. (They’re linked in this article.) The 15% of credit card tips is illegal on a federal level, and specifically outlawed in California (which doesn’t even permit employers to deduct credit card processing fees from tips). The recordkeeping is also a huge violation on both state and federal levels, and you can find more about that here.
If I were you, I’d contact someone at the state labor board first. California has fantastic employee protections and a strong network to assist exploited employees.
I’m a stylist in the state of Virginia. Is it legal to be charged 3% every time a client tips a stylist on a credit card? Is it legal to make stylist to pay the Credit card machine fees? Also our tips are not given to us in cash they go into our checks, so on top of that they take 6% out of our checks for back bar fees…is this right?
Some states have enabled business owners to deduct credit card fees from tips to offset the expense of the machine. I consider it a reasonable practice for several reasons (primarily that it’s stupid for a salon owner to pay fees on income that’s passed directly to the employee, especially when they’re paying 7.25% of that total in employment taxes on it).
For example, let’s say a client leaves you a $20 tip. The employer is required by federal law to pass off the entire tip to you. They’re also required to pay 7.25% of that total in employment taxes (since tips are taxable income), and the processing fees (let’s just say they’re 2.75% per swipe like Square). So, they’re paying 9.5% of $20 ($1.90) on income that doesn’t benefit the business in any way. That may not sound like a lot, but it adds up very, very fast.
They absolutely cannot deduct fees from your tips whatsoever aside from the processing fees, though. That’s a violation of federal law, and likely a violation of a state-level law also.
Overall, I think the practice of tipping is stupid. I wrote about it here, here, and here, lol.
Hi! I love tins article. – I live in Florida (yay) and our employer gives us “said percent” of our pay.check every two weeks and before our commission is paid to us. We are charged 10% for a backbar product charge. We are employees and he is purchasing/reselling then taking the money back from us. Who should be able to claim that product fee charge on their taxes?
Also, our employer requires us to show up to work 15 min early to our first appointment. We are to use that time to set up our stations and to start our duties ( this is not enforced really). Those 15 minutes are unpaid and we can face disciplinary actions if we are late, we are also expected to show up for monthly meetings (again unpaid) starting at either 930 am 10 am usually and we are then working until 8 pm. Since he doesn’t say they are “mandatory” he doesn’t legally have to pay is correct? But he also can not discipline us either? Any information would be greatly appreciated thanks!!
Allllll that crap isn’t appropriate or legal on a federal basis. If he “suffers or permits” employees to work, they have to be paid. So, if you’re present, you have to be compensated. If he were to attempt to discipline you for not being present at a “not mandatory” meeting, he’s betraying the “not mandatory” status of that meeting, lol. You shouldn’t be getting charged anything. That 10% should be coming out before your commission is deducted, or it’s literally coming out of your check. Most states have wage theft laws prohibiting this, but Florida doesn’t (yay Florida…she said sarcastically, lol). However, federal law prohibits any deductions that drop an employee’s wages below the prevailing minimum wage, so if your checks aren’t equaling or exceeding what you would have made at the prevailing minimum for the amount of time you worked in that pay period, it’s not legal and it’s considered wage theft by the federal government (it’s a violation of the Fair Labor Standards Act).
Tip question; I am in Florida in an independent chain, I am a commissioned employee. When I started working I would write in my tips for the day on my time card, I am trying to build credit and buy a house so I want my reported income to reflect a true ability to pay for the house. Problem is my manager said not to write anything down because they don’t want us to claim tips, they then took the tip line off the cc machine so we are forced to ask the client what they want to close their sale at then take the difference for our tip. I know I can claim unclaimed tips on my 1040 at the end of the year but would it not look suspicious? Should they be allowing us to claim them? Shouldn’t there be a tip line on the cc machine if we are getting tips from cc? Also I am having a problem with the manager causing a hostile environment, she will bad mouth the employees to clients on the floor, never says a name just speaks about us in general giving the clients the impression we are incompetent, we steal from her, and we are unreliable. I have spoken to the owners but now she(the manager) has docked my hours, changed my schedule so I have no peak hours, and has scheduled me for the only two time frames I need off for family reasons. I want to stay where I am because I don’t want my clients to think I’m a jumper but I am at my wits end, the stress alone is literally making me sick. When my sales were higher than the managers she took me off working fridays(one of our busier days), it’s like she touts her authority by screwing with your schedule and messing with your money. Also I have been told that if another stylist has to redo my work that the commission will be deducted from my pay, how can I prevent that from happening if the situation arises?
They are required by federal law to include tips and pay taxes on them. Not doing so is a violation, and a serious one. You’re absolutely right that this affects your credit and your ability to acquire financing. The manager is trying to get you to quit, and that’s unacceptable. Unfortunately, in our state (Florida), we have literally NO state-level protections for employees. They hate workers here for some reason. You can file complaints with the Department of Labor for wage theft. You could attempt to sue for a hostile work environment, however, you have to lean on federal protections. To sue your employer for harassment under a hostile work environment theory, you must show that you were subjected to offensive, unwelcome conduct that was so severe or pervasive that it affected the terms and conditions of your employment. You must also prove that the harassment was based on a protected characteristic, such as your race or gender. This sounds personal, not discriminatory, so you probably wouldn’t be successful there.
You can stop the commission deduction by informing them that you don’t authorize any deductions from your wages. That’s considered wage theft–but only if it drops your pay below the prevailing minimum wage. (Again, in Florida, we don’t have wage theft protection laws either, so we have to lean on the federal protections.)
I’m a single operator salon. I want to hire an assistant. My accountant suggested i give her a 1099. I realize this means that I can’t require anything of her. Can I still pay her hourly and do I just “suggest” hours for her to assist me? I want to respect the legalities of an independent contractor but I also have needs of her. Can a balance exist there?
There’s no balance there. I think your accountant is making that suggestion based on how housekeepers and babysitters are classified, but in this scenario, it’s not an appropriate use of the classification. You’re controlling her far more than is acceptable for an independent contractor. (I’ve seen accountants make this suggestion before, only to have employment law attorneys advise my clients NOT to.) She needs to be an employee, which means you’ll have to deduct and remit her employment taxes and contribute your half of them. It’ll cost you 7.25% of what you pay her every pay period, but it’s worth it to avoid an audit and labor investigation. An “independent contractor” is self-employed. That means they’re running their own businesses, there’s no expectation for a continued relationship, and they control everything about how they perform their jobs. For more information on it, you can read this post.
I’m confused over data laws. Basically my understanding is if it’s in your handbook or contract you can’tkeep or collect your clients data that you personally not the salon have brought into the salon. But if it’s not then you should be able to retain you clients info.
Now legally, can an owner own a client or stylist? I’ve actually had an owner tell me once that she bough and paid for me therefore she owned me. I didn’t take anything not even my records I had before working for her. I left everything including my license behind I was so upset.
She claimed she paid for everything but never paid right wages, deducted for every pump of shampoo, charged me to use my own supplies I paid for our of my pocket including my education.
I’m an owner now and some owners say why Yes we do own our stylist, they can’t have a life outside the salon without our say so because it’s client theft and others are if they leave then they weren’t truly yours mentality.
I get clients that were at the salon prior to me or the salon bought in but this person didn’t market nothing. I created flyers, menues, business cards, etc on my own to market me. I was out of the salon completely 3 years before I came back and opened. I sent out general information post cards to everyone in the area via phone book, I created my own web and media pages and the client’s I never contacted when I left her shop found me and she claims that’s stealing clients. Is she right? Am I banned from marketing my own salon in the other side of a large town because I worked for her 3 years ago and she bought and played for my talent I used there 6 months of my 25 years in the salon industry? I was never that greedy.
Nobody “owns” anyone in the United States. Slavery was prohibited by the 13th Amendment, lol. So, she’s wrong, ESPECIALLY if she didn’t comply with wage laws and committed wage theft (which it sounds like the did).
My opinion on clients is this: clients are people with free will. A salon owner can and should attempt to protect their client base by prohibiting employees from soliciting them if the employee separates from their employment at the salon, but if that client tells the salon owner they wish to follow that employee, the owner should not attempt to restrict that client from spending her money where she wants to spend it. She should refer the client to the employee’s new workplace. Period. It’s disrespectful to the client to try and keep them from following their chosen professional. I wrote a post about it here.
I also wrote a post about clients being “stolen” here. (You’re not “stealing” them if they’re finding you themselves). You’ve done exactly what I recommend all professionals do in this post here: you set up a portfolio and gave clients the means to find you if you leave so you don’t HAVE to solicit anyone. You’re not banned from competing from them whatsoever.
I am a manager of a spa in NY that just opened after Thanksgiving of 2015. I wanted to be generous and offered a sit pay of $12/ hr for hours not booked. This policy was originally in place for only the first 3 months so the estheticians could build their book. Business was rather slow so I extended the policy until this month (June 2015) and now I am ready to get rid of sit pay due to an immense cost to the business but I’m being met with a lot of resistance. Is there a legally appropriate action to do this? I was considering increasing the commission rate per service and giving an additional amount per repeat request and explicitly tell the estheticians that they are not required to remain on the property when not booked, but be available within 30 minutes in case of a walk-in.
You’re required by both federal and NY state law to compensate your employees at least the prevailing minimum wage for each hour they’re “suffered or permitted” to work. (If you’ve scheduled them or asked them to be there, they must be compensated even if they’re not with a client. It’s called being “engaged to wait.”) If the hourly wage you’re paying them is too much and they’re not earning out, the problem isn’t the pay rate–it’s your staffing and scheduling. You’ll likely have to lay off some excess employees or start scheduling more strategically to reduce the amount of time they’re sitting and not earning. The same laws that apply to sitting in the salon apply to being on-call, so telling the staff to clock out or leave but to be available is sticky territory. Read this post for more information on that.
It sounds to me like you’re overstaffed. I followed strict parameters for justifying new hires. Basically, I either had to have a scheduling gap that my existing staff couldn’t fill during a time I had actual need for an available employee (heavy client traffic), or the last hire had to be at least 75% booked on a consistent basis. If neither of those things were true, no new employees were hired.
Additionally, it’s not the employees’ job to build their book. It’s the salon owner/manager’s job to drive traffic into the salon, it’s the professionals’ job to keep the clients coming back. Marketing and advertising are 100% the salon manager’s responsibility. I know people in this business try to force that burden onto their employees, but that’s complete bullshit. Of course, they should help drive traffic by passing out their cards and promoting their services, but that’s not what they’re paid for nor is it appropriate to expect of them.
Increasing the commission definitely isn’t the answer, as it tends to be more expensive in the end when compared to managing the schedule more effectively and increasing marketing efforts to ensure steady client flow.
I can’t find anything about Texas. We use salon iris software at our salon and it gives an option for back bar cost. It made sense to me to an extent since the owner will cap us off at 60% commission. I figure as of right now, I am making 57% commission which means the owner isn’t making profit off my services. However, I am 1099 so she doesn’t have to pay taxes on me. Also we only get anywhere from 10-20% of product sales. We are all independent contractors and when I brought up becoming actual employees she said that with the taxes it’s not worth it for her and also that with all the deductions I get I end up paying less to the IRS at the end of the year as 1099. I claim all the back bar costs as supplies at the end of the year and get write offs for it.
Yeah, but that’s illegal. Texas is required to abide by federal law like everyone else, which means your employer must be paying your employment taxes to the IRS. (She’s committing tax evasion right now, and that’s sortof a big deal.) You also shouldn’t be paying cost-of-doing-business expenses. She’d be much better off both on a liability level and on a financial level if she did classify you correctly. I agree that it’s unlikely she’s making a profit with those kinds of numbers, so she’s putting herself at tremendous risk for no reason.
I am so grateful for your article! I’m at a nj salon making 55% (I haven’t gotten a raise in 6 years, can they do that??). The salon hired a few assistants for the stylist. Each time the assistant preps the client for the stylist they get paid $7. $5 is taken from the stylist total service and the salon pays $2. Is that correct for the stylist to pay for the assistant that was hired by the salon???
Woooah. No. That’s not legal or acceptable. You shouldn’t be paying for employees you didn’t personally hire. That’s wage theft.
I’m a new salon owner in SC, I bought the salon I worked in for the past two years and I am constantly finding things that were done illegally by the former owner. I have two booth renters working at the salon with me and everything has gone very smoothly with them. This week I have a stylist starting who will be doing commission. When I did commission I was paid 50%, my tips were my own, any credit card transactions had 2.75% taken away to cover fees. I was considered an independent contractor did not have any taxes removed for me and was not paid min. wage ever. I never received overtime. My products were paid for, I never had a contract.
I’m trying to make sure I do things legally. My question is, if I have a contract stating that I will pay this stylist 50% commission, provide her products etc. and that she will be an independent contractor will I be functioning within the law or is there something I’m missing?
That is not at all legal. I could explain why here, but I’ve written dozens of posts on it. If you search “independent contractor” in the search box of the website, you’ll find all the articles on the topic. If you have any questions after reading them, please feel free to email them to me using the contact form! 🙂
Hi, I’m a spa/salon owner in SC, with two other owners. We recently expanded and added two more stylists and am esthetitian. They are booth rent, set their own hours, take their own payment, get all the money from services, provide and sell their own product. We allow them to use our appointment scheduler if they want to but it isn’t required. I how we are doing everything legally! Recently, the two stylists (who share a room) rearranged the way we had set up the hair stations. One of the owners is upset about this because she doesn’t like the way it looks. The other owner and I have told her that we can’t control that, they are renting the room and they have the right to arrange it as it suits them. Who is correct?
That depends on your contracts. I think you’re unlikely to find a law that references that, so the courts will default to the written agreement, and that really could go either way. Both sides of the argument are logical, but if you have a more substantial reason aside from the aesthetics (like safety or structural concerns), then you’d have stronger footing than they’d have.
Thanks, Tina. I don’t think our contract addresses that, in actual fact. Something to keep in mind for the future. I do believe that my partner, who is a hairstylist, is upset mainly because they changed the way SHE had set it up. There are no safety concerns at all. I appreciate your response and what I have learned from reading your posts–MOST informative!
You’re welcome! I’d recommend putting it into the leases in the future–stations are where they are and tenants aren’t permitted to move them. It’s reasonable to make that a condition, especially if you’re including furnishings in the lease. (Personally, I’d have a serious problem with it because of the potential for damage to the furniture, and the potential liability if it were to fall onto someone.)
[…] result of innocent ignorance, some private salon owners steal wages, underreport income, and find all kinds of fun, illegal ways to widen their […]
I been a nail tech for 8 years now, 2 years ago I was offered a station at the salon I am now, when I was offered the station for $170 per week (Thats $680 a month) owner told me that in 12 years rent hasn’t changed and it wouldn’t change, that theirs no competition since its only her and I as manicurist and she doesn’t want any new clients all new clients would go to me. One year later she told me she needed to raise my rent to $215 a week ( Thats $860 a month)cause landlord raised her rent she had no choice, that’s almost $200 more witch I really can’t afford or should I say not willing to pay when I’m not booked all days an am a single mother $200 for me is a lot, not only did she raise my rent she hired a new hairstylist as commission, but is now having her take almost all walk-in, I talked to her and told her if I could just switch to part time and pay her per day so she told me that was fine but it had to be a minimum of 3 days at $165 for all 3 days, I do have a large returning client list but not enough to be booked all week. I did the part time for 6 months but was doing 10 to 11 hour days to fit all my clients in those 3 days, since then I have picked up a few new clients where am OK now paying her the $215 per week. I told her I was ready to move back to full time and in a 6 month period she’s now asking for $250 a week for my station now that’s $1000 a month for just a nail station, now that is ridiculous in my opinion, when I provide all my own supplies oh and hair stylist pay $300 per week so I’m only $200 less than what they pay. I love what I do and love were I work and I know for a fact all my clients are Happy with my work and my coworkers as well. So my question is does that sound right? Do I have a right here? What’s the rate for a manicurist booth rental? I thought as a manicurist you pay half or so of what a hair stylist pays, I don’t know what to do. I know I can get into 3 different salon’s here in town since I been offered, I just wouldnt want to do the move since I love were I work. Any suggestions you can give me.
LOL! For $1,000 a month, you could get your own building, hire employees (or lease space to renters) and make 5x the amount of money you’re making alone. It sounds to me like she’s trying to bleed you dry. It’s NOT right. There is no standard rate for booth rental, but her prices are obscene. Honestly, if her solution is to raise your rates to the same prices stylists are paying, you’d be better off finding an 800 or 1200 sqft space and opening up shop yourself. For a nail tech, that rate for a booth is ridiculous.
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I Recently quit my job at a spa due to the fact that I was being treated horribly. I live in Texas btw.
I Went from hourly to commission and then back to hourly in about 7 months of working there. It has been 3 months since I quit and I contacted the employer weekly to get my check stub, in which she never sent out. So I finally contacted the payroll service and got it the next day. Come to find out, she cut my hourly pay.
She has been texting me nonstop horrible text, she also said that it was legal to cut my pay due to the fact that I didn’t give 2 weeks notice. I am an esthitician and a nail tech. Making $9/hour.
She also expected me to answer the phones and work the front desk because she could never keep a receptionist. At times I was doing a mani/answering the phones/ and check people in and out. And I was still making $9/hour. She would also send me home if I did not answer the phones for her.
I just need opinions on what to do exactly?! Or if there is anything to do.
Well, she gave you proof that she’s committed wage theft, so there’s that. You could file a complaint with your state labor board or talk to an attorney who specializes in employee rights litigation for more information. You’ll need records though–things like pay stubs, the texts, and any written employment agreements she presented you with.
I work in MN. My salon takes various product charges “off the top” of services (different monetary values for different services) and then splits the remainder with the service provider on a sliding scale (base line is 40% to the provider, 60% to the salon). So if I do a $40 haircut, I make $14 before taxes. Once your weekly sales enter the next bracett though is where I get confused. Anything under$1100, I make 40%, anything between $1100 and $2500 I make 45%, and anything over that up to $3500 I make 50%… However, Instead of making 45% on the services (minus product charges) for the total amount (let’s call it $2000 for an example) I would make 40% on $1100 plus 45% on $900. So instead of making around $900 (for simplicity I did not subtract product charges) i actually would only receive around $845. Is this type of thing legal?? The same type of sliding scale is used for our product commission as well. Any sales under $151, the stylist makes nothing, between 151-350 it’s 10% and upwards from there in a similar fashion as the service sales…. we are commission only salon, and do not make any hourly wage even though we have weekly and nightly cleaning duties, and do all of the laundry, and sometimes assist with inventory… Is that legal? Our salon offers no benefits (which I think is common)… The salon does offer to pay for half the class sign up expense of advanced education, but does not cover any travel fees. We have no vacation, no sick days, no overtime pay, but we are allowed to take time off so long as we open up more hours on our books on a different day to “make up” the difference…. Which I think is weird.
Also, we have one specialist who is allowed by the salon to double book services by only providing color applications and scheduling blowdrys for these clients on other stylists’ books. The colorist receives all credit and commission for their service where the other stylist receives nothing for providing the 30min blowdry unless she convince that client that they need a haircut instead of a blowdry (in which case they would be paid for the hair cut)… I’m pretty sure this is not ok, am I right?
Okay, so, I’m going to answer this in a list form because I don’t want to miss anything.
1.) “Is it legal for product charges to be made “off the top” before commissions are calculated?”
Yes, so long as you understood that’s how your compensation would be calculated when you agreed to the position. However, Minnesota statute 177.24 Subsection 4 says this:
“No deductions, direct or indirect, may be made for the items listed below which when subtracted from wages would reduce the wages below the minimum wage:
(1) purchased or rented uniforms or specially designed clothing required by the employer, by the nature of the employment, or by statute as a condition of employment, which is not generally appropriate for use except in that employment;
(2) purchased or rented equipment used in employment, except tools of a trade, a motor vehicle, or any other equipment which may be used outside the employment;
(3) consumable supplies required in the course of that employment;
(4) travel expenses in the course of employment except those incurred in traveling to and from the employee’s residence and place of employment.
Subd. 5.Expense reimbursement. An employer, at the termination of an employee’s employment, must reimburse the full amount deducted, directly or indirectly, for any of the items listed in subdivision 4, except for a motor vehicle dealer’s rental and maintenance deduction for uniforms or clothing. When reimbursement is made, the employer may require the employee to surrender any existing items for which the employer provided reimbursement.”
You’ll have to talk to an employee rights attorney for clarification, but that reads to me like it’s questionably legal at best, especially since you aren’t guaranteed a minimum wage (which, btw, is DEFINITELY ILLEGAL, regardless of the state you work in.)
2.) “Is a sliding scale legal?”
The way you have it outlined is overly complicated, and not a structure I’d recommend any of the salon owners I consult for to use, but as long as you’re making at least the prevailing minimum wage, then it’s legal. However, since you’ve said you aren’t, it’s not.
3.) “Is it legal to not be paid for cleaning duties when we’re on commission-only?”
That depends on whether or not the owner is meeting the prevailing minimum wage for each hour you’re engaged to work. If they aren’t, then no, it’s not legal. If they are, then yes.
4.) “Is it legal to not be paid for providing styling services for another employee?”
This answer is the same as the answer for 3. “Yes” if you’re being paid at least the minimum wage at the end of the pay period, and “no” if you aren’t.
I hope I answered them all for you! 🙂
I have a question. We do not log hours ( we don’t clock in or out) so there is no proof of the hours I work to fight for a curtain pay. I work 10 hours a day for 5 days and I’m on call the other 2 days. My checks are not very big but it is commission only. I am a nail tech and I guess I sit and wait so that I don’t miss out on a client otherwise I don’t make any money. That’s how every nail salon I’ve worked for runs their shop. So how would I fight that? I hate sitting here all day without making any money
You need to file a complaint with your local labor authority. If that fails, contact an employee rights attorney. You’re being exploited terribly.
Need your help. I work in IL & my boss offers 40% commission or 12/hr guaranteed (whichever is greater for the wk), sounded fantastic until I found out they use my tips as my pay on my check. They have us track cash tips (taken home day of) and track credit card tips (pd. Weekly/included in our pay check).
So, say I didn’t make commission 1 week, worked my 30 hrs & made $100 in tips (50cash/50cc), that should guarantee $360 (before taxes) plus my $100 in tips, right? So $460 before taxes. But no, they have it set up where they deduct the amount of tips I made from the $360 owed to me, so technically my boss only paid me $260 and they used the ‘clients tips’ to pay me the remaining $100 balance. Leaving me with only the $360, Is this legal? Its so confusing, I know…I hope I’m making sense.
Tips are considered taxable income, so they should be tracking them and remitting taxes on them the way they’re doing it now. That’s all legal and good. (It’s actually nicer than what I’d do–I’d never allow employees to take tips home in cash and deduct those take-home tips from their wages. I’d put all of it into your check at the end of the pay period.)
Okay, so what I’m reading is this:
You are paid commission vs. $12 hourly.
You’re allowed to take home cash tips. Credit card tips are put into your check. Both are reported and taxed appropriately.
What they’re doing, if I read everything right, is taking a “tip credit,” which means they’re using your tips to offset their minimum wage obligations. It’s completely legal and often done in restaurants and other tipped professions. Personally, I disagree with the practice. (I think it’s stupid to give customers that kind of power. I’d rather charge them higher rates and eliminate tipping altogether.) However, if this is what they’re doing, it’s legal.
What about harassment in the workplace? For commission salons and independent contractors?
Here’s some information from the Department of Labor about harassment in the workplace. I don’t know what state you’re in, what type of harassment you’re experiencing, or whether or not you’re misclassified, so it’s hard for me to point you to more specific information.
Hi there, I recently started working for a salon in South Florida the owners are not licensed cosmetologist. They take a guest to the back and do their consult then mix their color while we stand there looking like idiots!! They also check your chemicals and tell you if they don’t like it. Meanwhile the guest actually loves the work. I’m a hairstylist for 20 yrs and just want to know if the owners are allowed to do any of the above without a license.
Technically, so long as they aren’t actually applying the color or performing the work themselves, it is legal according to our state board guidelines. However, I find the entire arrangement absolutely absurd, lol. That’s crazy.
Thank you and I was wondering if clients leave tips on a credit card can they deduct money from your paycheck for the credit card charges?
It depends on the state. In many, they can, but it has to be for the *exact* amount of the processing fee–not a penny more.
Are these federal laws or do they vary from state to state? Unless I’m misunderstanding or these laws don’t apply in my state my employer is breaking all of these laws. I don’t know what to do!!!
These are federal laws. They’re all linked (as are relevant articles pertaining to them). Just click the gold text to learn more about each. Your salon owner is very likely breaking all of those laws. You can use the search bar on this site to find more information about common exploitation tactics by using words like “independent contractor,” “wage theft,” and “misclassification.”
I’m in Michigan at a franchise salon and as an hourly manager of the salon I was told by the owner that if I work over 40 hours per week he doesn’t legally have to pay me time and a half. What are your thoughts or knowledge on this?
My thoughts are that he’s misinformed. Unless you’re on a salary and being paid the minimum amount per week to be considered an “exempt” employee, they’re required to pay overtime like any other business. Make sure he knows that, because if he doesn’t realize it, he could be on the hook for a whole lot of back pay and fines from both the state and federal labor boards.
Hi Tina! Love your articles!
So my employer just notified us that we are not allowed to eat in the salon anymore. We do not have a breakroom so in the past we would quickly eat in the shampoo room, obviously when clients were not present. We now have to take our lunch break elsewhere. Is this legal in Chicago? I for one do not make enough to eat out everyday so I prepare my lunch and honestly, chicago winters are too brutal to be walking around the city (most of us take public trans). She suggested we take our lunch to the nearest restaurant and eat it there. Is this really our only option?
This is an excellent question! I looked through your state laws and couldn’t find anything requiring employers to provide break space (California has legislation that requires it, but not Illinois). I checked Chicago laws too, since you have stricter labor laws in the city and also found nothing regarding break space. I find this very strange, given that Illinois is one of few states that has break and meal requirements. If I were you, I’d discuss the issue with her, because it is unreasonable and impractical. I’m willing to bet the restaurants in the area will not like having you and your coworkers coming to their place to eat food you didn’t purchase there, so the owner is being super presumptuous and is risking developing a bad reputation with the neighboring businesses if she doesn’t arrange something with them beforehand.
Totally agree!!! Who can I call to find this info out? I spoke to management, they pretty much told me to suck it up or leave. They do not take our concerns or suggestions into consideration. It is how it is and thats that… if we like it great, if not, then we know where the door is.
Yeah, if I were you, I’d be out with a quickness. If they don’t value you, they don’t deserve you. They’ll figure out pretty quickly that it’s important for management to choose their battles and take their employees’ opinions and suggestions into consideration. If they’re unwilling to make people a part of the business, how can they expect anyone to feel invested in it and make a career there? Ugh. Poor management.
Hi Tina! So glad I found this forum. I’ve been a stylist at a salon and day spa in Virginia for over 5 years with a commission rate of 60% (5% being taken off the top prior to my share and 10% taken out of credit card tips) paid weekly. We also were getting 15% retail…which was later dropped to 10%.
Anyway…right now the business is being “restructured” with the help of a financial advisor which we were told is to get the owner out of debt from poor business decisions. Originally this idea was presented as us getting a BIG raise because we were raising service prices across the board comparable to similar high end salons in our area. We naturally were excited and looking forward to the change. (Too good to be true.)
During our meeting it was announced (surprise!) we are losing our retail commission all together. Commission will now start at 40% and is determined by our retail sales weekly. If we want to see any benefit from the new pricing we must sell 30% retail based on our services. Selling 30% gets us 55% commission (at which I am already losing money compared to my current rate). 20% gets you 50% commission . 10% is 45%. AND… the owner STILL plans to take 10% from our credit card tips “to help pay his share of social security and taxes”.
I think this is total bulls hit and a scam. It looks to me like this man is THE only person profitting here. And in order for us to even get close to what we are currently making we must bust ass to sell. A lot of my clients buy liters…and he runs these BOGO sales all the time (probably to get rid of all the excess product). My clients won’t be buying shampoo and conditioner for 6 months! Insane. Now I will say, I’m not the best at retail sales but I do reach that 30% goal a lot. I just don’t think it seems fair.
What is your opinion on these new changes? Ever heard of a salon basing their commission solely on retail sales? Is this new pay scale profitable?
Is it legal for hom to take 10% of our tips?? This advisor is backing him up.
Most of my fellow stylists who left the salon are getting 55% and 15% retail (with no extra hidden percentages being taken out).
Any advice welcome!! Thanks!
I highly doubt he’s working with an actual business advisor, since this plan of his is both illegal and not financially viable. If he is, his “advisor” clearly doesn’t have any legal experience.
Employers can’t claim an arbitrary percentage of your tips to somehow offset their tax responsibility. (That isn’t legal. Tell his advisor to read the FLSA, and remind him that just because a Florida court recently decided it was legal for owners to keep tips if they were compliant with prevailing wage laws does not mean that it’s legal in the remaining states.) Tips are taxable income. He must include them in your wages and withhold/remit taxes on the entire amount.
The heavy focus on retail is a poor strategy, likely informed by someone with retail experience and not actual service business experience. He needs to drop whoever this “advisor” is before he ends up in court for wage theft, or bankrupted by this ridiculous strategy that prioritizes sales over service.
Hello, I am located in Illinois. I recently resigned from a salon that I was employed at for 3 1/2years. I was a part of their internship program for over a year. I had to sign the contract stating that I will stay employed with them for a year as a full-time hourly employee after the end of my internship. I resigned due to an opportunity that I could not pass up. on the contract it states that if I were to leave the salon before my year was up, I would have to pay in full for the internship which is $7,000. They recently mailed out a certified letter stating that I owe $6,700. They withheld my last paycheck and put that towards the $7,000. The letter states that I have 15 days to pay this in full or else they will take further actions. I have no clue on what to do, should I ask for them to prorate the amount since I did work 6 months of that year? This is a salon that never paid for any of its meetings but stated that they were mandatory or else we would get written up. Nor are we paid overtime. Also if you were commissioned and you did not have any clients you still have to stay at the salon and weren’t paid minimum hourly rate. If you can give me some advice that would be fantastic! Thank you so much!
Report them to the IRS (file an SS-8 form–google it, it’s online) and the Department of Labor in your state (if your state doesn’t have one, you can usually file reports with the state attorney). In any case, you need to find an attorney who specializes in employment law (employee defense) immediately. They weren’t in compliance with the law (which requires you to be paid at least the prevailing minimum wage). I doubt their “internship agreement” actually detailed the education you’d be getting, and it’s questionably legal at best. Seriously, call an attorney right now.
Thank you! I will!
Im a stylist in Minnesota. Do you have a link to our labor laws regarding hairdressers?
There are no labor laws specific to hairdressers. The labor laws in Minnesota apply to all workers. They can be found on this site.
So is it common for a salon to make their employees 1099 yet still pay them on a commission structure and treat them like regular employees? Is this a way to get out of paying taxes or what? What if they make assistants 1099 and only pay them a set rate per day which is no where near minimum wage most of the time? Can they get away with it because the assistant is 1099?
They do it because they are trying to evade taxes and usually commit wage theft. (It’s easier to steal labor and wages when hours aren’t tracked and everyone is “self-employed.”) They can’t get away with it if you file an SS-8 with the IRS and report it to your state labor authority.
I’m curious about providing product for the stylists stations at a commission salon. Since product used to provide a service is part of the job, is there some kind of limit that can be put on how much product the stylists can have at their station? I assume they can’t just have whatever they want because each stylist could easily have hundreds of dollars in product at their station. As a responsible owner, I would think there’s some kind of way to control this? Setting a monthly dollar amount for station product? Only providing absolute basic products to perform services and then they can purchase extra product if they want something special?
Thanks for any advice on this.
I actually wrote an article about that. You can click here to read it. Legally, if they’re employed, you’re responsible for providing product. If they’re employed, you also have the right to control every aspect of how the business is run–and that includes dictating how the backbar product must be managed. It sounds to me like you’re having them provide product, which isn’t appropriate if they’re on commission.
You confirmed what I was thinking but I wanted to make sure. We are new salon owners so I’m trying to fix all of the mistakes the previous owner made. 🙂
Im in Memphis, TN. Are booth renters required to have a key to the salon? Can booth renters work hours outside of normal salon business hours stated in booth rental agreement? Where can I find booth renter federal laws?
There are no laws for booth renters. You’re a self-employed commercial tenant. You should read this post (and use the search bar to search “booth renter” and read those posts too), but the IRS removed keyholding as a factor for determining independence a few years ago. All your landlord (the salon owner) is required to do is ensure the salon is open during the stated hours on the rental contract. They can’t set your hours, but they can restrict you from working outside the building’s operating hours. Many salon owners do this because having professionals work alone after hours constitutes a serious liability.
I am in Northern California at a commission salon. I am also being charged credit card fees for all my services. I have never experience this one. This is not legal,right?!
California Labor Code Section 351 provides that the employer must pay the employee the full amount of the tip that is indicated on the credit card. The employer may not make any deduction for credit card processing fees or costs that are charged to the employer by the credit card company from gratuities paid to the employee. (Employers also aren’t permitted from deducting anything from your non-tip wages in California.)
HOWEVER, if the employer is deducting those costs prior to calculating commissions and you were aware of that arrangement before the charges were implemented, it *might* be legal. You’ll have to talk to someone at your state labor board for clarification.
We are considering a group health insurance plan in our commission salon. After reading your blog post, I feel that we comply with all of the laws that you have discussed – our commissioned stylists/technicians and hourly staff are treated as employees and we pay all appropriate taxes – we have a tip reporting system and report tips as income – we have no product charges – we do not make our employees pay any type of CC transaction fee – we have hourly paid desk staff and assistants that we pay for. We provide 2-3 CEU classes each year but attendance is not mandatory, however our stylists appreciate getting the CEU classes, free of charge and attendance is good. Commissioned staff sets their schedule and we do not require them to stay in the salon if they are not booked, however, many do remain in our break room and spend the time reading books, surfing the web, etc. during their break times. We do not “make them” work the desk, do inventory, stock, fold towels, during their down time. In terms of setting up a group health insurance plan, we are grappling with defining full time status (30 hours per week). Some stylists stay to pick up last minute walk-ins, etc. but this is their choice. In terms of a group health insurance plan, we will be required to offer health insurance to any employee who meets the requirement of 30 hours per week. Our insurance broker suggested that it should only apply to employees who have logged productive hours during the week (booked hours). Our software can easily calculate actual “booked” (productive) hours for a 12 month period to see which employees meet the 30 hour standard. We have a few employees who have open books for at least 30 hours a week but might only be booked for 20 hours. Again, we do not make them stay in the salon when they are not booked and they are free to block out times if they are leaving. We also do not want to get in a situation where very-part time employees suddenly open up their books to meet a 30 hour standard to qualify for health insurance but are no where near 30 hours of booked services. If this is the case, we will not be able to afford a group plan. I should also mention that we give our commission employees (and full-time hourly employees) a week of paid vacation each year. In order to afford health insurance we will need to tell our employees that it will be either/or – either health insurance OR paid vacation, but not both. We simply cannot afford it. Can you provide some guidance on what is considered to be a “full-time” commissioned employee? We desperately need direction on this so we are complying with the law and I have not been able to find any definitive rules.
The FLSA doesn’t set definitions for “full-time” or “part-time” employment. That’s left up to the employer’s discretion to define. However, most enterprises consider 35-40 hours per week to be full-time, and anything under 35 hours per week to be part-time. Since they’re employees (classified appropriately and compensated legally), it’s entirely up to you to set the rules and standards for health insurance and/or paid vacation. If I were you, I’d go by the typical definitions most corporate employers use and stick with the 35-40 hours as full-time and 35 or less hours as part-time. I can’t think of any business I’ve worked for that has used any other scale to measure employee involvement.
I work in a salon where I rent my booth. I pay $200 per week. A brand new stylist just started and is trying to build her clientele. The shop owner is giving her the option of paying full booth rent or receiving commission. The girl decided to start off doing commission. The owner takes 40% and the stylist gets 60%. The problem I see is that the first week she brought in at least $700. The owner received $280 and the stylist received $420. The $280 is well over what the rest of us pay per week. The owner does not supply any color, product etc… She pays her cash. She will not advertise for her either. Am I crazy or does this seem wrong? Any thoughts or opinions would be greatly appreciated!
Personally, I think this is wrong. The owner should have offered her the deal of “40% OR $200 a week.” If the new stylist made under $200, the owner would accept 40% of whatever she made. If the stylist’s earnings exceeded $200, she could just accept the $200. This arrangement is exploitative, but unless your state has any laws on the books for commercial tenants, the renter likely won’t have any recourse. It’s just a shitty thing to do.
Question: I am a salon owner in FL. I just hired a commission stylist. I understand that I have to make up the difference in her pay if she does not meet minimum wage for her hours worked. When determining this do I count the money she made in tips or just what she made in commission for services? Thank you!
Alright, so I’m going to partially answer this with the assumption that you will take the time to check with an attorney here to be positive I’m right and the information I’m sending you is current and accurate, okay?
The amount you’re required to make up once tips are accounted for depends on whether or not the employee could be considered “tipped” or not. Personally, I believe we are considered tipped employees since most of us do receive more than $30 a month in tips. However, to be safe (and for all the reasons listed in this post and this post), I actually don’t advise accepting tips, so we do not at my salon. I don’t advise my consulting clients to consider their professionals tipped employees because some states have wacky laws regarding tipped employees, and those laws change. For me, it’s too messy to bother with.
However, if you speak to an employment law attorney (there’s this firm in Orlando I refer people here to), and they say a tip credit is totally appropriate, you should read this article about how to calculate and offset wages.
So I just started working at a salon a month ago in Georgia. The salon is commissioned based only 40/50 (stylist/salon). I am told what to charge, what hours to work, what to wear, if can possible go to lunch, can’t take any more than 2days off a month and must be present for all meetings pretty much I am a employee but was told to file a 1099. Plus the first week I wasn’t able to work, had to have unpaid training so I made nothing, the second week I made $285 which included the mandatory %10 gratuity on each service that was rendered, minced $5 for snacks that are for the staff and clients. The third week I did one client and was paid only my %40 from that client again minced my $5 snack fee. Now we are being told that if we don’t sell any products for that week they will either deduct %25 of our pay or our tips. This is my fourth week and suddenly I’m just like this couldn’t be fair how could I live off of this. What us your advice Tina?
Report them immediately to local labor authorities and federal authorities. You’re in GA, which isn’t very employee-friendly, but the IRS and Department of Labor would certainly take an interest in that (it’s illegal to take tips, it’s illegal to misclassify, it’s illegal to pay wages below the prevailing minimum, it’s illegal to deduct wages arbitrarily after the work has been performed).
Then, find a new job. They’re screwing you and everyone else there. Here’s how to report them to the IRS. Improperly Classified: What to do when you’re being misclassified as an Independent Contractor
Hi Tina! I am about to take on my first apprentice. This will be one registered with the state and they will be getting their hours through me in lieu of beauty school. I have read your book and my salon is ran completely legal. I obviously will not be charging them for the training. I would like to know what do you have to pay an apprentice? I would also like them to sign an agreement that they would work for me for at least a year after they receive their license so I can recoup my investment. I live in a very rural area and it is difficult for people to get to beauty school and it is difficult to find employees so I am hoping this will be an alternative.
Perfect! For their first year, you’d pay them the prevailing wage (or slightly above it depending on your area’s cost of living–you want to ensure they can afford to work for you so you don’t have any overturn due to financial difficulty). You can have her sign an employment contract agreeing to work for you for a period of time or reimburse a dollar amount you set, however, DO NOT WRITE THAT AGREEMENT YOURSELF. This is lawyer territory. Don’t trust a template or someone who isn’t a licensed employment law attorney to handle that for you. Those agreements skirt a scary legal line separating employment from indentured servitude. The agreement will outline exactly what you’re providing to her in the way of training. This means she isn’t just an assistant or receptionist to you. An actual apprentice must be trained on a schedule. If you fail to fulfill your obligation to her, she has the right to leave that arrangement with no penalty. So, have it spelled out clearly. Once all that is done, you recoup your cost by compensating her at a lower starting rate for the first year and raising her compensation after she’s demonstrated her ability to perform independently of your oversight and guidance. (Without formal education, you can expect that to take at least a year if you’re keeping clients in her chair.) Apprenticeship and mentoring are generous contributions to aspiring professionals, but a lot of people abuse them, so be sure your agreement clarifies that you both have obligations to one another and consequences to face if either of you fail to fulfill them.
Hello. I work in Massachusetts. I only have my operstors license, and I’m just going on one year with it. I started at a salon right out of school. It had been a nightmare! I was an office manager before going back to beauty school. And my employer is taking advantage of that, not to mention she wants me to be her dog walker and personal taxi as well as her personal assistant. I’m lucky if I touch one head a day. Not to mention she always downs me in front of clients, for things that are not true. I’ve actually had other stylists the ask if she was purposely sabotaging me. And she takes my tips. Now after all of this I find out she lied to me. She told me when I first stasted that I was only making minimum wage I would not make enough to have to pay taxes. This is what she told me her accountant told her. I nievly believed her. Then she asked me if I had put anything aside for the self employment tax. This shocked me. I told her no. I was not aware I was being 1099. I have told her 1. Legally I’m am employee. She can’t just say I’m myou own business. 2. In the state of Massachusetts I can not rent a booth for the first 2 yrs. She told me we would talk to her accountant. So we went to the accountant and the accountant said that technically I am an employee but they were going to 1099 me any way, cause who really checks on that stuff. Yes those were her exact words. So now I don’t know what to do. I find out I am going to owe the IRS thousands of dollars. She said she had 5 or 6 assistants and 1099 all of them amd it was never a problem. My gut is telling me that is a lie. What will this do to my license? Can I be 1099 with only an operators license? What reprocussions, if any, does she face with the state board if she does 1099 me? I spoke with her assistant prior to me. She said she did get a 1099, but not until May! So she has not filed it yet. And she said that after working for my boss she no longer wants to be in the industry so she hasn’t done anything license wise either. She also told me that my boss basically picked a number and put that as income. Her accountant said she would just add up the checks she wrote me and use that as income. However, I buy her lunch, coffee, supplies for the salon and she reimburses me. But I don’t get a get stub. So now I’ll be taxed on what she is reimbursing me? She obviously does not care that she is completely screwing me over. I’m hoping if I let her know there are consequences for her she might think twice. I guess I’m also hoping that is just not possible for her to be able to treat others like this and get away with it!
I really wish I could say that this surprises me, but it doesn’t. Luckily, there are things you can do right away.
First, get a new job immediately. Don’t stay in that situation. Tell your coworkers too. This bullshit happens everywhere, every day, and until we agree to leave exploitative owners employee-less, it will continue because they think they can get away with it. This is why the next step is so important, too.
File an SS-8 with the IRS. They take a while to perform an investigation, but they will.
In the meantime, file a labor complaint with the state labor authority.
In January, file your taxes as a misclassified employee. You’ll only pay the employee portion of the employment taxes, and the IRS will hold your (hopefully ex) employer responsible for her unpaid taxes (and the unpaid taxes on everyone she’s hired, past and present.
So I’ve worked in the same salon for 25 years, about 20 years as an independent contractor in Calabasas, CA. Every year rent goes up but no one can explain why (but we’re given all kinds of excuses). Our owners go thru our stations without asking taking things out if they believe it belongs to them. Some of us are part time renters others full time. We are constantly moved around if we’re the part timers and told that when we are part time and need to share our station, we have to give up every other Saturday. They constantly dictate how we have to share our space even though most of us have been there at least 20 years or more and no where does it stipulate any of this in our contracts. I have rented the same space for 20 years. Just recently two salons went out of business in our area and we got three new renters. Without my knowledge the owner let one of the new people use my station, and when I confronted her she told me its temporary but that I would have to work out of my station (that I rent for 3 days at $165!) and inconvenience me when all my equipment is at my station. Now one of the other new hairstylist shares my station which I didn’t have a problem with, but now he wants to have a station full time so I was given an ultimatum of pay full time or give up your station and share with someone else. He’s only been there 2 weeks. I know this is there business, but I feel there is no professional ethics or loyalty. There’s a lot more going on than this but at this time would like your advise on how to handle this. Thank you.
I can explain why the rent goes up (inflation leads to increased operating expenses, living expenses, and commercial rent for the owner, so part of it is to offset that), but I can’t explain why the hell they’re going through your stations or taking your belongings. That’s completely inappropriate and may be considered theft.
In your shop, it definitely seems like there are no ethics or loyalty, but that’s fine. That road goes both ways. You don’t owe them anything but a rent check. I’d agree to share with someone else, on the condition that they re-write your lease to prohibit the constant station shuffling and to forbid them from helping themselves to the items in your station. As far as the lease is concerned, it should clearly state that the station is YOUR property and the property of the renter you share space with. There’s no excuse for them to be going through your space or taking items that don’t belong to them.
Hi there, thanks for the super informative article! As informative as it was I’m still left with several questions about some things that my employers is doing and has done. I’m a stylist located in Denver, Colorado.
First, my employer takes 12% of the tips that the stylists and barbers make on credit cards and redistributes them to bolster the pay for the front desk/receptionist staff. He claims it he does this to attract and keep quality front desk personnel. Is this, in Colorado, a legal tip pool?
Second, with regard to the 12% of our tips being redistributed to the front desk staff, we are not given on our pay statements the total amount of tips we have earned during a given pay period. What is listed is what I believe to be amount of our tips that we get to keep – 88%. But there is no accountancy of what the original amount was. Additionally, I have no idea if we are being taxed for the amount (12%) that we have to hand over to pay the front desk staff. Legal, not legal?
Third, I was originally hired to help create and run a education and apprentice program for the salon and it’s staff. In addition to that I was expected to take guest behind the chair as well during the week – which I did. The initial agreement that we had was that I would be compensated (whichever was greater) $xxxx.00 per week or 40% commission to do all that I was hired to do – again, which I did. The last two pay cycles I have not received product commission for retail (which I had previously been earning). When I spoke to the owner about it he said that I wasn’t a commission stylist so why should I receive a retail commission. He did this without telling me he was going to do this, just went and did it. Legal, not legal? The next thing to happen was that he called me up the day after Christmas (yes really) and told me that he would have to let me go because he could no longer afford to pay me what he had promised to pay me because he was worried about keeping the business solvent. He did counter with keeping me on as a strictly commission stylist. Since I have a house payment and a family to provide for of course I agreed. When I started there the agreement we had was in writing as to my compensation. Is it legal for the salon owner to do any or all of this?
Does the owner have a sign posted to that effect? Here are the Colorado laws regarding tip pooling and claiming tips for redistribution. To me, this is a bullshit excuse. Building the cost of your support staff (even “quality personnel”) isn’t rocket science.
You need to be tracking your tip income and insisting on detailed wage statements. I can’t find any laws that specify how taxation on tips is to be handled in your situation (where funds are being diverted to cover the cost of other employees). Since it’s not your income because it’s being claimed directly by the employer, my assumption is that taxing you on it isn’t legal or appropriate. It’s not your money. You’re not making a contribution from your own paycheck to the business out of the goodness of your heart.
The commission elimination may not be legal, since you were hired under an agreement that awarded you commissions on retail as part of your compensation. The removal of that retail bonus constitutes a reduction of wages “after the fact,” which is generally considered wage theft. Here are Colorado’s laws that define what wages are. Commission bonuses are considered wages. I’m not a lawyer, but I’m inclined to believe based on the wording of the content on the CO state website and their wage act linked here that what he’s doing isn’t legal or permissible.
It’s legal for him to reduce wages when necessary, so long as you’re informed, but it sounds to me like you’re working for an amateur who doesn’t know what he’s doing. He’s having employees pay employees. That’s never a good sign. Find a new job, ASAP. It’s not your responsibility to suffer for someone else’s piss poor management.
I work in Ga. In our salon we have a problem where a stylist wanted to work on commission so that is how she was hired. She worked and pocketed everything she made, but after 3 weeks she has only paid $40 dollars towards her rent. Her only exclamation was ” I’ve got to pray about it.” Being kind like we are, We put her on commission to allow her to still work with an agreement to accept payments from pay to cover the lost rent. Do we have the right to withhold a portion of her check weekly until her debt is paid? Also she is refusing to charge clients what the set price list is for our services. She was told repeatedly that she has to charge what the set price is from the first day of employment. She has insulted the stylists saying the prices are beneath her. But we have kept her in hopes of her being able to pay off her debt. What can we do? We are willing to cut our losses and let her go to save our clients from being overcharged and risk not returning.
LOL! Oh, wow. That’s typical. This is part of the reason I don’t recommend percentage of sales in lieu of flat rental amounts. It’s a generous offer, but not a wise one as it’s inviting abuse.
You’re in a serious bind here because a lot of what you’re doing isn’t legally correct. I recommend reading the Know Your Rights post, because if this worker is a renter, you don’t have the right to set her prices. She’s not “employed” (so she’s not an “employee,” she wasn’t “hired, and she can’t be controlled like someone on your payroll). If she’s a true renter, she’s self-employed, and that means you are her landlord–nothing more. Your relationship is entirely transactional. She hands you a check for the rent and conducts her business without your interference.
If you’d like, you can click here to schedule a call with me and I’ll answer any questions you have, but my recommendation would be to speak with an attorney about what legal ramifications you could be facing if you terminated her and she decided to go the IRS or DOL. For certain, if you want to control your workers the way it sounds like you do, rental is NOT the way to go. You will need to immediately change to an employee-based system.
I do understand the rules of being a renter. I have been one in the past myself. She was allowed to rent a chair with clear understanding that she would in deed pay her rent.The problem was she did not do so, for weeks. She didn’t bring or use any of her own products, chemicals. We helped her by giving her cards to allow her to get her name out for she stated she did not have the funds to do that upon starting. We knew she would be charging different simply because she was a renter. Please don’t misunderstand me. I was a little vague and not giving an entire picture. None of the products, chemicals or rent were reimbursed or paid upon. She just pocketed the money and went about her business. We are not there to pay her to get paid. She knows the game.. We are a group of stylist that have been down the renter trail and honestly rather work together as a team instead of individuals. More like your Neighborhood Place to go. The clients we have are very friendly and we participate in community projects to give back. We know we are not here to get rich, but want to give the ones down on their luck, or even cut a break from all the high price hyped salons for our upscale down to earth clients as well. It’s been a long road to get here but we don’t want to undo what we worked so hard to do. The new stylist is a nice person don’t get me wrong, just bad business with non payment of booth rent. I just feel that her price range may be good for her but not for our location, that is all. When her working here was discussed the prices were agreed upon. I wish her all the luck but do not want to scare off the clients we worked so hard to give us a try to see that getting your hair done doesn’t have to break the bank. I do know that Ga is an “At will employment ” state. and will talk to an attorney about the issue of money lost from non payment. I don’t think we will be having any other renters after this fiasco.
The problem with using your experience as a reference is that so many salon landlords don’t understand booth rental, so they do a lot of things wrong without realizing it. Your defensiveness isn’t necessary, I just want to ensure I provide you with the assistance you asked for.
Your willingness to help her is generous, but doesn’t work in your favor, not just because it isn’t making you money, but because it’s putting you at risk. You can certainly advise her on her pricing, but you can’t dictate it. How she runs her business is up to her. If she fails, she only has herself to blame (especially since you’ve done so much for her thus far).
If her way of doing business isn’t compatible with yours, it’s time to part ways.
Please do talk to an attorney. Georgia’s “employment at will” laws don’t apply to this situation as renters are self-employed and are exempted from those laws. My assessment is that your understanding of the booth rental structure has been influenced by owners who likely didn’t properly understand just what “self-employed” means, which, for the record, I totally DO NOT blame you for. It’s extremely typical. I see it every day. I just want to make sure you can make informed decisions moving forward so you don’t unknowingly put yourself at risk.
I’m a nail tech and I’ve been a booth renter for six years in a salon with two hair stylist and a massage therapist. One stylist was the owner. She was very poor about cleaning the salon, buying supplies, snow removal, equipment repairs and I had to deal with tanning customers that don’t benefit me financially. She just sold the salon to an owner who has never owned, operated a salon. He’s never been in the business. My rent has increased and I’m expected to keep the entire salon clean in conjunction with the other tenants and provide paper products and cleaning supplies. The previous owner is now a tenant and supposedly the manager. The massage therapist is rarely there and has never participated in cleaning or supplying common areas. I work 12 and 14 hour days five days a week and 1/2 days in Saturday. I’m not sure I want to agree to these terms. Is it common for a salon owner to expect renters to maintain the salon and clean, other than their respective areas?
It’s common, but not legal or appropriate. You should read this post.
I am a booth renter, but the owner of the salon I work at requires us to have business cards with her name on it and all gift certificates are paid to her and if we perform the service, we are reimbursed. Is this legal?
Requiring you to put her brand on the business cards isn’t legal, but the gift certificate situation is–only IF it’s not mandatory to accept them.
Is it legal for my employer to take 15% off on credit card tips?
In some states, employers are permitted to deduct the cost of credit card processing fees from tips only. (For the amount of the tip, not the amount of the overall bill.) For more information on tips, read this post.
Thank you for your excellent, eye-opening information and advocacy.
I have two questions:
1) In my previous spa job, I was required to give up a % of my tips from spa party clients to the spa party coordinator, who is a salaried employee. So instead of receiving $15 dollars, I would receive maybe $11. Is this legal? Can I do anything about it retroactively? It caused a great amount of resentment and ill will among the service providers while I was there for five years.
I am considering a job offer right now from en employer who wants to deduct a 10% product charge from the fee BEFORE calculating my commission. I am not sure from what you’ve written if this is legal or not. I’m in Ohio.
I do know now that, personally, I am not ok with being charged money to work FOR someone. It makes zero sense. However, I am still overwhelmed by the fact that so many of my padt employers and prospective new employers are doing this. It’s difficult to feel like I have options because I need a job.
The percentage of tips things is highly questionable and very likely not legal, but you’ll need to speak with your local labor authority and/or an attorney for a solid answer pertaining to your specific information. (I’m not an attorney and am not qualified to advise you or anyone else on your particular situation.) Should it turn out not to have been legal (which is highly likely), you’ll have to determine what the statute of limitations is on wage theft in your area to figure out whether or not you can take action.
Typically, deducting the cost of product prior to calculating commission is legal so long as you’re aware of the deduction prior to it being made. (It’s coming out of gross sales, not your paycheck, so it’s usually not considered wage theft if you know the details of your compensation arrangement prior to accepting the position, or prior to the pay period in which the change takes place.) In this situation, you aren’t being charged personally to work for someone in the same way you would be if they were pulling those charges from your cut or from your paycheck directly. I wrote a post that links each state’s wage deduction statutes here.
Ok, so I’m unaware of what I am to be considered. Self employed, or an employee? I am solely commission based, I get a paycheck every week but no taxes are withheld, (I pay out of pocket for taxes) I get a 1099 at the end of the year which is self employement. I never get breaks and forced to abide by a set schedule. I need help/advice. I work in a nail salon. This is my first commission based job.
If no taxes are withheld and you’re getting a 1099, you’re self-employed. However, if you’re being put on a schedule, that indicates employment. It’s a common abuse in the industry. I recommend reading this post, this post, and this post.
I am doing the record keeping for my niece that just opened a salon 3 months ago. All her employees are getting commissions. During those three months the salon made $43,200. The math does not adds up. The salon owner made
$11,800 working 6 days a week, say it again 6 days a week
$18,840.00(60% to hair professional plus tips)
$2,200.00 Health insurance for all the employees including her (6)
Total$42,700. Leaving a profit of $500.00, and by the way she has to pay taxes.
I have read most of the comments in your blog and apparently it’s suggest that these salon owners beside being monsters are also making an enormous amount of profit when in fact is quite the contrary. I have recommended to my niece to wait a year and see what happen if not to close the salon. Would love to hear your thoughts.
Read more posts and read more comments. You may have read “most of the comments” on this particular post, but I assure you, you’ve read nowhere near all of the comments or posts on this site, or your impression of it would be the virtual opposite.
Salon owners (even exploitative ones) are not making “enormous sums of money.” Quite the contrary. (If that were true, many of them wouldn’t have to stoop to tax fraud, wage theft, and other labor abuses to break even.) I take tremendous offense to those violations from both an ethical standpoint and from the perspective as a salon owner myself. Employers who commit these violations hurt all of us and our industry. They destroy our local markets by making it difficult to compete specifically because they’re able to abdicate themselves of the rights and responsibilities of proper business owners. I have no use for them or people who defend them. So if that’s your intent, or if you’re here to act as if they don’t exist because your niece isn’t one and you haven’t encountered any in your limited experience in this industry, please stop while you’re ahead.
The commission system is a broken system, which is why your niece isn’t seeing much in the way of returns. 60% is unreasonable and unsustainable compensation that dooms salons to failure.
I suggest you read the following posts:
Greedy Salon Owners
The Commission Failure
Salon Compensation Explained
It’s also a good possibility her prices weren’t calculated correctly, so they may not be sufficient to cover her costs (they certainly aren’t sufficient to cover her costs plus 60% commission), so this post may be useful.
There are literally dozens of articles on this site that she may find helpful, the vast majority of which are written in defense of salon owners. I highly recommend that readers not take any condemnations of illegal, unethical employment practices as personal attacks, unless of course, they’re guilty of committing those acts themselves. (In which case, they’re welcome to take it as personally as they like, lol.)
I am in Florida, unfortunately, and I undersnd that we have very few protections as employees. The spa I work at does not give breaks whatsoever. I am a commissioned employee. It doesn’t matter if I work 6 hours, 8 hours or 10 hours straight… they will book me back to back with clients & they absolutely refuse to give me a break. Is there anything I can do about this?
There’s nothing you can legally do to compel them to give you breaks (unless you suffer from a disability that would require breaks as reasonable accommodation), but you should speak with them and explain that an employee who is hungry and tired is not productive. Over time, you’re going to grow resentful, and that resentment will manifest itself as rudeness to the clients and your coworkers. Eventually, you will get sick of being overworked and will quit, and employee turnover is far more expensive than most salon owners recognize. There’s no excuse for you not to be given a break. Demand one. If they refuse, I’d personally give them my notice.
Im wanting to open a salon where the women are to dress provocitively. This would be considered a gentalmans salon and im trying to find out what the rules are as far as a dress code
Hi Carlin! The same concept has been tried in Vegas a few times (each time it failed–not sure why). Start with your state board authority. They’re the ones who govern those kinds of things. Generally, provocative dress is okay–nudity of any kind is highly unlikely to be. Some states have guidelines against exposed armpits as well. Be aware also that staffing will be difficult, if not impossible. You’re going to be looking for women who are presumably a.) attractive, b.) licensed cosmetologists, and c.) willing to be objectified at work.
Finding all three qualities will be difficult, at best.
My wife is a commission only hair stylist. She works 3 days a week, does not get breaks or lunch scheduled into her work day by the salon owner. If she has to take a day off that she is scheduled to work then the salon owner requires her to make that day up on that week or the following week on a non- scheduled day. Is this normal to have to make up a day missed when you are a commission only employee? And so far based on the hours and wages she is making over the minimum wage rate. Thanks
If your wife is being compensated legally (which it sounds like she is since her income exceeds the minimum wage), then the employer can set her schedule as she pleases (including requiring her to make up missed days). Employers in compliance with federal and state laws have complete control over operational procedures and employee management, and employees have what’s called a “duty to obey” or forfeit their position. That’s what the “at-will employment” legislation is premised on–freedom to manage and freedom to resign. Personally, I think the makeup policy is a little weird and arbitrary, but I don’t know what the owner’s reasoning is for that. It also doesn’t make sense to me that she’s not scheduling lunches, but hey, a lot of what other salon owners do doesn’t make a damn bit of sense to me, lol.
I just accepted a position at Salon where I am 100% commission only. The owner has had me doing hair on models for free and has asked me to attend meetings and help stock products totally unpaid. If I don’t have any clients on the books, I am considered on call and have to be ready to go in at any given moment to see that guest and make commission only. Even if it’s one guest getting a 20 dollar service. It just does not seem fair at all. Is this even legal?
You should read this post, and then read this one.
I own a small day spa with 6 booth renters made up of estheticians and massage therapists. I’m the 7th booth renter of my own business. The renters pay me rent by month. No other fees apply to them (oh except if they choose to use my backbar, they have to pay me $3 per facial if they use my personal supply, their choice though) . They set their own schedule, collect their own monies, supply their own backbar, pay their own taxes, provide services as they see fit, etc. The only area of concern for me is that we share an online booking system. It allows clients to book freely and takes away the need for a “reception service”. They don’t HAVE to use it but we all do. Everyone has full administrator access. It also secures credit cards for clients in the event of a no-show. Now, everyone is supposed to charge clients through their own merchant processors like square. But the “spa” sells gift certificates and we also book couples and for the sake of simplicity I have told them to process clients through my merchant processing for those things. So if a couples massage wants to pay together the total amount is charged as one sum and I just cut each of the renters a check for the total service + tip and I deduct cc fees. Same for gift certificates. The amount goes to a special account and I cut a check to whoever honors it. They’re only supposed to do this rarely. However, I have noticed them processing through it often enough that I am cutting them $1k checks. Not just for gift cards and couples but for regular ol clients who should be paying through their merchants. My concern is that despite how I am paying them the total amount earned (100% +100% tips – 3% cc fees), that the IRS and labor dept may not see it that way and may someday want to classify them as employees. Then I would be ruined. I have contracts with them (although I’ve let them expire recently) that define our relationship. I have asked them to not do that but it continues. I don’t want to have to shut down the system as it benefits everyone immensely. But what do you think? Is this something that could eventually bite me in the ass?
It’s not mandatory, and if they’re IC’s in every other way, I doubt this central booking system would hold much weight. I’d recommend speaking with an attorney and definitely having agreements reviewed and renewed. If the system is working, and you’re not forcing them to use it, I don’t believe it’ll be a problem, but speak to an attorney for clarification.
I work for an Aveda salon in Texas and they take out an astronomical color charge ($6 on a $20 toner). Our owners say it’s something Aveda does, but I don’t believe that since they input the numbers themselves.
We were never told about this upon hire, it’s not in my contract and they just brush it off.
Is this legal? How do I go about handling this and who do I call? I love my salon, but they’ve taken over $1200 in color charges this year alone. Please help!
Are they taking it before the commission is calculated or after? When I worked for Aveda, this wasn’t a practice they implemented, but it wouldn’t surprise me if they were pulling out costs before calculating commissions. However, the amounts don’t make any sense. If this were an Aveda practice, it seems to me they’d have a process for ensuring the fees taken accurately reflected the overhead cost.
Can anyone help me??
So I started at a salon back in October 2018 after leaving my previous salon where I was finishing up my apprenticeship. Long story short I have to start all over. The deal with the owner was I work with her makeup my hours until I can take my state board exam. I have been doing chemicals on clients for over 2 years at the other salon.
Well 4 months in and I no longer could take the verbal abuse and her not paying me on time. I had to take another job and told her I will work only weekends.
Come the first weekend and she lied that the salon was close for the day. I had
clients calling me that had followed me from the other salon asking where I was.
I call the owner only so that she can scream at me over the phone saying she can wash their hair and send them to my house.
I had to apologize to my clients. They were unhappy with the service they got, so they called to tell me.
3 weeks later I go back to take my things thinking she will be over it. Nooo she had a full day and was screaming at me in front of clients. I decided to stay calm and tell her I will be back for my certification that I had to pay for $1500.
Her response was I owed her $5000 and mind that it’s now April and she has yet to pay me February and the first week of March. I talked to the school about the certificate and they said I didn’t have to worry about it as long as I keep going to class. However she had takin over $700 out of my paycheck to pay the school and the school said they haven’t received anything but the $1500 I had paid.
Now I’m afraid to go back because of how aggressive she is.
But I have bills to pay and I’m counting with over $2000 that she owes me.
Any advice???? Should I file a backpay against her? Get a lawyer? Or what?
I recommend filing for the back pay, but consult with an attorney in your area first to determine if it’s worth it to pursue it in civil court. Sometimes, private suits can be faster and more effective for resolving the outside issues (with regards to the apprenticeship and her claim that you owe her money).
What if you have told your boss multiple times that they can’t make you sit around for hours and not pay you, but they just keep saying their accountant says it’s fine? And that the law has changed? I love my boss but having a $36 check for 2 weeks was unacceptable (I work between 25 and 30 hours a week because I’m back in school). What else can I do??
That’s a typical deflection tactic. Explain to them that accountants aren’t qualified to advise them on labor law issues, as they are not attorneys. It is entirely possible the accountant told your boss that. I’ve seen accountants steer salon owners wrong over and over again. Tell her that if she doesn’t believe you, she’s welcome to book an appointment with me, but her “accountant” has put her in significant legal peril. Any rational person would be infuriated by that and would want to a.) correct the issues, and b.) hold that person accountable somehow. If she’s so convinced she’s right, tell her you’ll file a complaint with the labor board and have them investigate.
I am opening a small rental salon soon and am wondering how much you suggest I offer for commission on product sales? The salon I currently rent a chair at does $0-150 sold you receive 10%commision. $151-250 and above you receive 15% commission. These totals are for weekly sales, you start again each week.
How much you offer is really a matter of preference. 10% may motivate some professionals, but if you really want them to sell and get that product moving in the midst of this e-commerce and big box store nightmare era, I’d start the scale at 15%. Remember, as renters they could easily start an online store and completely circumvent you with zero investment beyond creating an account on whatever sales platform they choose. I’d give them incentive not to.
SO glad I found this column. The spa I work at was recently sold and the new owner recently hit us with what looks to be a “product fee”. We are massage therapists btw…we look at it as a pay cut in commission. Is this legal in Illinois? I couldn’t find product fee info in the state info…Thanks!
I does not appear to be legal. Here’s the information you need for Illinois. Scroll down to “Deductions from Wages.” 🙂
I am thinking about bringing a part time makeup artist into the salon. We have come to the agreement of 50% “commission” but I know this is more of a freelance situation. Is this legal? It it acceptable for me to ask her to use a specific makeup line that I supply?
It sounds to me like you’re trying to get the best of both worlds. It doesn’t seem as if it’s an appropriate use of the classification. (If you’re in California, it most certainly won’t pass their standards.) If you’re telling her what brand to use, scheduling her to work part-time, paying her as if she were an employee, using her services routinely, and having her fill a void an employee would normally fill, she would need to be classified as an employee. Here’s the 20 Factor IRS test. I suggest you review that.
I came across your website and I found it super useful.
But I’m still a little conflicted.
I work in a studio.The owner is a stylist as well.
She promotes us and our work on her instagram hair page and has clients book us through her app.
I’m only there 3days. We obey client discounts she puts out and we work according to her pricing. She provides all tools-materials shampoo bleach etc. Me and the other stylist both have our own social media profile and sometimes do work on our own outside of the studio like home.
We get paid by commission only.
60% for her(the owner) and 40%(stylist). She expects us to clean and handle laundry etc. She just recently asked us to fill out a W9form-Independent contractor.
I have to questions;
1. Is this correct for me to fill out?
2. Is it right for her to ask me to
to quit that and stop doing hair services outside of her studio?
If you could orient me with anything else I should know I would gladly appreciate it!.
No. You are not an independent contractor and should not be classified as such. I recommend reading this post, this post, and this one.
I’m in Ohio and we just found out that our boss has been taking his 40 percent share of the commission off not only our services but our credit card tips. He has refunded us some money for this year claiming payroll send him an email in January. Upon further investigation we found out he did it all of last year also. Who would we contact about this because we feel like it has been going on since the salon opened 7 years ago?
Yikes! Immediately contact the state labor authorities. I would also recommend filing a complaint with the federal Department of Labor. Typically, federal agencies collaborate with state officials, but they’re very underfunded and take forever to do anything. You’ll likely receive faster action from Ohio–but filing with both certainly won’t hurt.
Typo in 3) Employee not Employer
Thank you so much for catching that! When you use those words so often in one section of an article, it’s easy to fatfinger that “r” instead of an “e.”
I am a booth renter. I just signed a contract saying I agree to use the product line of the salons choice and whatever product I sell, they get 50% of the profits. However, they stock all the product I would need and I buy wholesale from them at checkout to sell marked up to clients. Someone told me this is legal because I buy at checkout (so they take the risk with inventory costs) but if I bought before checkout then it’s not legal? The salon has also told me I don’t need a business license or liability insurance because their license/insurance covers me. I feel wrong somehow about this. Is this legal? Can they take 50% of profits from product I sell? I live in Utah.
Don’t trust them regarding the liability insurance. Their policy might cover you, but I don’t recommend counting on that. I’d also recommend that you get your own business license. You don’t work for them and you’ll likely need the license to open a business banking account and file your self-employment taxes (if you want to keep your business and personal finances separate, which I also highly recommend).
You can’t be required to use their product line. That’s an overstep. You’re self-employed. YOU choose which products you use. Period. You also can’t be required to purchase products from them. Again, you’re a business owner. They can’t tell you where to purchase or what to purchase.
Salon landlords can require you not to compete with their retail offerings. Many salon landlords prohibit renters from selling retail, as their retail boutiques help to offset operational costs and keep rent down for the tenants–however, everything else going on? Definitely not appropriate and for SURE a violation of your autonomy as a self-employed person.
thanks so much for the response and this incredibly helpful blog!! If I do end up purchasing product from them, are they allowed to take 50% of the profits?
Do you mean if you buy their product and then resell it to one of your clients? No. If you purchase the product from them, the product is yours to do what you like with. I don’t understand how they can justify charging you retail and then taking an additional 50% of the revenue from the sale on top of that.
So I’m an employee stylist in California, can my salon add on a “service charge” to the total of the service cost to cover the product costs?
My pay structure is hourly based on revenue per hour and the additional charge does not count as my revenue per hour. For example, my client will pay $48 for a cut but my revenue per hour is based on $45 for the cut
Yes. These charges are assessed to the client–not the employee. So long as you were made aware of the method by which your compensation is calculated prior to performing any work in the pay period, those service charges assessed to the customer are likely legal.
I have a question more than a comment.. if you get off at 5 and they’re other stylist on duty but it’s 4:55 my salon makes you take another guest. Knowing the cut cleaning up then your salon task will take you well past 5. Although your still on the clock is forced overtime legal practice.
I don’t know of any states or cities that prohibit forced overtime, but it really does feel like something that should be illegal.
Hello Tina, I just came across this site this morning and would like to share with you my experience. The owner of the salon pays us by check with the standard federal state deductions. Product charges are removed such as color, bleach and toner before paying with check. We are required to supply our own products at our stations. I am on commission and am required to sit there without salary. I’m confused. If the owner tells me I have to stay is that Legal? We are required to arrive 15 minutes before our shift. It seems we answer the phone or check out clients for that 15 minutes. We have to wash towels all day, clean the seated dryers and shampoo bowls and seats and clean our station and mop our station and clean the back room and sink and fold existing towels in dryer at the end of the day. So that is more time added to our shift after we’re off. There is a manager/receptionist that comes in later after we’ve started work and leaves before we are finished with our shifts. We are constantly asked to watch the desk and make appointments and checkout client etc. while our clients are in our chairs at times, so the manager can eat in the back room or makes personal phone calls. I’ve worked many a day without eating and doubled booked, they keep adding clients with no assistance. I’m not young anymore but I do younger clients with long hair often. I see a massage therapist every other week to prevent injuries from over use. Business has slowed down for the past year and even for the owner, but blames us and for non repeat visits. I have now dropped a day because of too much inconsistent sitting without pay and my commute is long to and fro. Often my clients contact me to get in and I write them down on the book and this is an issue with the owner. The owner will book me after I’m scheduled off and not ask me first if I would stay later. They will book me an early appt and a late appt and I’m wide open for 5 to 6 hours. We are paid biweekly and often are paid a week later due to the owner being on Vacation. I live far from the salon and have to commute to retrieve my paycheck to pay my bills. When the owner is in salon on payday I have to ask for my check several times and it’s degrading. The owner travels for two weeks at a time at the minimum of 6 times a year with shorter vacations between. I have brought it to the owners attention and it doesn’t seem to help. The owner has promised to take business owner classes on approaching employees with issues in a constructive positive environment but to date has not. There are derogatory notes taped everywhere on how to do things correctly, but not one that says thank you for all your hard work or for going the extra mile or teamplayers etc. Thank you for taking the time to read this.
Hello! I recommend reading the following articles:
Know Your Rights
Independent Contractor Defined
The 20 Factor IRS Test
It sounds to me like you are misclassified, but you should read those articles and compare the information to your situation. It also sounds to me like the salon owner is a terrible manager who probably isn’t worth bending over backwards for. If I were you, I’d be looking for employment elsewhere, not just because their practices are questionable, but because their management style is atrocious.
Grateful you are a passionate advocate for both owner and employee.
I recently came across your site and have read some very interesting things. But, I unfortunately have some issues with my own salon that have recently came up. I need some advice!
I own a salon in Illinois. The salon is Esthetics and Massage Therapy. Rental only. I have no written contract between and of the girls (I know :/ not a great thing) I recently have asked a girl to leave and it was effective immediately. I have had numerous complaints from clients about possible drug use and my other girls often are taking the weight of how lazy she is. (Garbage, laundry) Her room she rents in disgusting! and I’ve also had complaints about that and that’s not how my salon operates or how I want it to be seen. I take pride in how clean we operate! Since I have asked her to leave she has threatened to sue me. I just want her and her stuff out but she is refusing to remove her things. I have had locks changed because the morning after she was told this, I have video surveillance of someone entering my salon before operating hours. So for protection, my property owner made the call to do so.
Can you please help guide me…I’m so overwhelmed! I do have a lawyer if needed.
In the absence of a written contract, assuming you have no local commercial landlord/tenant laws, you have a common law agreement. Common law agreements in rental salons typically only persist from payment to payment. (So, if your tenant pays rent once a month, you have a month-to-month agreement. If they pay once a week, it’s a week-to-week agreement.)
I recommend seeking clarification with an attorney who knows your specific situation and your area’s laws, but I believe you’re within your rights to evict her. To be on the safe side, don’t trash her stuff until you speak with the attorney. (You don’t want to run the risk of committing theft through conversion.)
I work at a salon/spa as an independent contractor. The owner won’t accept tips for us using her credit card merchant account because she says since we are independent contractors, she can’t accept them or we will be considered employees. But when she does decide to take a credit card payment OR a check for a tip, she charges us a credit card processing fee.
My question is, does this really make us not a contractor or is she just trying to keep her sales down so the credit card processor doesn’t increase her fees? It’s just so unprofessional and tacky to come chase us down when our client is ready to leave so we can run a credit card tip through our own app (Square, etc.).
Thanks in advance!
It sounds to me like this credit card issue isn’t your biggest problem. It seems as if you aren’t proper independent contractors at all (especially if you’re processing sales through a central location and/or terminal and having the owner pay you routinely like employees). I recommend reading this post, this post, and this post.
Thank you so much for the”Punch in the throat”and your honestly. I was a union President, my daughter a cosmetologist/barber, it hurts me to watch her trying to earn a living in barber shops that violate (blatantly) labor laws that protect. She has been fired illegally, no due process, paid without taxes withheld…yet, what is the ultimate answer, when to obtain employment in her field these practices prevail…especially in barber shops! No earnings to save and far away from ownership of her own.
I would like to be part of the good fight of this ugly business.
Current place of job…
Owner offer 40/60 commission split…after three weeks, (she does about three customers daily so far) he states, “That is it you are now a booth renter that will be $175 weekly”. Or $700.00 month. She barely makes transportation costs to date. If you are late there is a $25 dollar late fee!
My advice turn down offer of illegal booth rental.
I am of the opinion this ugly business needs solidarity and more activists…what can I do to help?
Retired and available.
I completely agree. I’ve repeatedly told professionals in this industry that if you can’t find legal employment, take a job doing literally anything else until you can. (Or swallow your pride and go work in a corporate salon, I don’t care how “uncool” they are.)
The biggest thing you can do to help is to meet with lawmakers and make them extremely aware of how these practices are hurting tax revenue and creating additional burdens on the system, all for the personal financial gain of these salon owners. Many of these professionals (a majority of whom are women) just want to make a living doing what they love. They shouldn’t have to accept abuse to accomplish that.
Hi there ~
I work in a commission only salon. Beginning stylist receive 40% and it goes up to 50% . The salon owner requires a set schedule. Some days we work a mandatory 9 am to 8 pm. We are required to clean , mandatory meetings, salon promoting type events.. ect. She does not pay a draw of any kind. I’m also aware that some of our managers are salary and are not compensated over time. I love my boss but I don’t think this is legal. If I work a 9 to 8 and see no clients i am still required to clean and such and receive $0. Is this legal??
If you’re not being compensated at least the prevailing minimum wage for each hour you work in a pay period, the employer isn’t in compliance with wage and hour laws. In America, nobody works for free.
Hi! Thanks for all the information that you have made available on this site. I just found out that my salon has been taking these “service fees” out of my paychecks for the last 4 years. I was not aware of these until just this year. We do not get an itemized pay stub in our checks so Ive never really questioned it. Last paycheck I asked to see the pay stub and there they had a column for the service fees,$240.00 for a two week period. And I found out that last years total was $5,000. If it wasn’t for this site I would prob think that was just the way the do business, but because of you I have contacted and lawyer and I’m hoping to have that money paid back to me.
But now I don’t know how to go forward. They are still telling me these fees have been in place for years and it was in the contract. And basically they are not changing the fees. I want to continue working there, but I don’t want to pay the service charge fees. Can they still keep taking them out? And what about my other coworkers who are being charged. Should they be reimbursed also? How can I get them to stop taking the fees out? Does my attorney have to handle that also.
The company is basically saying you didn’t know about those fees then so we will pay you what we took out to stay out of court, but you know about those fees now so this is what it is. Can they still do that?
Whether they’ve been doing it “for years” or whether it’s “in the contract” isn’t at all relevant. Doing an unlawful thing for a long time and putting it into a contract doesn’t suddenly make it legal. Your attorney will likely want to speak with your coworkers to determine whether it’s worth it for you all to go in together (or separately at the same time) against your employer.
They can’t continue to commit theft just because you consent to it. Whether or not you agree to it, it’s still illegal. If you were to take them to court a second time, you’d win again–only this time, they’d lose a whole lot more since you’d have a documented history of wage theft and an out-of-court settlement proving they knew better (which will make their future theft of your wages “willful,” resulting in much bigger consequences).
Don’t tolerate this shit. Employers like this get away with literally stealing from their employees unless professionals force them to stop. Labor rights workers fought really hard for us to have the power to call upon state and federal agencies to support us in these situations, so take advantage of it. I know you want to keep working there, but I would highly recommend against continuing to work for people who think they can steal from their employees.
Is this right??
As of 2019 we were given a 1099. We are paid commission. Nothing has changed we are still being paid commission and paying a lot of taxes but we have nothing to write off. All of our products and color are still paid for. What I was wondering can I write off the remaining commission as a tax write off , since we have no booth rental?
I would speak with a Enrolled Agent. If you’re “being paid” routinely by the same salon owner you’re not an independent contractor at all and shouldn’t be receiving a 1099. Read this post for more information on that.