Do you know what your rights are as a beauty professional? The terminology can be confusing. Are you classified as an employee or are you considered self-employed, and what’s the difference between them? Where do booth renters fit into all this?
This article defines the common roles and classifications found in the beauty industry and outlines common abuses all professionals need to be aware of. Know what your rights are in your workplace.
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In a salon, you are either self-employed or an employee. You can not be “half” anything.
Employees are on the salon’s payroll and are usually paid hourly, commission, or some combination of both.
Employees
Employees come in two varieties: exempt and non-exempt.
Unless they’re salaried in compliance with the FLSA (or state/city legislation), employees are considered non-exempt, which means they’re entitled to the prevailing minimum wage and overtime wages.
Salaried workers are considered exempt from the prevailing minimum wage laws and overtime laws, but they’re still typically protected by the other provisions of the Fair Labor Standards Act.
Are salon employees required to be paid minimum wage and overtime?
Regardless of the compensation method (commission or hourly), employers must generally ensure to pay their non-exempt (non-salaried) employees at least the prevailing minimum wage, whether the employee is working on a client or not.
Who pays the taxes? What tax form does a salon employee receive?
Each paycheck, employers are required to withhold the employee’s half of their employment taxes. The employer matches the employee’s contribution by remitting the other half. That equal tax contribution is the price employers pay for full control over the employee.
Employees receive a W-2 at the end of the tax year.
What benefits do salon employees receive?
Employees are generally covered by worker’s compensation, unemployment insurance, and the salon’s professional liability insurance policy. They are also entitled to numerous protections offered by state and federal agencies like the Equal Employment Opportunity Commission, Internal Revenue Service, and Department of Labor. Salon owners are not obligated to provide any benefits beyond those mandated by law.
Do salon owners need to track employee hours?
Yes. Time tracking is a mandatory federal requirement, so salon employees need to be clocking-in and clocking-out daily.
Is a salon professional an at-will employee?
All U.S. states consider employment at-will, which means employees can quit at any time. They can also be fired at any time for virtually any reason, so long as it the termination isn’t discriminatory or retaliatory.
What is an employee’s role?
Employees are required to follow their employer’s directives. This means employees must:
- work the employer’s schedule,
- adhere to salon policies and dress codes,
- use whatever products the salon requires them to use and perform services in accordance with the salon’s protocols.
Employees are also required to participate in promotional events (discounts, coupons, etc.), continuing education, and mandatory meetings.
Does the salon owner have to pay salon employees for mandatory meetings, training, and promotional events?
Yes. Any time the employer requires an employee to be present, that time is compensable and the employee must be paid.
Do salon professionals compensated by commission have to do work they’re not getting paid to do, like cleaning, answering phones, and doing laundry?
If you are being paid commission versus or commission plus hourly, your employer is FLSA-compliant. You are being legally and properly compensated for your time spent performing chores and other duties, since your employer is ensuring your wages meet or exceed the prevailing minimum wage.
If you are working for a salon owner who is not FLSA-compliant, then you have no obligation to obey the so-called employer, since you are not being legally compensated.
Can the salon owner require employees to stay in the salon when they have no clients booked?
If you’re a W-2 employee and the salon owner is FLSA-compliant, you are obligated to obey your employer or forfeit your position.
If you are not a properly classified employee and the salon owner is not FLSA-compliant, you have no obligation to obey.
Does the salon owner have to provide supplies and products to their employees? Is it legal for the salon owner to deduct fees from my paycheck?
The employer provides all supplies and products. Employers, in most states, are not permitted to arbitrarily deduct money from the employee’s wages to cover cost of doing business expenses, like product.
Who collects the money?
An employee’s clients pay at a centralized location, usually at a reception desk. Aside from tips, employees are never paid directly by customers.
Who controls the client contact information and the appointment book?
The employer is legally entitled to control and retain the salon’s client contact data and may prohibit employees from taking that data or using it to harm the business.
Self-Employed Professionals
What does it mean to be “self-employed” in the beauty industry?
If you are self-employed, you are a business owner.
Self-employed professionals run their own businesses and are completely independent from the rest of the facility in which they work. Booth, suite, and studio renters are commercial tenants who lease space. Freelancers often perform session work or special events for a wide variety of companies. Many professionals who freelance are also renters or salon owners.
Self-employed professionals are entirely responsible for acquiring new customers, providing their own supplies, managing their clients, securing their own benefits, and paying their own taxes.
What is the role of a self-employed beauty professional?
Self-employed professionals keep 100% of their revenue, pay for their own product and supplies, set their own prices, and work on their own schedule at their own convenience. They answer to nobody. To clarify, this means that self-employed professionals:
- choose which products they are going to use and sell
- perform their services however they please, and
- have their own salon management software.
Who collects the money?
Clients pay renters (and most other self-employed professionals) directly.
Under no circumstance should a client of a self-employed beauty professional be paying a salon landlord, nor should the self-employed professional be receiving a paycheck from their landlord.
Who controls the client data?
Self-employed professionals are solely responsible for booking their own customers and maintaining their client data. Nobody else is entitled to that information, nor can anyone require them to turn that data over (for instance, as a condition of their rental agreement).
Can a renter or self-employed professional be fired?
Renters cannot be fired. They must be properly evicted in accordance with the lease agreement or the state’s commercial landlord/tenant laws.
To a renter, a salon owner is nothing more than a landlord.
It’s important for salon landlords to understand that they cannot:
- dictate a booth renter’s schedule,
- force the booth renter to have their clients pay for their services at a centralized location (like a reception desk),
- tell a booth renter what products to use, how to perform a service, or what to charge for their services,
- force a booth renter to participate in a promotion or coupon unless agreed upon in writing.
- “fire” a booth renter,
- force a booth renter to adhere to a dress code or other salon guidelines or rules, or
- require the booth renter to use the salon’s branding or promote the salon’s name in any of their marketing materials.
Do freelancers and renters get benefits?
Self-employed professionals must secure their own benefits. In addition to being ineligible for benefits, self-employed professionals are also not provided any state or federal protections from agencies like the Department of Labor or the Equal Employment Opportunity Commission.
What are renters entitled to?
Renters are only entitled to whatever their written lease agreement guarantees them. Renters are not entitled to free rent for vacation time, free backbar, or anything other than the space they’re paying for. Additionally, salon landlords are not required to provide renters with a clientele.
Are booth, suite, and studio renters required to have a key to the building?
The IRS no longer makes key-holding mandatory. As long as the renters have access to the building during the operating hours stated in their lease, they are not required to have keys. (And yes, renters and salon landlords, both of you need written leases.)
Who pays the taxes?
Self-employed professionals, in exchange for the freedom to operate their businesses without interference or control, pay the entirety of their self-employment tax.
Can a salon landlord prohibit a renter from selling retail?
If the landlord has a retail store in the salon, they can put a clause in their leases preventing tenants from competing with the retail store. Salon landlords cannot require tenants to retail their products, however. For a lot of landlords, retail boutiques help keep the business profitable (and keep tenant rent competitive).
Independent Contractors
Independent contractors are not employees. They are self-employed, just like renters and freelancers. Most independent contractors are illegally misclassified in this business.
Independent contractors almost never belong in the salon.
Independent contractors do not go to work every day, all day long, at the request of the salon owner. Much like a renter, independent contractors operate independently, free of control from the business owner. The salon is typically not their only place of employment, they are not leasing space, and they are not on the payroll.
Independent contractors are contracted, responsible for all of their own taxes, and do not answer to a salon owner except to ensure the contract terms have been fulfilled.
Independent contractors must be provided with a 1099 form at the end of the year by any person who has contracted them and paid them more than $600 in that year. That person may be the owner of another business (for instance, a corporate office that contracts a massage therapist to perform chair massages for special occasions or a photographer who routinely contracts an MUA for shoots) or a private customer.
Can an independent contractor (freelancer) be fired?
Independent contractors are not employees and therefore cannot be fired or controlled through the threat of dismissal, but they can be dismissed from a job site if they break the terms of their work agreement.
Freelancers sign work agreements, agreeing to perform a one-time job.
In our industry, freelancers are exclusively found on-set (fashion shows, photo shoots, film projects) or at special events (corporate parties, bridal showers, etc.).
I have written about this topic to death. If you remain subscribed to this blog, you’re going to be so informed about the abuse of the independent contractor status that tax attorneys will be awed by your knowledge, so for now, I’m going to tell you the four most important things you need to know:
1. Salon owners often use the independent contractor classification to evade employment taxes.
When exploitative owners classify professionals as independent contractors, they’re shoving the entire employment tax burden onto the professional, who will end up paying at least 15.3% of their income to the IRS at the end of the year. A good deal of these salon owners aren’t aware that this practice is illegal, but the IRS and DOL don’t care. Business owners are expected to do their own homework and make informed business management decisions.
As a worker, you are not expected to suffer for anyone’s failure or inability to perform their own due diligence.
2. Salon owners utilize the independent contractor classification to avoid wage and labor compliance.
When a person is self-employed, they’re generally not eligible for worker’s compensation, unemployment, the required minimum wage, overtime wages, federal protections against workplace discrimination and retaliation, or any of the other benefits they would be entitled to if they were employees.
3. Never let a salon owner tell you this classification is “better for you because you won’t have to pay taxes.”
Trust me, you will have to report your income and pay your taxes. In reality, this situation only benefits the salon owner, because they get to control you like an employee and skip out on worker’s compensation insurance, employment tax, wage obligations, and the other responsibilities and liabilities that come in exchange for that degree of control.
4. Misclassification of employees as independent contractors is a crime.
State and federal governments take tax evasion, wage theft, and labor abuses pretty damn seriously. They take them so seriously they team up and perform joint investigations. Whichever agency is initially alerted (whether it’s the IRS, the DOL, or your state labor board) will alert the two others. They will join forces in what’s called a “three pronged investigation.” (I call it the Hell Trifecta.)
Unless you are truly a freelance professional, following the money wherever it may be and setting your own terms working under your own brand, you are likely not an independent contractor, and no salon owner will be able to twist the truth enough to justify tax evasion and labor abuse with the IRS.
The only way this pervasive abuse stops is if we stop allowing it to happen in the first place.
If your employer has been misclassifying you, read this post to learn how to approach them respectfully about correcting their practices before it’s too late.
Take the Courses
I’m introducing a full online course! Part 1: Foundations, covers employment law (worker classification, common exploitation tactics, and everything your school didn’t teach you about working in the beauty industry). In Part 2: Contracts, you’ll learn all about employment contracts and lease agreements, including how to identify illegal and abusive terms, negotiate, and heed serious red flags. Bundle both classes together and save!
Recommended Reading
Recommended Tools
The Salon Employee Suitcase. The Salon Employee Suitcase contains
everything you need to get acquainted with your rights as an employee and protect your wages, so check it out.
The Microsalon Owner’s Complete Business Toolkit is our biggest, baddest download to date, containing an absurd amount of information and a valuable pricing spreadsheet for self-employed salon professionals.
A quick message to the rabid keyboard warrior salon owners: before commenting here (or anywhere on this site), do yourself the tremendous favor of researching me and what I write before you decide to make a fool of yourself. I’ve written over 300 articles, many in defense of salon owners. I don’t play favorites here. I call bullshit like I see it.
If you don’t like the laws, take it up with your congressman. I didn’t write them, but I expect you to obey them like every other business owner in the country.
FAQ for Salon & Spa Owners
“I’m a salon owner and a booth renter is causing serious problems in the salon. Can I terminate her contract before the renewal term?”
If there is a clause in the rental agreement that states that the owner can terminate the contract at any time, yes you likely can. If not, you must abide by your state’s commercial landlord/tenant laws, if any exist. To save yourself the aggravation in the future, consider having your attorney write termination provisions into your future rental contracts.
“My employee brought her clients, can she take them with her?”
It depends on whether or not the employee signed a valid non-solicitation agreement (not to be confused with a non-compete agreement).
You don’t want employees coming into your business and taking clients from you. Treat your professionals as you expect to be treated and do not take from them what isn’t yours to take.
“Help! My employees are copying my client’s contact information for their own records! What can I do?!”
If you had them sign non-solicitation agreements, you can likely cease the activity immediately and threaten termination and/or legal action. If you didn’t have them sign anything, there’s likely not much you can do about it, but you should damn well try.
“I run a booth rental salon, do I need to provide keys and security codes to each renter?”
The IRS no longer makes keyholding a requirement. Whether or not you are legally required to do so depends on your state’s commercial landlord/tenant laws. Consider electronic deadbolts. Give your renters passkeys for 24/7 business access. Charge extra for it.
“What is the best employment and compensation arrangement?”
Here is an article I wrote regarding compensation methods and which I believe is the best.
FAQ for Booth Renters
“Can the salon owner fire me?”
You’re not an employee, so no. A landlord can never really “fire” you. (That’s the wrong word.) They can, however, terminate your lease. Read your contract carefully to find out if there are any clauses that allow them to terminate without notice and check your state’s commercial landlord/tenant laws.
“The salon owner sold the business and the new owner is trying to raise my rent. Can they do that?”
Probably not. Generally, they have to abide by the original lease agreement or renegotiate it with you.
“Can the salon owner tell me what products to use or force me to go through their training program?”
No. You are your own business owner. You choose the products, you choose the services, you set the prices. You are not required to go through any training or adhere to any rules the owner sets forth.
“Can the salon own force me to participate in promotional events or take coupons?”
No. You can participate if you want to, but requiring you to would likely constitute an inappropriate degree of control.
“Do I have to put the salon name on my business cards?”
No, and you shouldn’t. Keep your business separate from the establishment you’re leasing from. You are your own business.
DO NOT ADVERTISE A BUSINESS THAT DOESN’T BELONG TO YOU.
You can say you’re “located inside of [insert salon name here]” if you’d like, but don’t use their logo.
“My boss has me pay a percentage of my daily service sales as rent. If I make under a certain amount, my contract says I have to pay a set amount. Is that legal or fair?”
That depends. As of the updating of this article (December 6th, 2022), I cannot find any laws to dictate otherwise.
As a rule, your rent should not be variable since the value of the space doesn’t change from week to week. I will say this though: if you’re new talent just out of school or you’re getting back in the game after a long time out, it may be beneficial for you to start out on profit-share in lieu of fixed rent during the time you’re building.
Keep in mind that you are still required to provide your own products, manage your own books, and promote yourself, so your rent should reflect that (you should be paying out 15-20%).
A lot of owners won’t offer this opportunity to stylists because it is hard to track and puts them at a financial disadvantage, but some kindhearted, generous owners do offer it. If you’re an established pro and the owner wants 40 or 50% of your commission as booth rental–no. Get out of there.
Owners, in five out of six IRS revenue rulings, salon landlords who took a percentage of gross sales in lieu of rent were determined to be employers; not landlords. If you don’t want to find yourself in a position where you have to pay back wages, back taxes, and penalties, avoid the practice and take a flat rental amount.
“Can I claim my booth rental as a business expense on my taxes?”
Yes. It is a business expense.
“Do I have to carry my own salon insurance?”
Technically, yes. Salons usually provide general liability and property insurance while the booth renter is asked to provide their own professional liability. Many salon owners will provide professional liability insurance as a courtesy, however. Check with your salon owner to make sure that you are covered. If not, shop around for a plan. Quickly.
“The owner wants me to use her receptionist and have my clients pay at the front desk. She is then going to write me a check for the full amount. Is this legal?”
DO NOT. This puts the salon landlord in an extremely legally perilous position. Your clients pay you. They book appointments with you. Do not hand your money over to anyone else for any reason. You are a self-employed business owner. Keep your business separate from the salon owner’s.
FAQ for Employees
“Can I notify my clients that I’m moving to a new salon?”
That depends on several factors. Are the clients yours? Were there any stipulations in your employment contract that say you can’t market to the clients?
In order for a client to be “yours” you have to have brought them with you to the establishment from your school or prior place of employment. Clients you gain through referrals from these clients fall into this category as well. These are clients you obtained through your own networking and advertising, so they belong to you and you should have their information kept in a safe place at home. Those clients who are loyal to you are going to want to know where you’ve gone.
I’ve seen it happen a thousand times when a stylist leaves and doesn’t notify their clients. You know who else doesn’t notify their clients? The owner. Generally, your appointments will get shifted to whoever is available and the client will only discover that you’re gone when they show up for their appointment. In almost all cases, the owner will not divulge any information on where you’ve relocated to in an effort to retain those clients (definitely a bad move on their part because the clients do not appreciate it). Your clients are your paycheck. You work hard to build that book so keep it together and protect it.
Now, if the clients are people that you’ve gained at the salon, there is a whole different set of rules. Say the client walks in off the street or calls because she saw an ad in the paper. This client was obtained through the owner’s networking and advertising tactics and this client does not belong to you.
It doesn’t matter if the client has been seeing you for five months or fifteen years. If they initially came to the salon because of the owner’s marketing, their contact information belong to the business–not you. It is unlawful and incredibly unethical to try and lure these clients away from the salon and yes, your ex-employer can take legal action against you for it (as they should).
“I was fired from a commission salon. Can I get unemployment?”
Whether or not you’re eligible is debatable and situation-specific. Whatever you do, do not ask me about it. Ever.
“Can my boss require me to provide my own product?”
As an employee, providing product is their responsibility. If there are products you prefer to use, you will have to get permission from your boss and pay for it out of your own pocket. (A lot of owners will accommodate you however, if you have a preferred product that you absolutely can’t work without. Many of them understand. All of us have a few of our favorites.) Most states have laws in place to protect employees from unlawful paycheck deductions, like head fees, service charges, or product fees.
FAQ for Independent Contractors
“Can the owner make me stay if I have no clients?”
No. You are an independent contractor. You are not required to do anything other than the services you’ve been contracted to perform.
“Can the salon owner make me sign a non-compete agreement, making me exclusive to that establishment?”
As an independent contractor, you can work at every salon and spa in town if you want and freelance on the side. You are not obligated to any of them.
“Am I required to perform work I’m not getting paid for? (Like answering phones, cleaning, and folding towels?”
Independent contractors perform services. That is it. It is courteous to pick up after yourself and leave the treatment area in the same condition you found it, but outside of that, those jobs are the responsibility of the business owner.
“Am I required to supply my own product and equipment?”
If you prefer to supply your own product and equipment, you can, but it will be at your own expense. A business owner is not required to cater to your preferences. However, you can (and should) charge them for the product expenses.
“The owner handed me her contract. I’ve read it and I absolutely can’t work under her terms. Can I back out without a penalty?”
Yes, as long as you haven’t signed the agreement.
General FAQ
“The owner wants me to sign a non-compete contract. The contract states that I will not work at any other spa while working at her business. The contract also says that I can not work in the same town or market to the spa’s clients. It also says that any clients I bring to the spa become the property of the spa and that I can’t take them with me if I choose to move on. Can they really enforce this?”
Generally they can’t because most states consider non-competes that restrict employees from working in the same town to be unconstitutional, but in no case should you ever sign a contract like that. Ever. Never sign anything that could impair your ability to work. Here’s an article on non-compete agreements.
“My boss doesn’t do payroll. They pay cash out at the end of every day or week. Is that legal?”
It’s shady. If they’re not doing payroll and they’re paying you cash, they’re not claiming you as an employee. Your taxes aren’t getting paid and they’re putting you in a bad situation. In addition, many states have laws regarding how payroll is handled and reported to the employees of a particular establishment.
Let’s talk!
If you have a question that isn’t answered here, or a unique situation that you’d like to discuss, email me to make a consulting appointment!
756 Responses
Can a salon owner require the booth renters to pay a portion of the salon’s insurance premiums separate from the booth rental fee?
No. You are a business owner. You choose what professional liability insurance policy you want and pay the price you choose. They cannot force you to pay for a policy they select.
Sorry to the person who’s post I’m commenting on, this is the only way I could figure out how to ask a question.
Tina, hi! ^_^
I am an esthetician and I’m now hired as an independent contractor at a local day spa with a couple locations. All of the service providers (massage therapists, nail techs, and estheticians) in the company are independent contractors. This article has been so helpful but I’m still very confused because I am new to the whole independent contractor concept. I don’t know about the others but the estheticians there only make 25% commission starting out and can only get up to 35%. Are we being taken advantage of? Also can they legally tell us how to dress (ie. black scrubs) and that we can’t have piercings, tattoos, and different/abnormal hair colors? They check in and check out our clients and they book appointments. They have told us that we will be on the “top of the list” to receive appointments that aren’t requested to anyone in particular by basically getting points from “good behavior” (ie. helping with laundry, helping clean, being early, staying late, not leaving if we don’t have clients and staying throughout our scheduled times while doing those things, coming in when they need extra hands) Can they legally do this? Also they have us put our desired hours in so they can have our books open for those times. Can they tell us we have to stay the entire time? Originally I thought we could only work a certain number of hours but since they informed me that wasn’t the case I now put open to close for all the days that I’m there (which is 5 to 6 days a week) Can they penalize me for not staying the whole time with no clients in the books or when I’m don’t with the only clients I have for the day? Finally, I don’t want to overstep my boundaries and I love this job so at what point can they fire me?
Hi Kristina! You have to be classified as an employee for an employer to make those demands of you. Currently, you’re being misclassified. Technically, they can fire you at any time for any reason (or no reason at all) since all states (except for Wyoming for some reason) are at-will employment states. I recommend approaching them about this diplomatically, but be prepared to be terminated if you do.
Unfortunately I was terminated for even asking questions. Sadly they had been “training me” without pay for two months while I waited for them to open and I had turned down other opportunities for them too. Lesson learned. I wish I could do something, though I don’t really know what, because there are a lot of people being taken advantage of by this company.
Well, you certainly could file a labor complaint with your state labor authority (and I recommend that you do). Training without pay is a huge violation of federal labor law, and one they’d likely see massive penalties for on both a state and federal level.
Okay so what do you do if there is a breach of contract on the owners part? I work at a salon that is “booth rental” in reality it’s commission based and the salon owner isn’t matching taxes. Yet feels she is our boss. This week we were told she was decreasing our commission because she was losing money. We argued that it was a breach of contract, she wasn’t responsible for an hourly rate during dead hours, or taxes, and that this wasn’t even legal booth rent. She refuses to match taxes or to let us have a flat booth rental rate. And told all of us to accept her offer or leave and that the changes would be made on our next paycheck and that we needed to sign another contract. I’m aware I should run. But this is the second salon owner that I’ve worked under who operated in this way(the first changed the contract four times within a year of me working there). And I have also had numerous interviews with salon owners in town and they all seem to operate in the same “booth rental” yet commission based manner. What can I do?
Yikes. First, you should file an SS-8 with the IRS. You’ve been misclassified, so you’re due back taxes, unpaid wages, and unpaid overtime. You definitely need to run, and if I were you, the first place I’d run to is a corporate salon (people knock them, but if you’re ambitious and want benefits, they offer advancement opportunities and health/dental, and of course, they actually compensate legally). Your alternate option is to go the pricier route–studio rental. Unless you’re in a super small town, I’m willing to bet you have a studio rental complex near you. The major chains (like Sola Salon Studios) know their role. They won’t interfere with your business. They will lease you the building and collect your rent–that’s it. However, if I were you, I’d be heading out ASAP.
Wyoming is an at-will state. We can fire for any reason here as long as it’s not discriminatory.
Awesome! Thanks so much! I’ll update the post to reflect that. (I always thought that was super bizarre.)
When paying both rent in a barber shop;if you decide to take a vacation, do you have to still pay your booth rent while away?
Absolutely. You’re a commercial tenant in every way when you operate as a booth renter. For more information, read this.
Hi, I have a question regarding the salon I work at. When I started a few months ago, I filled out a W9, and 1099. I make a percentage of the sales I bring in. Taxes are not taken out of my check and Im paid biweekly. The salon owner is very in control of us, we have a long list of duties for closing, lots of cleaning, and I also have to adhere to a schedule. I work all the hours the salon is open, and I have to adhere to the changes the owner makes in the hours. I also am required to stay if I am finished with all my appoinments midday, and the salon closes at 9. This has happened to me several times, where I was done hours before the salon closing. We generally do not get walk ins. I had to wait hours and hours for the owner to relieve me, and most of the time I had to stay not only until the salon was closed, but the end of day clean up list was completed. I also have to be at work 30 min before the salon is open even if my first client is hours later. Is this completely wrong? If so, how should I approach this?
Yes, that is completely wrong. For what to do about it, read this–
https://thisuglybeautybusiness.com/2013/04/improperly-classified-what-to-do-when.html?m=1
So, at the salon I work at, we get paid commission only (60%). We have set hours, rules, dress code and the owner is not taking our taxes out…we will be getting. A 1099. Just trying to clarify, is this legal?
This is clarified pretty explicitly in the post, but I’ll say it again: That is absolutely NOT LEGAL. Here is another article that specifically addresses this. It might help you more than this one: https://thisuglybeautybusiness.com/2013/11/independent-contractor-defined-for.html
Hi Tina,
Here is my situation, I am a 1099. The owner pays me 48% commission . I have set hours, I buy my own color, pay for all my taxes and was pretty much forced to sign a noncompete that states I cannot work within 3 miles for a year and a half..
I know I am being cheated and want to leave qnd go work at a chair rental salon but afraid of being sued.
so you think I would have a chance to win this case in court?
I’m not a lawyer or a judge, nor do I know your contract terms. You will need to speak with an attorney about your specific situation.
I’m paying Booth Rent in Al at a Salon with another business attached to it. The guy I Rent from owns that business my question is his other businesses is interfering with my clients being able to see the Salon or to even be able to access and park when I say something to him her doesn’t care can he do that since its his property ?
He’s only hurting himself by restricting your ability to do business, since if you aren’t making money he may lose you as a tenant. Unfortunately, without more information I really can’t give you an answer on this. I need more specifics. How is his business interfering? Is this a recent development or something you were aware of when you signed the lease?
I have a couple questions. My friend works for a salon and they had her fill out a W-4, so the salon takes out her taxes which I don’t understand because she’s technically an independent contractor. She is 100% commission so she does not get paid an hourly wage by the salon, and her commission is only between 30-40%. The owner of the salon is a very young girl in her early 20’s, and she makes the stylists and nail technicians wait in the salon for their whole shift while not getting paid to wait…even if they only have one client for the entire day. She also makes them do chores and clean up tasks which they don’t get paid to do either. Is the salon owner wrong in making her stylists/technicians do all of this without payment?? And is it uncommon for independent contractors to have a W4 instead of a 1099?? My friend is really upset with her salon job right now because many days, she’s forced to sit there and wait the whole day when she only has one client at the end of the night. And now the owner is trying to give the stylists cleaning jobs which they aren’t getting paid to do. What can my friend do here? Does she have rights that she’s not aware of?? Any help is greatly appreciated! Thank You 🙂
What you have there is a typical case of an inexperienced, underqualified owner.
If she’s an independent contractor, she does not have to adhere to a schedule. She also is technically making 15-20%, not 30-40%, since 15% of her earnings technically belong to the IRS for being “self-employed.”
If she is being expected to work, she needs to be getting paid. Period. Here are some links to articles that can help her:
https://thisuglybeautybusiness.com/2012/10/shady-business-practices-salon-owners.html#more
https://thisuglybeautybusiness.com/2013/10/engaged-to-wait-salon-employees-stop.html
https://thisuglybeautybusiness.com/2013/04/improperly-classified-what-to-do-when.html
https://thisuglybeautybusiness.com/2013/07/employment-101-how-to-recognize-bad.html
Wow, thank you so much for all of your help and the prompt response, that was really awesome. I have one more question. My friend works in Chicago. Are the laws and employee rights any different here than in other states? Or is this a law/rule that extends nationwide no matter the state? Again, thanks so much for your help it’s greatly appreciated.
Those laws are federal and apply to all 50 states. Illinois might have state labor laws as well, but those would be stricter than the existing federal laws.
Out of curiosity, I did a quick check of the Illinois statutes. Illinois actually takes misclassification really seriously and is the first state to draft laws specific to misclassification (the Illinois Employee Classification Act).
Basically, that owner picked a bad state to pull that shit in.
Hi Tina, I am the friend that he’s talking about. I’ve decided that I want to bring up the fact that I am only paid commission and I am being asked to do extra things, not getting paid for them, (laundry, taking out the trash, answering phones, shampooing clients that aren’t mine, cleaning the bathrooms while I am not with clients) I brought it up to the assistant manager, and he said, “Well, everyone had jobs, and everyone has to do them.” I am not sure how to phrase this to them and I know I’m being taken advantage of. My checks are for commission only, nothing else. Any advice in how to bring this up to the owner?
Thank you!
I would suggest arranging for a private meeting with the owner and manager and showing them the content found on every link here: https://thisuglybeautybusiness.com/p/important-irs-links.html
Each of those links clearly explains how the independent contractor is to be treated and used. Those are direct links to the IRS website. Those laws apply to every state in the US, so don’t let them try to convince you that Illinois doesn’t have to follow them. You are clearly being misclassified. They need to rectify that immediately and reimburse you for their portion of your tax responsibility. If they refuse to do so, inform them that you will be filing an SS-8 and having the IRS determine what is fair. The SS-8 will initiate an investigation into their business practices–an audit. They don’t want that. In addition, you could contact your local labor board and bring it up with them as well, mentioning that you are aware of the Illinois Employee Classification Act and you feel you were misclassified by the owner in an attempt for that owner to evade taxes.
Remember these direct quotes from the IRS website when you bring it up:
“A worker is an employee when the business has the right to direct and control the worker.”
“An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is usually paid by a flat fee for the job.”
“If you hire a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that the intent was to create an employer-employee relationship.”
“If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney’s work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.” (In your case, the salon would definitely be presenting your work as its own. You are clearly an employee because you are expected to be there on THEIR schedule, performing THEIR services at THEIR pricing. An independent contractor generally performs a sole function and that is it. No salon bitchwork. You don’t hire a plumber to fix your sink and then ask him to mop your floors and mow your lawn before he leaves without compensation. It isn’t acceptable in any industry, so it certainly isn’t acceptable in ours.)
Hi Tina, I followed your advice. Talked to the owner, she brushed it off and hasn’t done anything to change, it the mean time I’m experiencing hostility from her manager because I’ve been questioning things.
So I’ve begun looking for a new job. My question is about the handbook she had me sign in the beginning of my working there. Is says I cannot work within a 10 mile radius of the salon. I’ve for a salon about 2 from there that will hire me. Can she come after me for this? I’m hearing that this is not the case. Just curious of your thoughts on this
If she had you classified as an independent contractor (1099), then nothing she had you sign restricting your ability to work is valid. It’s not worth the paper it’s written on unless you are going to use that paper in court to incriminate her for improperly classifying you. In no state, under no circumstances, can an owner require an independent contractor to sign a non-compete agreement (that portion of your handbook that says you can’t work in a 10 mile radius). Even if you were an employee, those terms are too broad. No judge would enforce that. Read these articles for more information. If I were you, I’d invite her to sue. Tell her to go right ahead and tell a judge that she had an independent contractor sign an “employee handbook” that included a non-compete agreement with an absolutely unreasonable 10 mile radius…and see what he says about it, lol.
Overview of Non-Compete Agreements: https://thisuglybeautybusiness.com/2012/12/employment-contracts-non-compete.html
“Can I make my Independent Contractors sign a Non-Compete Agreement?”: https://thisuglybeautybusiness.com/2013/10/can-i-make-my-independent-contractors.html
Actually she had me sign an Illinois W4 form, she only pays me commission, and takes the taxes out. Does this still apply?
~Thanks!
If you’re W4, then you’re not 1099. You aren’t an independent contractor, you’re an employee. Because she is taking out and contributing to your taxes, she can put you on a schedule and require you to do tasks you aren’t being compensated for (as long as her salon makes less than 500k a year…if it makes above that then she’s expected to adhere to the FLSA). For some reason, I thought you were 1099. (I think I misread one of the posts up there and have been under the assumption that she told you that you were an employee but was not taking out taxes on you.) Unfortunately, as long as she’s taking out taxes and paying her portion of them, you’re an employee.
Yes. Ok, sorry about the miscommunication. This all makes sense. Wondering your thoughts.. This salon is just not for me, unfair, under paid, and passive aggressive behavior is not what I’m going to stick around for. Everything that they promised would happen, 6 months ago, when I started, did not (advertising for me, in turn only giving 30% commission. Also, promising to give me all the walk-ins 1st, instead the assistant manager is taking them for himself because he’s not a busy stylist). I’ve decided to put in my 2 weeks this Friday, to not leave her uncovered through the holiday, letting her know I’ll be working my other job, not doing hair instead. I know some salons do not let you finish your 2 weeks, do you think it’s best to do this anyway? I want to take the high road and end things as professionally as possible, even though they are not. Is giving a notice necessary? I may work in a salon 2 miles away in the future, so in the 10 mile radius the handbook said I could not, I won’t take any clients from the salon. Is this the most peaceful way to go? I appreciate any advice. Thank you!
The majority of salons don’t let you finish after you provide notice, but do so anyways as a courtesy. The ten mile radius is too broad for a non-compete and is unenforceable. The most a judge will enforce is three miles and in our industry even that is unlikely. I think you’re definitely doing the right thing by providing notice, so go right ahead. Try to keep things as peaceful as possible. It’s always the best route to take.
If you are an employee (W4) and *only* make commission for your treatments, not an hourly wage, are you required to be at salon or spa in between or when you do not have clients?
Also, in this same employment condition, can the salon require you to provide your own insurance? Thanks in advance!
This post will answer your question about prevailing wage compliance.
Salon owners generally can require professionals to carry their own professional liability insurance policies, and in our industry it’s typical. Unless there’s an applicable state regulation, it’s usually permissible. (I recommend carrying your own policy as a general rule. They run about $300 a year–well worth the cost should you ever require it. I personally would never trust a salon owner to ensure coverage. Plus, the cost is tax-deductible.)
Hi! This may be a stupid question..but can I restrict a booth renter from bringing her kids to work or serving alcohol to her clients or are those things her decision?
Hi Grace! That’s not a stupid question at all. Depending on the laws in your state/county, serving alcohol without an appropriate license may be illegal. In any case, as the landlord, you can set guidelines for use of the space. For example, you can restrict children and alcohol/drug/tobacco use. Both present serious risks and liability concerns. Particularly when you have an open-air salon (where the booths are all in the same open space), you have other tenants to think about too. It’s discourteous of her to bring kids and serve alcohol in a co-working space like that.
You should speak to your attorney about an immediate lease revision. For examples of how similar businesses implement guidelines like this, look to other industries where co-working spaces are common (tech and software facilities, in particular). So long as the guidelines don’t impede upon or her ability to conduct business or exert control over how she conducts business (with regards to service pricing, service protocols, dictating her hours, requiring her to use a particular product line, requiring training, and/or controlling her output), they’re perfectly acceptable.
Hi Tina,
I was reading your blog and responses and I have to say I fit this unfortunate category of “independent contractor vs employee. Here is my story:
I started working in a private salon that took on new management. This new owner was also a cordial friend. She said to me upon hire that I will get a 70% comm. I could make my own schedule and her only rule is to not steal from her. She also wanted me and others to cater to walk in clientele, which wasn’t very many. Anyway, after working there for some time, like a couple of months, I noticed that she was changing. Meaning her demeanor. When I wasnt busy, I would read, text, play games on my tablet, or step outside for a few. It seems as though everyone had their own doing too. But for some reason she came at me as if as though I was doing something wrong. She asked to speak with me and went on to say that she didn’t like the things I was doing, called me lazy, unprofessional, with lack if capabilities. Now being that I used to work in a corporate salon, as a manager, I new then she was wrong for how she approached me.
Again I am a independent contractor, I pay for my own supplies, and I have to do a 1099 form for my taxes. I told her that she does not own me, she is not my boss, cant tell me when I can and cannot do something. Needless to say, I had 3 arguments with her. She didnt like when I said that she needed to do more research on owning a salon business. It was like she did not want me there. I always stayed to myself, I mingled when needed, never gossip with anyone, just mostly quiet and observant. Last night she wanted to talk about other issues and my phone. She also said I came to work late a fews, I dont tell her whats going on when I have to leave, and I “still” be on my phone too much.
I have clients calling and texting me for appts. So I have to have it handy, but not while a client is sitting in my chair. Anyway, when I called her to say that I didnt want to discuss what she wanted to talk about, she got angry, said some things, I politely ignored, said ok whatever and bye. She text me and said and I quote, “come get your belongings, I’m tired of your mouth and attitude. Your services are no longer wanted or needed in my salon”. I was furious, all because she couldnt contol me? Its her salon, so I got my stuff and very professionally said nothing while she went on to tell her friends that she does not have time for adult sitting, and tired of games……
She has temporarily ruined what i tried to build. Can she do that? Is it fair to be treated like this as an independent contractor. Now that I know the difference I know what look for. Maybe i should copy the “law” and mail it to her. Is 70% justifiable for minimum wage, since she was treating me like an employee? Why do owners think they could do this to people?
Oh my god. I just wrote this huge reply to you and Google signed me out, didn’t post it, and now I have to type it again, lol. So here goes:
Unfortunately, she can fire you. It isn’t fair that you were let go because she tried to overstep her bounds and you wouldn’t allow it, but because no violation was committed there isn’t anything you can do about it. It sounds like you worked your own schedule and performed your services your way. In that sense, she followed the rules. You kept her from breaking them. Honestly, she should be grateful for that.
70% is what all IC’s should be asking for, especially if you’re providing your own supplies. In my opinion, supplies and product are “cost of doing business” expenses and should be covered by the owner since they are required for doing the services they’re contracting you for, but this is a gray area and the law is far too open for interpretation here for my liking.
Owners think they can do this to people because they usually don’t know any better. Those that do know better think that they won’t get caught. I can’t tell you how many owners have written to me and said, “I had NO idea this was illegal! This is how things have always been done!” Just because things have “always been done” this way does not mean that it is legal. I tell every owner that I communicate with, “If it feels like you’re benefiting from an arrangement to the point that you’re almost screwing over your staff, chances are that it isn’t legal.” A lot of these owners have told me that they’ve been given bad advice from attorneys and accountants. (I myself had an attorney give me bad information. When I provided him with the links to specific statutes that contradicted his advice, he was floored.) Laws change ALL. THE. TIME. The federal government is not going to email every US citizen to update them on the changes, so owners have to be responsible for doing their own research and ensuring they’re in compliance. It takes me between 5 and 20 minutes to find the information I need (or contact info for someone who can give me that information). They have no excuse not to do their own research. Just because you’re ignorant of the law does not mean that you can violate it at will.
Hi I own a salon and have a stylist who would like to come booth rent at my salon. She signed a contract at her old salon but is very unhappy there. They keep raising the rent and changing how many days she can work. Can she get out of this contract and leave? When they changed the days on which she could work they made a new contract. Unfortunately she signed that one too. What can she do to leave this salon?
She can get out of the contract and leave any time she likes. All she has to do is submit it in writing 30 days in advance, letting them know that she will be leaving. Without seeing the contract terms, I don’t know what penalties (if any) they require for an early lease termination, but as long as she lets them know in writing that she’s going elsewhere, she should be fine. They certainly can’t expect her to continue renting with them if they keep raising the rent and changing the days she can work. I’m sure they had to see it coming.
I forgot to tell you both salons are in Calif.
Tina, just have to say I’m floored by some of this, although its mostly stuff I already knew. I could never see the benefit of being an IC until I read your article, and it makes me want to go that route when I leave my current place of work. I hate being an employee and getting screwed over all the time.
Interesting tidbit: I was reading your little profile blurb on the side and it was like you had written mine. I do tabletop and video game roleplaying, I also tend to scare people with my vocabulary, love to read, and I am also an INTJ. The only difference is that I’m not a people stylist, I’m a dog groomer. All the same rules still apply though. 🙂 I’ve tried following the links to your blog but they all tell me they couldn’t find it. Is it temporarily down or did it change?
Hi fellow nerd person! The links aren’t down, I’m just an idiot. While writing a lot of the content, I linked to several other posts…then, I changed the URL from the blogger URL to my URL and then all the links to the content changed. I’ve been going through some of them to find the bad links that remain, but it’s been quite a process.
Hi Tina,
The spa owner where I work doubled our rent with 14 days notice. The original deal was we spilt 50/50until we hit a 500 cap now it’s 50/50 until we hit 1000 cap or 50/50 straight up with priority booking. We also pay a portion of advertising and supply our own products. When I spoke out against this she told me I’m lucky she didn’t fire me for “pissing her off”. I’m an independent contractor. Is any of this legal?
Yikes. So, she sounds like an asshole, first of all. I’d tell her straight to her face that as a renter, I am a PAYING CUSTOMER of hers and if she wants to continue collecting my rent, she’ll stay in her lane and behave appropriately.
However, your arrangement isn’t proper. The 50/50 split is legally extremely perilous for her (in 5 out of 6 IRS revenue rulings, the IRS found that the landlord who collected a percentage instead of a flat rental rate was actually an employer, since the collection of a portion of revenue–particularly such a high portion–constituted an inappropriate degree of control).
You should NOT be paying a portion of advertising.
This deal SUCKS for you because you’re paying 50%, covering your own costs, and you have to pay 15.3% of your income to the IRS for self-employment taxes. Plus you have to deal with her bullshit? Yeah, you’d be better off financially and professionally pretty much anywhere else. It’s legal for her to arbitrarily raise rent as long as she provides notice, but I wouldn’t put up with her for another minute if I were you. I’d be shocked if you were making enough money to live on once your taxes and supplies were accounted for.
I fixed them! Click away!
Thanks! I found them on my own and felt like a huge idiot when I realized this article was already ON your blog, lol. Its unreal reading some of these. Dog groomers need to band together with you guys on this too. We face exactly the same issues and abuses by employers. I had a question for you too, though I may just send an e-mail to you later because It might end up being too long for a little comment. Thanks for the response here!
I live in fl. I was let go from job. can I use name of place where I was at in ad , to let people know where I am now.
Honestly, I don’t know that any laws exist on the subject but I wouldn’t do it. Some salons have their names copyrighted and trademarked (the last one I managed did), so it’s generally not a good idea. It’s basically inviting litigation.
I own a salon and my rent is going up in January. I have 2 booth renters who’s contracts are month-to-month. What is a proper/easy way to tell them that their rent is going from $85/week to $100/week without causing a riff?
I think regardless of the way you tell them, there’s going to be some degree of backlash. Their weekly rent is extremely reasonable, even at $100 a week. They’d have a hard time finding that kind of deal anywhere else. I would just explain to them that operating the salon is costly and that periodically rent has to be raised to make up for those costs. If you don’t raise the rent, the rent on the building doesn’t get paid, and they will no longer have a place to work. Whatever you say, do it face to face with them and make sure they know that you aren’t trying to force them out or make their lives difficult. You’re just trying to cover your own expenses. $100 a week is really an outstanding deal.
Sorry Tina, I couldn’t figure out how to post a question so I had to reply to an answer you gave.
I rent part time in a salon for $100 a week. I’ve only been at this location for 2 1/2 months and the owner announced that my rent will increase by $25 more per week. She didn’t give me a 30 day notice and I thought the rent could not be increased by more than 10%. I’m in Ca.
Hi Laura! You’re on a week-to-week common law lease agreement (since you pay weekly), if you don’t have a written lease that specifies otherwise. Basically, every time you pay your landlord, your agreement renews automatically. This means that she’s only required to give you a week’s notice–not 30 days. I’ve not heard that commercial rent increases are capped by law in California, but that might be a city-specific law. (There are similar laws in major cities.)
I have been employed at a salon for the past 3 years, I have a class 1 license and have eleven years experience. And was hired 3 years ago at $8.00 an hour, and was told every 6 months we have a review and will discuss a pay increase. Well I have asked time and again for a raise and was always told that she will not give me a raise unless I attend a work shop every few months to learn the newest trends. So one of my
Questions is can she legally not give me a raise unless I attend work shops which I have to pay for myself?? Secondly, when I started I never received a w2 to fill out but started receiving checks which said I was claiming 0 dependents and since its bi weekly alot of taxes were being taken. I have two children so, I have always claimed 2 dependents. I called her and asked how I was receiving checks without signing a w2 and her response was ” oh I filled it out for you” I said how could you do that without my approval or social security number?” She said she had my social from my job application I filled out and signed it for me.. I told her I thought that was illegal and she quickly said its already done why does it matter I told her to get me another form so I can change the claim from o to 2 and she said I can’t claim 2 even though I have children, because the government will say I owe them money.. whenI aasked the other employees about their w2 forms I was made.aware that the owner had never given them one to fill out either,
Apparently she filed all theirs as well. Is this legal?? She has also been taking money out of our pay checks without our knowledge or approval, we only know because atthe bottom of the checks it says miscellaneous $ so when we asked her what this means her reply was it’s a penalty she charges us if we forget to log a credit card tip in the credit card machine, which doesn’t effect anny cash because we log it in the register. Or if the draw is short she takes it out of our check. But her daughter is our manager and doesn’t ring alot of clients in, she just pockets the money and doesn’t do a draw count after her shift or at the start of a new shift so how can they take the money from my check without proof that it wasn’t already short before my shift??? Please help me
Are you sure you aren’t mistaking a W-2 for a W-4? You don’t fill out W2’s, you receive them at the end of the year so you can file your taxes. You’re supposed to fill out the W-4.
The owner filling out that W-4 for you is definitely illegal. A W-4 constitutes legal instructions from employee to employer regarding the number of exemptions and amount of deductions the employer should implement for payroll withholding. An employer cannot decide this on behalf of an employee and cannot take action on an employee’s pay without authorization. Therefore, employees must, at minimum, sign their W-4 forms themselves. By filling out this form for you, she lied on your behalf the the IRS about your number of dependents which affected your withholding.
As far as the withholding, read this: https://thisuglybeautybusiness.com/2013/10/what-to-do-when-your-boss-is.html
Thank you, I knew it was illegal but just needed verification. I also have one more question, sherecently switched to a new payroll company and on our new check stubs it says the amount of credit card and cash tips we claim bi weekly and the cash tips we claim are now being deducted from our checks. The checks we usto receive did not show that, so I was always under the assumption that we get taxed on our cash tips? not that they were being deducted from my check. Is that right? I tried looking up the laws of claiming cash tips and couldn’t find what I was looking for. Thanks again
You should be getting taxed on your tips if the owner is including them on your paycheck. That means that the taxes should be getting deducted, not the tips themselves. If your tips are missing, that is theft, lol. The way you worded it makes it seem as if the cash tips are missing altogether. If you’re taking the cash from the clients, are you giving it to her to include in the check or are you guys just allowed to pocket it and report it whenever at your own discretion?
Hi! I can’t thank you enough for being so educated in the business and being able to provide info for me. Here is my situation: I am a booth renter in southern california (la county) I was told by the owner’s husband to get out, pack all of my belongings and leave in 1 hour!! I had a feeling this would happen because his wife (the owner) and I recently ended our personal friendship and she is crazy and “fires” renters all the time. I found your website a few weeks ago and saw that I need a 30 day written notice to evict me based on the landlord tenant law for ca and there is no contract. I informed the husband of this law and he didn’t care. i then called the police and when they arrived they did agree it was not legal but since it was a civil matter, not criminal, they couldn’t do anything about it and I was forced to leave. I want to sue the owner, I am without a place to work, I have clients scheduled the next few months and am trying to find a new place to rent, but don’t want to rush and get a station just anywhere, because i don not like to move around. The owner also has all of her commission stylists sign a 1099 to avoid paying taxes, but they are forced to do things employees are supposed to be doing. What should i do? Sue? What type of attorney should I look for? I am so frustrated. 🙁
You have an excellent case and you really do need to file as soon as possible in civil court. Considering the circumstances, you could also potentially seek compensation for the damage done to your business.
First thing: Find an attorney that specializes in real estate law, specifically wrongful eviction lawsuits. Explain the situation to them. What she did harmed your business significantly. Her wrongful eviction upended your business, which caused you distress and caused your clients significant inconvenience. What she did was unacceptable. Regardless of whether the lease was spoken or written, she is expected to adhere to the landlord/tenant laws. Period.
Secondly, you need to report her to your local labor board and to your local IRS office. Explain to them that she is purposefully misclassifying employees as contractors for her own benefit. You may have to follow up on this to ensure that they’re following up.
Hi there!
I’m writing to you because I’m a little confused now as to what my title is at the salon I’m at, and what I should do to make it right.
I was hired on as a commission employee last May. I get 50% commission. However, I have to pay for and provide all of my own color, supplies, styling products, hot tools, etc.
The owner does not supply any retail products, yet she won’t let me retail my own products. If my clients want to purchase something that I’ve used on them (mind you, it’s a product I’ve purchased myself to use), I’m supposed to tell her so she can go buy it, then sell it to my client.
I get paid cash at the end of the day, and don’t receive a normal taxed paycheck like a normal commission employee should. I only have to go in when I have clients, but I do have the option to stay when I don’t have my own clients schedule and get walk ins. Note, I’ve never actually done a walk in client because we rarely get any.
I don’t know if I’m actually a commission employee, since I can pretty much make up my own hours within the salon hours of the day, and pay for my own products. But then she’s still taking half of everything I make.
Maybe I’m just a little naive since this is my first job behind the chair since assisting, so I was just excited to get a job with no clientele. However, I’m extremely unhappy at this salon, and feel like I’m being ripped off. Help?
You are an independent contractor, however, she isn’t treating you right for the classification. As the owner she is responsible for supplying you with the materials needed to complete the service (the “cost of doing business” expenses). For us, that includes products. Not tools. So she needs to be supplying you with chemicals and backbar styling products. Those things are not your responsibility. If she wants to make them your responsibility, she needs to pay a whole lot more than 50%. 50% is complete garbage. Once you cover your self-employment tax (roughly 15%), you’re making 35%. Then you have to factor in your product expenses. On top of that you aren’t allowed to sell retail, so she’s screwing you there too. You have less than no incentive to work for her.
Tell her to do the math herself and ask her if she would waste her time working at that salon if she were in your shoes. Tell her you have bills to pay just like she does and that you can’t afford to work for someone like her that is either:
a.) greedy and inconsiderate or
b.) completely clueless as to how to run a damn business.
Get out of there.
Hi there. We have a situation at our salon and I was wondering if you had any information for me. First, I work in California. I started in my salon in 2013 as a 1099 commission stylist, but we are required to be at the salon on our days whether we have clients or not including the off-season when it’s dead (it’s a tourist town) and are required to clean, etc. I have just recently found out that they expect us to get business licenses also. They have yet to tell me this personally (they bought the salon a year ago and have never owned before so they aren’t always great at communicating), so I have not gotten a business license but the rest of the stylists have. Can they make us get a business license? Can they treat us as employees without or with it? Also, we pay them to be on their insurance. Is this right? Any help you can give would be great.
Illegal. If you are 1099, you set your own schedule no matter what state you’re in…but California in particular has strict rules about how it is to be handled. They also enforce those laws severely. The owner can’t “require” anything of you, least of all menial chores.
They also can’t make you get a business license. If you are an independent contractor, you can operate as yourself without filing for a DBA. You DO NOT pay them for insurance. They assume that responsibility. If you want professional liability insurance to cover yourself, that is your decision to make and you alone can choose the policy that works for you.
Honestly, it sounds like they have absolutely no idea what they’re doing. They need to attend some business ownership classes and all of you need to get out of there.
Curious to know your thoughts on this…I recently left a salon and the other day found out that one of the stylists there was booked and appointment with Someone that had thick curly hair and wanted a bob haircut! She had a pedicure after but ran too far behind and was unable to do the pedicure. The salon owner text the employee stating she would be deducting $55 for the service from her paycheck. Is this legal?
It is not at all legal. There are legal deductions that employers can dock employees for, but those are limited to things like court-mandated wage docking (for child support payments) and property damage (in certain cases). The federal laws state that as long as the amount you make after the deduction is at least minimum wage, the deduction is legal, but the majority of states have laws in place to protect workers from unreasonable deductions like that. Either way, it is an unacceptable deduction and that employee needs to give that owner a notice stating that she expects those funds to be returned to her paycheck immediately. She can’t be charged because a client didn’t get a service. That’s like charging a retail store employee because a customer didn’t buy a certain dollar amount of items. It’s insanity. What state are you in?
I’m in Minnesota, she has done this before and I didn’t think that this was right. Thank you for your response!
What she’s doing is called “wage theft.” It is incredibly common. Like I said, most states have (at least bare bones) provisions for protecting employees against bad owners, but some don’t have any at all. The issue here is that you aren’t paid hourly. Your rate of pay varies depending on how much money you make in services. So whether or not she’s complying with minimum wage laws is debatable, making it impossible for me to determine whether or not what she did was “technically” legal. Either way, I don’t see a judge ruling in her favor for services that weren’t rendered. That is completely unreasonable. Tell her to demand that the money be returned. If she refuses, report her to the MN labor board and consider finding an attorney. She’s stealing and she needs to be stopped.
http://www.aflcio.org/Blog/Political-Action-Legislation/Most-States-Flunk-Wage-Theft-Test
I have a sneaking suspicion I’m being misclassified at the salon I’m working at, as well as a few other people there. I work at a salon in TN, a mix of renters and commission. I actually assist one of the renters part of the week and take my own clients on commission the rest of the time.
Commission stylists are receiving straight 50%, whether that adds up to at least minimum wage for the hours worked or not, no taxes are being deducted. We’re allowed to set our own hours but we can’t leave if it’s slow, and are required to clock in and out. We’ve been told if we clock in late we’ll be docked our first service of the day. We’re also required to supply our own products, which now have to be a particular product line.
During downtime we’re expected to answer phones, clean, do laundry, etc. We’ve been handed down rules about our conduct and our dress code, and are generally treated as employees. Nobody has an employment contract signed yet, these are new owners and I feel like it’s coming down the line shortly. I plan on bringing it up one on one with the owner soon and suspect it won’t go well, but I wanted as much confirmation as possible that my instincts were right before I put my head on the chopping block so to speak. All the stylists they’re dealing with this way, myself included, are very new to the industry and I don’t want any of us taken advantage of. If I’m wrong I’d love to understand why!
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It’s too early, I haven’t had my coffee, lol. I had to delete my last comment because I completely missed the “no taxes are being deducted” part.
If no taxes are being deducted, you are your own boss. You are absolutely right. They can’t set your schedule, force you to clock in or out, they sure as shit can’t dock your pay for being late when they aren’t paying you a standing wage. Docking is for hourly employees that don’t show up on time. In that instance, then yes, the employer has a right to take away that hour’s wage since the employee wasn’t performing the job. What they’re doing is wage theft…which they don’t even have the right to do because THEY AREN’T YOUR BOSSES.
Explain to them the situation and find out if this is an honest mistake or intentional abuse. If it’s an honest mistake and these new owners just don’t have a clue what they’re doing, let them know I’m happy to help inform them of how to run the business legally and properly in a way that ensures everyone is happy.
Ok so here’s the spot where my question should have went: EMPLOYEE paid commission only (but is on payroll. We are doing the taxes, etc and issuing a W2). Late nearly every day. Can I dock her? Even if it’s a flat rate fine.
No way. You cannot fine employees for being late. It’s illegal. If she were being paid hourly, you could not pay her for the time she wasn’t working, but she’s strictly commission. You can’t withhold pay she’s earned by completing services. She earned that money. Wage docking is only legal in very specific circumstances (all but one of which require a court order). Keep your hands clean and never ever do it. It’s wage theft and it is punished pretty harshly now. Every state is in the process of writing stricter laws (which include even harsher punishments) for it.
The only way you can deter her from being late is to write her up. Let her know that if she continues to not show up on time, that she’ll be terminated. There’s no excuse for that. It’s unprofessional and NO client deserves to be sitting there waiting on one of your staff members. The problem is that she knows you value her too much to fire her. You have to decide whether or not she’s really worth keeping. If it’s hard for her to make it to work in the mornings, ask her if she’d prefer to work afternoons instead. If you value her that much, figure out a way to reward her for showing up on time. Personally, I wouldn’t do that. Her inability to arrive on time is disrespectful to you and the clients your business services.
Hey Tina,
I am a renter in Chicago. I am moving out of state and I have given my landlord notice. She is telling me that she wont let me out of my lease early unless she can sign 2 other stylists or unless I can find a sublet for my chair.
I told her I was unhappy and wasn’t able to afford to do what I am doing anymore last July and so she offered me a manager position to help me with my financial difficulties. She never actually paid me for being the “manager” although she took 100 dollars off my rent. She told me that if she could get another stylist that she would give me free rent as my compensation for being manager. She ran the ad for a few months until I had resigned my lease and then not again after that until the other day when I told her I was moving. I wouldn’t be so frustrated with the not letting me out of my lease early thing if I were staying in Chicago, but I am moving out of state for pete’s sake. My apartment lease even let me out early! IF I can’t sublet me booth and she doesn’t find any other stylists to rent before I go I am afraid that I’ll have another 6 months of paying rent when I am not even working there. I guess I am just hoping that there is something that I can do. She has said in the past that she would sue a stylist for unpaid rent and our lease clearly says that she can and that she can make the stylist pay her legal fees. I understand the importance of the lease to protect her and me, but REALLY?? I have given her a LOT of notice. Have any thoughts or suggestions?
Is your lease month to month, week to week, six months, or yearly? It sounds like it’s yearly from what you said. If so, the Illinois landlord-tenant laws say that she can do that, unfortunately. :/ (They’re here, btw: http://www.tenant.net/Other_Areas/Illinois/mto/english3.html#Moving Out)
The best you can do is help her find a tenant in the meantime and hope that you can get someone to take over the space.
As far as the manager situation, that is super complicated since it is very possible that what she did was a violation of employee classification laws. However, it’s tricky because you accepted a discount on your rent in lieu of payment. Either way, I still think it’s a violation because since you are acting as an employee of hers, she is responsible to cover half of your employment tax. If things get really ugly, I suppose you could attempt to pursue that.
To be honest, so many booth rental owners violate the law with their contracts, getting out of that lease could be simple. I would have to see it to know for sure though.
My lease is yearly and with the manager thing nothing was ever in writing. So I assume that I am stuck in the lease unless I can get someone to take it over. I may have a lawyer friend look over my lease just to see if I have any options, but I really don’t want things to get ugly between us. I have been there over 8 years and have had a pretty good time there. I am just making a change and I thought that she would be more sympathetic to my cause do to our past conversation and all i’ve done for her and the length of time I’ve been there. BUT…that was my bad for hoping that she actually had a soul. I’m not vindictive or a total ASS hole otherwise I’d bring up some really awful things that she has done.
Here’s a question for you though…
In filling out the paperwork to get licensed in another state the application asks for the Name, address and shop license number of past and present employers. When I went on the IL dept of Prof regulations license verification look up site I couldn’t find her or another salon that I had worked for. I asked her about the license number and she said she’s never had one. She does have a license from the City of Chicago Limited Business License, but the guy I spoke to at department of prof regulations said that was a totally different license. Are those salons doing something wrong by not having a license filed with the Dept of Prof Regulations?
Woah. She doesn’t have a salon license? She’s required to be registered with the state. It says so here: http://www.ilga.gov/commission/jcar/admincode/068/068011750M13000R.html
Hello, I just stumbled upon this page, and I am so thankful for your wonderful input and research. I am so happy to see you steer so many of these confused stylists in the right direction. I myself am a salon booth rental owner, and am very new at this. i have only been open for a year and a half, after being a 50% commission based employee for 9 years before my salon opening. I am SO ECSTATIC to read all of this and to be reassured that everything I am doing for my booth renters is 100% fair and correct. They are all their own businesses, and I was lucky enough to have a great group of friends that I’ve known for years become my booth renters. Because my salon was just getting off the ground, they pay extremely low and fair rent, and everyone has agreed to do their part in helping with laundry, basic cleaning up after theirselves, emptying garbages, helping each other with our phones, and even helping each other when we may need a shampoo for a client when we are running behind. (As the owner, I take care of the bathroom, coffee area and restocking, as well as dusting shelves that aren’t individual stations, vacuuming, and floor washing.) I have to say after reading so many horror stories, I have truly lucked out. I wish all the best for all the stylists who were brave enough to share their stories to help both owners and other stylists to better their careers! Thank you!
You sound like a great owner. The woman I work for often complains that we don’t clean enough. It frustrates me because the salon is clean. The girls all clean up after themselves. She really has a good group of girls but never gives any of us credit. The only mess is when clients make coffee. She gets annoyed with the sugar being all over the place. It’s not that bad and besides I can’t clean up after every cup of coffee that gets made. Its rude if you clean up right after them. I’ve mentioned before that we as booth renters only have to keep our stations clean. We keep the shampoo bowls wiped down and empty the garbage. I even wash the floor because I want it to look nice for my clients. I hear her tell people that all she does is pickup after us. I wish she was more positive. The problem is that when she is at work she isn’t busy. She concentrates on the hair on the floor. It’s a hair salon:) I’ve been trying to find laws or what exactly a booth renter is responsible for and an owner is responsible for. Plus I once read that if an owner closes for repair she has to pay stylist for money lost. I can’t seem to find that article. Any help….
Well, states legislate landord/tenant rights differently, and many don’t have any legislation pertaining to commercial landlord/tenant law, so it’s wise to have those things drawn into your lease since so many states lean on contract law when disputes occur. She sounds like she’s just looking for things to complain about. Unfortunately, you can’t fix miserable people. 🙁
I can’t find the article but I had read somewhere that if an owner closes the salon she is responsible for income lost. The owner is planning on closing to do some upkeep. I’d like to have some info to show her.
I’ve never heard of this legislation, but ethically, I agree that an employer should pay employees when the business is closed for repairs or renovations. I highly doubt you’ll find any legislation that makes it a requirement, though, as all states are “at-will” employment states.
Hello, I’m not really sure under which I rightfully fall under, but I am a stylist in Virginia. I started working at a salon and was told I’m an independent contractor, with booth rent. Booth rent was $50 and great. I had my own clientele being that I have being doing hair for 11 years, but never in a salon. Sometimes she would send clients to me and I was on commission 50/50. She expected me to be at the shop at certain times, let her know my days off, and question when I wasn’t there. She owns 3 shops, somedays if I was late on booth rent I would go to her shop and take clients she gave me, thinking it was reasonable. Those days I would never see cash because the clients paid at the register. A day or so later she would give me some cash, I figured what was left over from what I owed. Is that right? Should I have received a check? What status do I fall under? After reading this, I realize things there were very unprofessional. Her manager took the booth rent and commission after we received cash from the client at the shop location I worked at, but at the shop the owner worked at it was all handled at the register.
Your entire situation was such a mess, I almost don’t know where to start.
If you read the article, chances are that you already know that your situation was wrong in nearly every way. You and your owner are both trying to have things your own way and you’re both violating federal tax and labor laws to do so.
First, you need to make up your mind. Either you’re a renter or you aren’t.
If you are a renter, you pay a flat fee, you do what you want, you work your own hours, you run your own phones, and you collect your own money. You also pay your own taxes.
If you are an employee, she sets the hours, she takes the money, and you do what she asks at her prices.
You cannot have it both ways. You cannot pay rent some days and make commission others. You cannot work her hours if she isn’t paying employment tax on you. You cannot work in exchange for a discount on your rent. All of that is super unprofessional and you’re both setting yourself up for conflict.
She needs to make you strictly a renter. That means you pay rent. If you’re late, you get evicted and/or fined for it. You cannot work as an indentured servant when you can’t afford rent. That’s absolutely unacceptable. If you can’t consistently pay rent, you either need to find a place with lower rent or have her make you a commissioned employee. What you’re doing now is illegal, complicated, and messy. It has the potential to end very badly for both of you.
I recommend that both of you read these articles and figure out whether or not this arrangement is really what is best for both of you and if it’s worth risking an audit over.
https://thisuglybeautybusiness.com/2013/12/bringing-in-booth-renters-are-booth.html
https://thisuglybeautybusiness.com/2013/08/booth-renters-be-your-own-boss.html
https://thisuglybeautybusiness.com/2013/11/why-i-hate-booth-rental-business-model.html
https://thisuglybeautybusiness.com/2012/11/can-i-charge-my-booth-renters-fee-for.html
https://thisuglybeautybusiness.com/2013/01/staff-compensation-comparison-of.html
Hello I too just stumbled upon this site, looking for contract agreements for my booth renters, we have been open for 5 months and I was a booth renter before opening this salon, we are having problems with children being unattended and allowed to tear up the brand new equipment, I do not have written contract agreements with the booth renters and my attorney said I need to get them done, so I am looking for a fair contract for them and myself, especially one concerning how to get the child thing under control, do you have any suggestions on how to protect myself from lawsuits and have a fair contract for the booth renters?
Your attorney is right, you do need written contracts, but before you consider writing them there are multiple things I want to make sure you know before you do. A lot of booth rental owners make these mistakes because they don’t know any better and it ends up invalidating their contracts because their terms are illegal. This is not an exaggeration: I have yet to see a properly written first draft of a booth rental agreement.
Here are your rules:
*You are not their boss. The contract is just a lease.
*You outline the hours the business is open (they must set their own hours within those hours).
*You explain exactly what is being provided (the space, use of communal shampoo areas, etc).
*You state what the rent is and when it’s due.
*You explain what happens when rent is not paid. (Check your state’s landlord-tenant laws regarding this.)
*Require them to maintain a professional liability insurance policy. It is not your job to reimburse or refund unsatisfied clients or those that may get burned with an iron or have an allergy to a chemical.
*If they or their clients damage salon property or equipment (outline exactly what constitutes your property: shampoo bowls, fixtures, decor, etc) THEY will be held responsible for replacing the damaged items.
*They are responsible for any and all fines incurred by any health or board of cosmetology violations. Not you. Put it in writing.
That’s it.
No non-competes or non-solicitations. These girls are self-employed, having anything in that contract that indicates otherwise incriminates you for crossing an “inappropriate degree of control” boundary that the IRS draws pretty clearly.
No vacation time.
No receptionist or reception desk.
No requiring them to put your business name on their cards or advertisements.
No cashiering.
Those jobs belong to them and them alone. Self-employed means self-employed. They are not your responsibility or your employees.
As long as you stick with that, you’ll be fine. You provide the space, that is all you do. Your job is to collect a rent check and make sure the building itself is up to code. If you push outside of those boundaries, the IRS will eat you for lunch. If your renters are really resourceful, they could get the labor board on you as well and possibly take you to civil court. If you can afford to, have an attorney that specializes in employment law look over the document. Remember…employment law. Not contract law. Not real estate. Not family law. EMPLOYMENT law only. Accountants don’t understand the details regarding the independent contractor/self-employed renter situation. We’re in a weird industry that doesn’t quite meet any classification, so we have to play it as safe as possible. That means you have to keep your hands clean and let it be known that you are JUST a landlord. That is it. You won’t go wrong as long as you let the self-employed people be self-employed.
Where the children are concerned, post a conspicuous sign in the waiting area. Keep it out of your contracts. That might be construed as limiting the stylist’s ability to operate her business as she sees fit. The professional liability insurance clause and the clause that holds them responsible for property and equipment damage will handle anything that happens.
I’ve have read a lot of comments and I need your help! I didn’t see a place for me to make a new comment. I’m an Owner for a booth rental salon and I have/had a renter who has a key sign a year contract that isn’t up until November. She got pregnant and left for maternity leave… Which she said she would be out 2 wks and said she couldn’t afford to pay for wks she isn’t working. So I was nice and said ok I’ll let you not pay for those 2 wks. It has now been 6 wks and I find out today from a client that came into the shop today asking if I had spoken with her and I told him not since the last time we spoke. He informed me that she’s switching salons! No notice! No communication! Nothing! She texted him to let him know, but has yet to inform me of anything. Her stuff is still at the shop and she owes me rent for the last week that she worked… 6wks ago! I don’t wanna do anything I’m not allowed to do, but as an owner I have to pay rent no matter what and my landlord would change the locks if I didn’t pay! I feel like I was being super nice and supportive and feel like I’m being swindled 🙁
Can I lock her stuff up until she pays me the back rent? I’m I only allowed to ask for the last wk she worked? Or I’m I allowed to ask for the other 4 wks I never promised her as well?
The shop is in Texas by the way. Any info or articles would be greatly appreciated!
WOAH. You were way too nice to her. By a whole LOT. She had no right to that free rent at all. If you have a lease, you have the right to sue her for the unpaid rent, and you definitely should. You do not have the right to lock up her stuff (that’s considered theft by conversion–she could call the police on you for that). You should talk to an attorney who can best advise you. I’m not qualified to give legal advice, and you could really benefit from someone who understands your case and your state laws. In my opinion, you need to take her to court for that rent.
I am a new booth rental salon owner. The previous salons I have worked at was a commission based salon, so how this all works is new to me. I have read and learned a lot on this blog. My question is would it be a bad thing or is it legal to charge more to the booth renters for working out of salon hours? Example would be if on a day we are open till 5 and the stylist stays until 6 or later, would I be able to charge more for that extra hour or per hour they are there out of salon times? We are open later other days so there is options to stay late then. Situations happen I get that but when it happens over and over again it doesn’t seem fair to me to be paying for the salon to stay open if there are other times that stylist can stay late if needed.
One other question is am I allowed to have booth renters help out with cleaning duties as laundry, filling coffee station, and sweep floors if messy? We do not have anyone who is an employee as it’s only a booth rental salon. Basically everyone pitch in for what happens throughout the day. Thank you
You likely could. There are very few states with commercial landlord/tenant laws. They tend to go by the lease agreement, so if your lease states that additional time comes with additional charges and your state doesn’t prohibit that, you could. You’re absolutely right that it’s not fair for you to be accruing additional operating costs.
It is not okay to have the renters performing menial tasks for the salon. (Legally, you aren’t their employer and can’t dictate to them. It’s the equivalent of your landlord telling you to trim the hedges outside the building, wash the windows for all the storefronts, or fill a pothole in the parking lot.) They can do so if they choose, but you can’t compel them to by assigning them a chore list or anything similar. I’d recommend hiring an assistant to handle those jobs.
This is interesting, I’m in a situation now where I’m renting a room in a salon and the owner is assigning chores to do (much like the post above) before I leave (such as mopping the salon even though I don’t use that section of the salon AT ALL because I have my own room). There are other renters there too who are being assigned things but she also has commission only workers on the main floor who could be doing these tasks. I have no downtime really anyways to perform these menial tasks, because I’m easily working 10-12 hours regularly. So it’s putting a strain on our business relationship. There are other things of course like a dress code and mandatory meetings which I have so far refused to show up for.
I’m binge reading the articles and comments (which, btw Tina, is a very impressive mountain of info you’ve created here) and I now understand that the owner is overstepping the boundaries between landlord and tenant.
So my question is simply, how do I tactfully handle this situation? What information can I compile to educate her on this matter? The owner is new and I don’t think/hope she doesn’t realize that I’m not her employee. She’s actually really friendly and she’s even a loyal client lol but these small things are adding up and I’d like to draw that line to focus on my business. Is there any official govt links that I can send to her that point to what is and isn’t right in this relationship? I also see that you sell your own guides on this site. Would any of those also be something I could consider looking into to help the matter as well? Thanks!
Don’t worry, I already have a post for this. 😉 While that post was written for employees, the same procedure applies to anyone who wants to have a compliance-related discussion. The most relevant compliance-related links will come from your state labor authority and the IRS classification guidelines.
As for kits, I’d say the most relevant to your situation would be the Microsalon Owner’s Toolkit, but if you’re already devouring articles and know how to calculate your pricing and negotiate a lease, you likely won’t need it.
In the state of NC- can a salon owner require an existing booth renter to sign a contract? In the contract it states that the renter will be charged a $25 a day late fee which is not the same as a landlord law. It also states that the renter has to give a 30 day notice to leave the salon.
What type of contract is it? A lease? If so, yes, they can (and you should). It’s not abnormal for late payment penalties to be assessed if a renter doesn’t remit payment on time, nor to require notice to terminate a lease.
Does the salon owner have the right to take up keys from the booth renters? We are having that problem now in Texas. Early morning girls and later girls are about to leave . After 17 years or so of customers being able to get their hair done they no longer will. All we find is IRS saying they must have a KEY. Please help thanks
I’m sorry, but the information you’re looking at might be outdated. The IRS quit making keyholding mandatory a while back. As long as the owner ensures that the building is open during the operating hours stated in the contract, they do not have to provide anyone else in the salon with a key. It is up to them if they want to do so. I once worked in a booth rental place that used mechanical deadbolts with keycards that would automatically lock themselves after people entered and left outside of normal business hours. That worked really well. You should consider bringing that up as a solution.
If you were provided a key and your lease states that the lessor is providing you with said key, can that booth renter work outside of salon hours then? or, does the booth renter still have to abide by salon’s normal business hours?
That’s entirely up to the landlord.
Here are the updated laws from the IRS: http://www.irs.gov/pub/irs-pdf/p4902.pdf
They say keyholding may be present as a determining factor, but it is no longer mandatory.
Hello.
I own a salon in South Australia. I am essentially a nail technician/beautician and are very much hands-on in my shop. I bought the premises from a hairdresser in which did not leave me (as requested) any client information at all, so you could say its brand new business. Its difficult enough growing a new business and with some old clientele making their way back to the shop for hairdressing services in which I am incapable of doing I thought of bringing in an independent contractor to take up the hair side of my business. (I have been advertising for a booth renter I think you call them but not successful so far ). I had an enquiry for the position and these were the details I have given her to think about. 1 – pay a wage in her case shes asked for $25.00/hour. 2- paid for the work she does – eg on-call 3 days a week. ( she lives 5 minutes from the salon). 3 – I supply all the colour, shampoo’s/cond/brushes/combs/clips/towels. She brings her own scissors ( we have our favourites ). 4 – I make bookings for her and she brings in clients of her own also, we have a shared diary online. 5 – She will have her own key and gate key.
Now as far as I know ( im pretty new at all of this ) this is a pretty sweet deal for her and I. But she has just tried to get 5 hour minimum / day wage out of me for 3 days a week regardless if I have only 1 cut booked in. And now trying to get another $1.00 making it $26hr.
My question is – Am I being unreasonable? Or should I stick to my guns? Or should I perhaps put her on a percentage based arrangement. Im seeing her again for a final meeting this Friday (24th jan). Would love to hear your thoughts before I meet with her.
I’m not sure what is normal there. All I know is what is normal here. So, keep that in mind, lol.
First of all, $25 an hour is quite a bit of money. If you are providing product…it is an obscene amount of money. Unless you are charging a considerable deal for your hair services, I don’t see how you plan on breaking even on her, let alone making a profit.
Why exactly does she need her own key? I would absolutely not allow that at all. How do you know that she isn’t coming in after hours, servicing clients with your product in your business, and pocketing the cash? No way. Do not do that. It is a bad, bad idea.
In America, in most salons, we make a set hourly rate OR 50% commission on service sales…whichever is higher at the end of the pay period. Never both. If you are paying her an hourly wage, what incentive does she have to actually work on clients? She’s getting paid either way. She has no incentive to ensure that the client is happy and excited about returning. If she’s collecting commission, she will make damn sure that woman will be back by providing excellent service.
I’m afraid that she knows that you’re new to salon ownership and is trying to take advantage of you. Personally, I would tell her your terms. If she refuses to accept them, kick her to the curb and tell her, “Good luck finding better elsewhere.” She won’t.
Read this article. It will help you immensely. It outlines all the different compensation methods salons use most commonly and weighs the pros and cons of each.
https://thisuglybeautybusiness.com/2013/01/staff-compensation-comparison-of.html
I work at a spa and am supposably a self employed who pays CPP and my own taxes, but I believe I am treated as an employee on many levels! I had to sign a form to carry out other duties at the spa like answering calls, cleaning etc. I am ruled by an employer and paid twice a month, commission! She provides a place, tools and supplies, everyone is questioning if we are really employees? We have to get our boss to approve anytime we want off, and she expects us to work 8-9 hour shifts and come 30mins before clients! Does this sound right?
Absolutely not, lol. If you’re self-employed, you answer to nobody. If you’re an IC, you do a job, you get paid, you leave. No bitchwork. Read these posts too, there’s more information that’s specific to people in your situation.
https://thisuglybeautybusiness.com/2013/11/independent-contractor-defined-for.html
https://thisuglybeautybusiness.com/2013/01/staff-compensation-comparison-of.html
https://thisuglybeautybusiness.com/2013/07/employment-101-how-to-recognize-bad.html
I am hairdresser in Ohio I have been a hairdresser for 25 years an have been at the same salon for 21 of them . However this is the third owner I have had . I work on a commission which is 60 %. I have busy weeks and really slow weeks. which I am used to. But my question I have is what is the legal way of pay ? our owner makes us work certain hours, but the problem is we make our commission and that’s it. so if I’m scheduled from 9 to 2 on one of the days I work and all I have is 1 client the whole day am I required to stay . she never pays us anything else. so I feel if she isn’t paying me anything but my commission and I have to sit there and do nothing else why do I need to stay. I did mention to her I don’t know how you can make us stay here when we are not getting paid to sit here. There is a lot more to this but this is the major issue. I feel its not right. She is the boss and she comes and goes whenever and however much she wants. She sets a bad example. I went into work one day last week and she wrote on appointment book that all girls had to stay 2 hours longer because we didn’t make very much money this week so we have to stay . but no one had any extra appoinments because we have a normal time we close. I feel she is doing things she shouldn’t be doing. She also took extra money from my check because she claimed I didn’t charge enough money for a service I did. there was no price listed on our price sheet for this and she wasnt there so I used my judgement. she made me pay for the whole cost of product. not sure if that’s right either. She also cancelled our long distance phone service so if we have to call a client we cant if its out of the area. she makes us use our own phones. please any info on this would be great
I was actually *just* talking about this situation in one of the Facebook groups I belong to. This is unacceptable, but not illegal. And it’s bullshit that it isn’t illegal.
FLSA dictates that businesses that bring in at least $500k per year are required to pay their employees at least minimum wage (federal or state, whichever is higher). My opinion is that this arrangement is stupid and gives salon owners and other small business owners the ability to abuse their staff by not offering them fair wage. Your inability to manage your business finances should not be awarded with an exception to the FLSA which allows you to continue to hire staff and get away with working them for free. If they are on your schedule, following your commands, and doing services at your pricing then they need to be getting paid for their time. Period.
This is why I encourage salon professionals to stop accepting jobs at salons that don’t offer them a living wage. We are not charity workers. Just because this is the way “it has always been done” does not mean that it is acceptable. Owners want to moan about how they struggle with employee turnover–this is why. Nobody is going to sit around at your command and wait for business…at least not for long.
There are owners out there (and we have all seen this, I’m sure) that don’t have enough business to support the staff they have, let alone extra staff…yet they keep hiring. The owner has girls cleaning, answering phones, folding towels, and doing other menial chores without compensation. It is absolutely unacceptable. In no other industry do you see these practices happening. If you can’t afford to put your staff on a commission vs hourly compensation plan, then you need to address the reason why. Either you are not managing your finances appropriately, you opened your shop in an over-saturated area, you can’t afford to have the staff to begin with, or you are not advertising well enough to build the business and support the staff.
The reason I support a commission vs hourly rate is that it essentially lights fires under both the ass of the owner and the employee. The employee wants to make commission since it’s higher than minimum wage. The employee also knows that under-performance will lead to hours being cut and eventually termination. The owner has more incentive to ensure the stylist is busy with clients (because they have to PAY THEM if they’re not busy), so they are more likely to invest more into advertising and by extension, into their staff’s financial welfare. Owners with employees on a commission vs hourly plan are far more involved in their business overall. It also makes it easier for the owners to separate their weak professionals from their strong ones and build a more successful business. Because the employee is getting paid for her time, she is also more likely to do what she’s asked (like answer phones and fold towels). The commission vs hourly model is the only one that holds the owner responsible for the business’ performance.
The commission-only model is lazy, unfair to both the owner and professionals, and hurts the business overall because of it. I hear these complaints from my subscribers about how they feel that nobody takes our industry seriously. It’s because we make up our own rules and they’re absolutely ridiculous. The commission-only structure seems great on the surface but is entirely inappropriate and inadequate. Every time a potential owner (or current owner) tells me, “But I can’t afford to compensate them like that,” my response is, “Then shut your doors and don’t open a business until you can.”
For those out there that want to argue, “But commission is great!” Let me ask you this, “WHAT makes commission only so great?! That you’re expected to work set hours without guaranteed compensation? Is it that you’re expected to take orders from a ‘boss’ that isn’t paying you for the privilege? Is it that the owner has no incentive to put any effort into actually managing their business and instead expects you to ‘market yourself’ in addition to being their personal bitch? Owners: is it that your staff resent you because you expect them to contribute to the salon without paying them? Is it that you struggle to retain your staff because the second things get slow, they’re off to the next business?”
Yeah. No thanks. I never understood or supported commission only. It is a joke. It does nothing but invite conflict and unhappiness into the salon. Successful salons are team-based. That means the owner and the employees work together as a team to make the business a success. In commission only or booth rental salons, that shared responsibility is lacking. If you want to own a business, own it. Accept responsibility for the staff you hired.
…obviously this is a touchy issue for me. Read these posts for sure. The only way to fight this is to stop allowing it to happen.
https://thisuglybeautybusiness.com/2013/10/engaged-to-wait-salon-employees-stop.html
https://thisuglybeautybusiness.com/2013/01/punishment-through-theft-what-is-and.html
https://thisuglybeautybusiness.com/2014/01/we-are-worth-more-we-deserve-better.html
Tina, I have been working in a salon as a booth renter for 6 yrs pretty much full time. Due to health issues after 31 yrs of hairdressing I am now receiving disability for several things and have cut my hours quite a bit. Still paying the same rent and no way has reflected on my capability to do my part in the salon as a team player. The owner now want’s to take my booth space and hire someone to work it full time. In other words I would loose my space to do my clients. She doesn’t want to install another booth. I want to continue to work the small amt of hrs to be able to take care of my clients. Is this legal for her to ask me to leave, when, and if ever she finds another stylist because of the full time I cannot give her ? She has been through and supported me through this 2 yrs process and I always kept her informed on what I am able to do. I pay rent faithfully every week and fully participate in all other salon “duties”.
She legally can, but it’s not appropriate for her to expect you to work full-time (her only legitimate concern should be whether or not your rent is being paid in full and on time). You’re giving her more than she’s owed in terms of your participation with salon chores, so I’m confused as to why she’s having a problem to begin with. There’s a reasonable solution that’s fairly obvious (hire someone to work your station part-time and reduce your rent to reflect the days you actually occupy it), but she seems either unwilling or unable to recognize it. It sounds to me like she’s trying to get you out, for one reason or another. It’s probably not personal, since you said she stuck by you and you’re clearly an asset to the business. It’s more likely she’s looking for more control than she’s able to exercise over a renter and would rather install a full-time employee in your place. If that’s the case, it’s reasonable, but sort of a crappy thing to do. Have you considered talking to her about maybe becoming an employee and staying on part-time? That way, you still get to work and see your clients, you can eliminate the expenses and hassle that come with renting, and she can find another professional to work the hours you aren’t there.
I need anwers on a question , I was supposedly renting a room in a salon had my own clientel. How ever the owner put a video camera in the room to see what kind of money was exchanged so she could badger me about giving her more rent and commission. Isn’t it illegal to put camera’s in the building in a private room where people are getting undressed including myself and allowing her husband to watch this video. Also she said I was doing illegal things which I know for a fact I wasn’t. I also know that she was trying to turn everyone against me I used a room out of the salon she even allowed me to change it.what is wrong with this picture and should i contact a lawyer I feel as if my rights have been viloated.
The laws on where security cameras can and can’t be placed for each state are here: http://www.camerasurveillancesigns.com/where-place-surveillance-cameras.html
As far as I know, however, it is illegal to place a video camera where people would normally expect privacy (such as bathrooms and rooms used for changing or disrobing for services–this would apply to tanning rooms and massage rooms).
As far as the rent goes, your rent should have been a fixed weekly or monthly rate. No commission. She cannot charge a portion of your gross sales as rent. That’s not how that works. This amount needed to have been decided on and put in writing before you even started working there. Any changes to the rent would then require a new lease and 30 days notice.
I’m also not sure on this, but you may want to ask a lawyer. I don’t think that a landlord can place a camera into a leased property without the leasee’s permission.
As far as cameras- can a salon owner put them in the break room?
Yes. A break room isn’t a place anyone would normally expect a reasonable degree of privacy (as is the case in restrooms and changing rooms). In some states, however, they may not be permitted to record audio, as that may violate the state’s wiretapping laws.
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You are an employee, not an independent contractor. You need to inform the owner that what they’re doing is a violation of federal tax and labor laws. A huge spa in my area that had been operating like that for 25 years just got audited for it. They owe *tons* in back taxes to their past and present staff. It shut them down and bankrupted them. Those contracts you signed are not valid. You need to file an SS-8 with the IRS and get the money back that you’re owed.
I have been a booth renter at a salon for the past 3 years. I recently changed my schedule to part time status and now have been told that I am a “floater”. I am fine with sharing a station with another part time stylist, however, part time people can no longer put combs/brushes in the drawer of the station, it is to remain empty. We can sell our own retail products, however, since we are guaranteed a station we can not store our products at the salon. Basicly we are required to go the the beauty supply upon request of the client (who has time for that?) or sell it from our trunk because we can not stock it in the salon. Where can I find IRS laws that show we are renting a station to be quaranteed on our requested work days?
There are no laws that pertain to that, federal or otherwise. That’s a landlord/tenant situation and I’m certain that no laws exist there either. That’s something you’ll have to settle with the owner.
Hi Tina, I have a situation that I need your help on. The only place I know where to start is the beginning.
I owned a salon in Texas for 10 years. It was a mixed salon of booth renters and salon employees. I sold that business 3 years ago to one of my booth renters and agreed (by contract) to work in the salon as a booth renter for 5 years, so that the new owner could have peace of mind that loyal customers would continue to do business in the salon as she took over and made many changes.
Every employee and every booth renter in the salon has a key. The salon hours are 9-5 Tue – Sat. All booth renters have always been allowed to work their own hours outside of salon hours (with the exception that the salon is closed on Sunday and Monday and no one is allowed to be inside with out permission from the owner on those 2 days).
There have been some changes but overall things at the salon have run very smoothly for the past 3 years with no problems at all….until now….two weeks ago someone left the salon unlocked for the weekend. It was left completely unattended for 4 hours before our business neighbors noticed something was not right and called the owner. Thank goodness nothing was robbed!!!
That was a big mistake that someone made…and unfortunately, no one fessed up to being the last one to leave. And even if you can narrow it down to a few people, she still couldn’t be sure because SO MANY people have keys to the salon. (Employees, booth renters, old employees, cleaning ladies, and even some of the owner’s family members).
This is the big problem…
The owner changed the locks over that weekend and didn’t tell anyone. Some booth renters, including myself had 8:00am appointments on Tuesday and no way to get inside. When we called her to find out what was going on she told us that salon hours are from 9-5 and she will be there at 9 to open the door for us. We were floored and our customers were just left to stand there and wait an hour….which in turn threw our entire day off schedule.
Once the owner arrived, she informed us that all booth renters (7 in total) are no longer allowed to work outside of salon hours. We must all work within the 9-5 time frame. And that we would need to reschedule our appointment books accordingly because at 5:00 the doors will be locked. From now on, no one will get a key but the owner and she will be there every day from 9-5 to let us in.
I have worked in this salon for 17 years, and I have always had the same schedule. 8am – 7pm four days a week. And many of the other booth renters have been there 10 plus years with the exact same scenario. And we don’t know what to do. We are all shocked and heartbroken by her actions.
I agree, leaving the salon door unlocked is a HUGE mistake. And something must be done. But I think she is going a little to far.
My question to you is…
Can she legally do what she is doing?
Can she force her both renters who she has allowed to work before and after salon hours under her ownership for the past 3 years…..to now adhere to a 9-5 schedule only?
As booth renters…Can she legally take our keys from us, regardless of the reason?
I am so lost….please help!!!
This is SUCH a crappy situation! I feel bad for you both! Unfortunately, the IRS changed the keyholding requirements (I think it was last year, but I’m not certain…it may have been two years ago). So, yes, she can legally do what she’s doing, but there are other solutions you can consider that are cheap and can keep everyone happy. Be prepared though, if I were the owner I would expect that the booth renters would chip in together to cover the expense. (With 7 of you, that really shouldn’t be a problem.)
Anyways, there are mechanical deadbolt systems that are very affordable. They are operated with keycards or passcodes. You swipe the card, the door unlocks, you enter, the door locks. You leave the building, the door locks behind you. This allows you to come and go as you please and the owner has a log of who entered and left. These locks can be disengaged during business hours. That’s the solution that worked best at other salons I’ve consulted for. I really think it’s one you should consider. Before the IRS changed the keyholding requirements, owners had the same issue yours did. These mechanical deadbolts make it a non-issue.
Here are some pretty cool ones I was looking at.
This one uses codes or cards. Codes and passkeys can be revoked at any time (great for when a disgruntled renter decides to leave). They can be managed remotely as well.
http://www.gokeyless.com/product/769/2/kaba-eplex-e3766msnl74441-card-lock
Here is another one I was looking at (for my house, lol). It doesn’t get released until March, but it looks really neat too. It can be managed with a phone. It also looks SUPER awesome. Watch their video. https://www.okidokeys.com/
That is a great idea!!!
Thank you so much, I truly believe that is a solution that will make everyone happy!
I’m glad I could help! I really think all owners of booth rental establishments should have this system in place. It protects their building and their staff before/after hours and allows them full control over who can enter and exit without changing locks every time. It also keeps the renters happy because they can use the space as they please on their own schedule.
Quick question! ? In a salon where there are both booth renters and commission pay. …is the salon manager allowed to tell the booth renters that they can’t take any walk-ins?
I actually wrote a post about this HERE.
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WOAH. $400 a week is ROBBERY. Holy shit. Okay, wow. Anyways, I don’t know about TN, but in FL you could rent your own 1200 sqft building for that. That’s insanity.
You need to tell him that his current method puts him in a very scary grey area with the IRS. He should not be providing anyone with product. That’s not his responsibility and doing so could get him into trouble. He needs to lower your rent, quit purchasing product, and drop the retail sales requirement. It’s fine for him to offer a bonus for sales, but requiring renters to sell makes him look more like an employer, not a landlord. Same goes for the product purchasing. Also, if you are paying for a space, that space needs to be available to you when you need it. End of discussion. That is what you’re paying rent for. If he wants to be an employer, tell him to make everyone employees. He can’t have his cake and eat it too.
Hi tina my name is katharine I read alot what you said about taxes and insurances etc, but my questions is I want to void a problem I had 3months ago that really botherd me especially when you put the time and effort in your job that you love as a career! So heres my problems Danielle aka my boss started me off at two different wages to clock in when I started working at the spa! One was pose to be 8.00 an hour as front desk …then 3 days week I would be their assistance in the back cleaning making 5.15 hour well October came along and I pass my state Board so I was expecting my contact to change to commisson making atleast 40 % or more especially when my contact is up and due over 60 days when I ask her to change my hourly to commisson as spa making 40 % and 7.25 as their assistance bc knowing my boss I would still be cleaning after them so I wanted a commission and a hourly rate bc I a lways end up working over time or doing more than license esthetician should be doing( cleaning toliet or doing 6 loads of laundry )while everyone wants to leave , while im still here so I thought to my self why so little of a pay when I work 40 to 48 hours when shes not paying correctly, so I ask her again and her comment. ?. she said I dont deserve more than 5.15 and so we couldnt come on a understanding so I quit . Long story sorry how do I stop this again from happening again?
Well, first read this quote I found online:
“It is you who tells people what you’re worth. Get off the clearance rack and get behind the glass where they keep the valuables.” Don’t accept it. I have two other posts that can help you too. One is more motivational and the other is practical. Read them both. You are your own advocate. Never accept less than you’re worth.
https://thisuglybeautybusiness.com/2014/01/we-are-worth-more-we-deserve-better.html
https://thisuglybeautybusiness.com/2013/07/employment-101-how-to-recognize-bad.html
Hi Tina,
I have been at a salon for almost 3 years in California. I had been out of the hair industry a few years when I started this job and was really eager to start working again.
Before, I had always been an employee being commission and getting my taxes taken out with benefits. But when I started here, I signed a contract as an independent contractor, although I was not paying rent. My contract instead says that i am in exchange “paying 50% of my income to the owner of the establishment”. So I am a commission 1099 stylist. I pay my own taxes, pay for my own health insurance, but I’m on a 50/50 commission basis. I use her products, don’t make commission off of products, and I have to fill out a “time off request form” when I want time off. She also writes my checks.
Other people in the industry tell me that this is weird and I should move on, that I am being taken advantage of because I have the worst part of being commission and the worst part of being an independent contractor. I feel like I’m half and half, and a little confused as to what to do, especially because I have become close with my “boss” over the 3 years. Any advice? Is this legal what she is doing? Is there a loop hole I got caught in?
Thank you!
This is weird and you should move on. It also is a garbage deal for you. Why would you accept 50% when you have to pay 15% of that in federal employment tax (and then whatever your state charges for income tax)? It’s insanity. You’re making less than 35%. Nobody can survive on that. If you are close to your boss, explain to her that she’s doing things wrong and that what she’s doing puts her in a very bad position where she could get audited for misclassification. If you are an independent contractor, you don’t “ask for time off.” That’s something an employee does. You cannot be put on a schedule. You’re self-employed. If she wants you to work her hours, she has to pay employment tax on you.
Not sure if this has been asked, read through alot of the questions, I worked at a salon in SC for 1 1/2 years before I quit, I was paid 50% commission by the owner and received a 1099 at the end of the year, the only thing I had to supply for myself were my tools, which she told me what brand I had to purchase, she supplied all products, we had to be there Tuesday – Saturdays atleast 9-5, sometimes later for evening appointments, I had to ask permission to take vacation, make dr appointments during working hours, etc. I was required to assist if needed, clean, do laundry and participate with any business related events even after hours. I never signed a contract but was responsible for my own taxes, I have been licensed for 25 yrs but always worked as a booth renter until I moved here. Was this legal and is there anything I can do about it?????
The questions you’re asking has been answered in the post itself and about 100 times in the comments. I think I might need to re-write it because I don’t think I made it clear enough, lol. What your owner did was illegal. She should have been paying employment tax on you. Here’s a post about what you need to do about it: https://thisuglybeautybusiness.com/2013/04/improperly-classified-what-to-do-when.html
OMG Tina you are an abundant fountain of beauty business know how! I owe you a Christmas card at least! Here’s my question though: I am booth renter in Ohio and just received notice that I am no longer able to retail my own products in the salon. Is this legal? The owner is very nice and I don’t want to start anything over this if she is right and she can prohibit us from doing so. She says the reason she is doing this is because she thinks people aren’t paying their taxes, and apparently the salon can be held accountable? We don’t have contracts. I asked about this before I started working there and she said it was because she didn’t want people who no longer wanted to be there to feel stuck (it would hurt morale). Also I wouldn’t care very much(I’m the worst retailer out there) but I just bought like $200 in retail(that I can’t return because it was sets that I have already sold parts of). And I don’t want to have to divert it to get my money back… THANKYOU for any advice!!!!!
Well, she’s wrong about being held accountable for the renters’ taxes. That is entirely their problem since they are self-employed. She’s just a landlord. Her hands are clean. She can keep you from retailing your own product but only if those products are ones that she is already selling in the salon’s store. A lot of owners do this to help offset the cost of advertising and stuff. It’s not a bad thing, really. She seems pretty cool, just let her know that you bought a bunch of stuff and you can’t return it. See if she’ll buy it from you or sell it for you. Definitely let her know that she doesn’t have to worry about the renters paying their taxes. It’s totally not her problem.
I’m in a situation where I’m a Booth Renter and I’m not allowed to sell my own retail period. The owner has a “retail area” and we can only sell her retail and get absolutely no kick back when we do so. I also do not have a contract with the owner in any way shape or form. Is this legal? I’m in Missouri.
You need a lease agreement for your own protection, but it’s generally not illegal not to have one, or to rely on a verbal agreement (it’s just not a particularly smart way for either of you to operate). Typically, commercial landlords can restrict their tenant’s ability to compete with their retail boutique as a term of their rental arrangement. That’s not abnormal and I have yet to find any laws against it.
Hi, I own a salon in Ontario Canada. One of my employees quit and gave two weeks notice. Do I legally have to keep her on for two weeks or can I ask her to leave right away.
The rules on this are the same as in the states. Once she provides notice of termination, it is up to you whether or not to let her work through that notice. It’s nice that she offered, but you don’t have to keep her on throughout it.
Hi Tina. My husband is currently a booth renter at a salon in Los Angeles. He has a loyal clientele who have stayed with him over the years, and is responsible for a lot of the traffic that the salon and other stylists sees. My question is, as he is embarking on a new venture at a new salon, what are the the rules in regards to his OLD place of work passing on the new salon information to his clients that call in? We are fearful the the greedy owner will claim to not know in an effort to keep his extensive client list. Are there legal guidelines for this type of thing?
Thank you.
Since he was a booth renter, he is his own boss. Those client records are his and have been his to begin with. The owner has absolutely no claim to them. Honestly, she shouldn’t even have them to begin with. Was she requiring him to use a central reception desk? Because that is not legal or appropriate.
Hi there! I worked strickly commission at a salon. However. I brought in all of my OWN spa skin care, waxing, supplies and furniture.
I never paid booth rent. I quit a couple months ago and honestly have had a hard time to try to go get all of my things due to horrible snow storms, no babysitter and work schedule. The owner NEVER called to touch base..so I finally called to inform her I was coming in to get mg things. She then told me they’re not there and I owe her 3 months booth rent for leaving my things for 7 days a week. She never told me that when I quit or called or anything! We just filed bankruptcy and I’m NOT paying for something she never made me aware of? She also removed all of my things without consulting with me and I guess she had water damage where all of my things were and I don’t even know if it’s ruined. I live in Indiana too. Thanks. I also never signed anything stating I had to pay rent.
For this issue, you may want to check this post: https://thisuglybeautybusiness.com/2013/01/punishment-through-theft-what-is-and.html
It has more specific answers regarding what happens with personal property once a renter/employee leaves a salon. She can try to charge you a storage fee, but she was required to have notified you in writing that she was doing so. Read that post! It’ll tell you all you need to know. If you have any more questions, comment on that post and I’ll help any way I can.
Hi. I am commissioned 25% in my salon. I do not have taxes taken out of my checks. My boss changes the schedule all the time. I was supposed to be off today actually. But my boss emailed my at 8:00 last night saying to come in from 10-5. I had to cancel all my wedding planning activities for the day. Then at 11 last night (I was already asleep) she texted me saying come in 12-6. Can she keep changing the schedule like this with such little notice? She will also make me stay and clean when I am done with clients for the day. We have a checklist of things we have to clean at the end of the night. If we are scheduled to be off hours before closing time, she still makes us doing closing procedures. (makes no sense to clean for the night if there are still other people working and will mess up what we just cleaned). I have gotten yelled at and docked pay because I have cleaned “too little”. For example, I will clean the mirrors and sweep the office and stock the stations and then hep other employees set up the rest of their appointments before leaving. There has never been a rule to where it says we have to do a certain number of things before we have to leave. Is it legal for her to keep changing my commission pay when she is in a bad mood when I leave? I feel like she only gets upset with my cleaning skills when she is having issues at home. Any time I try and talk to her about my hours, I get yelled at by her and its her way only. Thank you, I am so young in this business and i am confused. I might have more to add and I will post it in the comments. I am also in Illinois if that helps. 🙂
Wow. Okay. First of all, explain to me why you accepted a job that pays you 25%? That is absolutely ludicrous. If you aren’t having taxes taken out of your check, you’re really making less than 10% since you are required to pay 15% to the IRS in self-employment tax. Illinois income tax is 5%, so YOU ARE MAKING 5%. That’s it.
If you read the article above, it should be pretty obvious to you that literally everything this owner has done is illegal. She cannot dock pay from you like that, that is wage theft.
You need to find a lawyer that specializes in employment law immediately. Like, TODAY. If you are at work right now, walk the fuck out. This is bullshit. I’m legitimately angry about this. This woman needs to be dealt with severely. You need to report her to your local labor department, file an SS-8 with the IRS, and have her shut down for what she’s done. This is INSANE.
Better yet, give her my information and tell her to explain herself to me. She’ll need the practice for when she’s sitting in front of a judge. She’s a thief and a parasite. People that abuse American workers like that need to be dealt with like terrorists. What she’s doing is a complete abuse of you. It’s a violation. If I had her information, she would be getting a phone call right now (after I reported her to every agency I can think of).
I am serious. Please, please get out of there. Tell your coworkers the same.
Thank you! I will look into the labor department stuff. Im sick of her controlling my life. I’m getting married in a few months and have so much to do and no time since I am always working. We are starting to be open 7 days a week, so we will all be working 7 days a week. As soon as I find a new job, I am so out that day.And will never look back!!!!! I will also be reporting to her to the health department, we do not follow half of the regulations!
Every day you spend there is one day too many. After gas, you are making nothing. Bring that to her attention and ask her if she thinks you’re stupid. You have literally no incentive to work there anymore. Add to that the fact that she’s a complete bitch and a slave driver, so she doesn’t exactly inspire loyalty. I am stunned that she was even able to find employees willing to put up with that garbage to begin with.
We have salon Assistant/Cosmetologist who is an employee. When walk-in present themselves and she services their hair services needs. Should she still continue to receive her hourly pay? She receive commission pay from the walk in.
If she’s being expected to work as your assistant, she should continue to get paid for that when she’s acting in that capacity. If she’s going to be a cosmetologist, you should bring in another assistant. Having her work both positions at separate compensation rates is setting yourself up for conflict. Clients may also question her skills if she’s floating from assistant to stylist and back. If she’s licensed and you consider her good enough work on clients, why not give her a station?
I am so glad I found this blog! I have been looking for some good resources on booth renting and unfortunately I am finding that there just isn’t a lot out there (or I just don’t know where to find it).
I am currently working as a commission only stylist. The owner of my salon has been planning on switching over all of her employees to booth renters for some time. The problem is that neither the salon owner or any of the current employees have worked within a booth rental situation before. I am ready to take my career to the next step, but very nervous because I really feel I have no guidelines on how to start booth rental. The state cos board in Ohio where I work, has basically nothing to offer except some basic tax forms, and the famous IRS article describing the difference between contractors and employees. Other than that, all I know is that I will keep 100% of my earnings, make my own schedule within salon hours, and provide my own products and materials. I am waiting on my employer to see a copy of our rental contract before we start, but I am not sure what to expect because to be honest, she has pulled some shady stuff in the past on myself and other employees. Can you give me some links or tips for those starting out, or direct me to who I should consult with first (accountant, attorney, or both?) Thank you!
Well, if you want you can type in “booth rent” in the search bar at the top of the page on the right hand side. All of my posts are labeled because I’m OCD like that, lol. Any posts that have anything to do with booth rental will come up in that search.
Have your owner read these posts. It’s like a crash course in booth rental salon ownership:
https://thisuglybeautybusiness.com/2013/12/bringing-in-booth-renters-are-booth.html
https://thisuglybeautybusiness.com/2013/11/why-i-hate-booth-rental-business-model.html
https://thisuglybeautybusiness.com/2013/01/staff-compensation-comparison-of.html
https://thisuglybeautybusiness.com/2013/11/how-to-manage-booth-renters-without.html
https://thisuglybeautybusiness.com/2013/12/changing-booth-rental-salon-structure.html
https://thisuglybeautybusiness.com/2012/11/can-i-charge-my-booth-renters-fee-for.html
https://thisuglybeautybusiness.com/2013/11/how-to-fire-evict-booth-renter.html
Then, you and your coworkers can read these posts:
https://thisuglybeautybusiness.com/2013/04/booth-renting-going-out-on-your-own.html
https://thisuglybeautybusiness.com/2013/08/booth-renters-be-your-own-boss.html
https://thisuglybeautybusiness.com/2013/01/punishment-through-theft-what-is-and.html
Hi. I have a question that I really need answers to. I have been at a company for over a year now and to me it seems as though I’m working under a double standard. They want to make me work like an employee and pay me as an independant contractor. They do not take out taxes, make me file a 1099 etc. I am not paid an hourly wage. It’s almost like a sliding scale. If business is really bad I get $50/day 🙁 which equals $500 checks every 2 weeks. Plus my tips. If my commission equals more than that- then I get more. I do not understand and after doing to math it’s less than minimum wage at times. They even have the nerve to tell me I can’t go to a Dr appointment for a necessary sonogram for my baby. PLEASE… Let me know what you can about this situation. Thank you.
Obviously, this situation is wrong and illegal. You are not an independent contractor. They need to be paying your employment taxes. You need to read this post and follow the instructions in it to get the money you’re owed back. Once you pay your employment taxes, you’re making nothing. Find another job and get out of there.
https://thisuglybeautybusiness.com/2013/04/improperly-classified-what-to-do-when.html
I got screwed on my taxes so bad that since I had to file a 1099, I went ahead and claimed deductions and such to help make up for this catastrophe. Is that going to hurt me if I file this form with the irs?
I’m not sure. I doubt it’ll hurt you as much as it’ll hurt her. She’ll be forced to pay your back taxes and the taxes for every employee (past and present). She’ll also be fined.
Hi do u have an article on what an commision base employee is?
Well, technically you can be commission and be an employee or independent contractor. It all depends on whether or not your owner is taking taxes out. So, if you look at your check and your boss is withholding and matching your tax contribution, you are an employee. If your boss is not, you are an independent contractor.
Thank you.
Hey Tina, quick question for you.
I was recently fired from my job of 4 years at a high end, full service salon/spa . I was working as an employee (I received a w2 every year), strictly commission. I was able to come and go based on my appointments, meaning I didn’t have to stay and twiddle my thumbs if there was nothing on the books, which was actually really nice. My days off are Sunday and Monday and on those days I typically spend my time helping out at my mother-in-law’s nail salon. I met my husband 3 years ago and during those years I have always a lot of my free time helping out by answering the phone and taking walk-in wax appointments when it was really busy. Over the years I have built a very small clientele and my previous manager at my full time job never minded that I worked elsewhere as long as it never interfered with my work schedule or my availability. That being said, recently a coworker overheard me speaking to another coworker about working at my mother in laws salon and she took it upon herself to inform my bosses. She misunderstood my conversation and told them I was stealing clients from our spa and funneling them to my mother in laws nail salon. NOT TRUE. I am not compensated for the work that I do at my mother in laws salon, I help out simply because they are my family. My mother in laws business is also much smaller than my previous place of employment and she charges a lot less for waxes services than I did at the spa. Based on that information alone, I would never ask my clients at the spa to see me at the nail salon because I do not get compensated for it. Was it wrong for them to fire me because of this? I did not sign a non-compete and although there is a policy listed in our handbook about working for another salon, I was not getting compensated therefore I did not think it applied to me.
Hi,
I have a couple of questions..A little background here first.
I own a small salon in Mn. Before buying the salon, I had previously worked there as an employee for many years. The other employee stayed on with me, but after 2 years decided to go to booth rental. Fine with me, I too like it better. I originally had a lease with the building owner, but after the lease ran out, the building had changed ownership, and the new landlord and I never got around to signing a new lease so I am on a month to month, which is fine with me, it’s been that way for many years..even with the building having new ownership 2 more times since then. When the gal switched over to booth rental, I never had her sign a lease with me, we’ve worked together for many years since and have never had a serious problem or any problem that we couldn’t come to terms with eachother on. I came across this blog, when the subject of business cards came up.. I had new ones made for me and she needed some also,so she told my guy who was making them how she wanted them. she wanted stylist/owner on them but still my logo, address, and phone along with her cell #. I didn’t think it was appropriate that she should have owner on the card with my business name on it, so I told her that she had the option of doing a generic card with her name owner/stylist and her cell but could not use my shop name, address or phone #.. unless she stated “located” at.. That is how I came across this blog, and read onto some interesting things..after reading I’m thinking that I should have a written lease aggreement with her, for protection, on both parts…even tho it may seem a formality at this point, you never know what the future may hold right?
My question is this.. where can I find a sample lease to go by? and although she is a booth renter, is it wrong for me to expect that she keeps her booth in state board required conditon, wears appropriate clothing, ( clean, untorn, no bedhead hair under a cap,eating at the front desk, picking up after herself or her clients in reception room, loud, abrasive behavior or language?) These are all common sense things and I understand that I can’t tell her what to do, but can I state these things in a lease? I would imagine that there would be something in the lease that requires some sort of professinalism in the salon as there are other clients in there as well. These are NOT problems that I have with this person, but if I were to take on another renter, I would want to make sure that I’m covering myself. I’ve heard horror stories of salon owners walking into their salons after hours and finding their renters inside doing some very non professional things if you get my drift. Right now the verbal aggreement is pretty basic, the salon is open tues thru sat..her rent is based on her working those 5 days.. if she wants to work sun or mon, she’s to pay extra for those days worked ( tho she has and I’ve never charged her for it)..she helps out with shop cleanliness, we take appts for eachother, and I give her 1 week a year rent free for her vacation.. So we give and take and it works well..
So to recap ( sorry)..my questions are..
Is there a sample lease available that I could follow,
can I state certain professional requirements such as no offensive behavior, professional clothing and cleanliness
adhere to state rules and regulations at all times
responsible for picking up after themselves and their clients
Pretty basic stuff, but from what I’m reading here it looks like it pretty much ALL has to be documented.
thanks for any input!
These are all really good questions. You were doing the right thing by telling her not to put your business information. She is her own business owner and needs to advertise that with her own name. She can’t list herself as an “owner” of your establishment. So, good job on that.
To answer your questions:
1.) Yes, there are a ton of sample leases online. Do not follow them. Have the lease written by an attorney that specializes in contract law then have them looked over by an attorney that specializes in employment law. It is WELL WORTH the money you spend. A well-written lease protects you in the long-run and if it is written properly, can be used for every booth renter you ever hire. Do not ever attempt to write your own lease. Ever. Not even once. I’ve seen too many owners write bad leases that ended up either incriminating them for crossing lines into “employer” territory or worse, having invalidated it entirely by not writing it properly. Go to a professional where this is concerned. It is the single most important document you have as a booth rental establishment owner.
2.) You can have requirements, but they must be generalized and apply to the common areas. You should also back up as many of those requirements citing health codes and cosmetology laws as possible. For example, if your state requires that cosmetologists not wear tank tops to work, that needs to be reflected in the lease, citing the specific statute. You definitely can’t set any kind of dress code, personal hygiene code, or tell them how to do business. (So omit anything about how their hair should be styled or what kind of makeup or jewelry they’re permitted to wear.) You can put in “common area conduct codes.” Those would include no eating at the reception desk, no profanity, etc. It would also include standards about keeping their station and all common areas clean. It cannot include any “chores.” Such as cleaning bathrooms, scrubbing floors, etc.
Whatever you do, make sure that the lawyer that drafts the lease KNOWS the difference between a renter and an employee and the rules you need to abide by when writing the lease. No non-competes. No “schedules.” No “employee handbook” type guidelines. You are a landlord. They are a tenant running their own business. Don’t cross the line and make your role questionable to the IRS. Doing so would completely invalidate the lease and incriminate you for misclassification.
Well, it sounds to me like the handbook didn’t specify whether or not you had to be compensated. Technically, you were working at another salon. You weren’t being compensated for it and your intentions weren’t malicious, but you did violate the terms of your employment at the salon.
Honestly, if I were the owner, I wouldn’t have fired you. I understand why she did, but if you explained the situation to her the way you did to me, anyone with common sense can see that you would have made out better financially at the salon than at your mother-in-law’s. You wouldn’t have brought clients there. I fully believe that and the owner should have too.
Then again, she wrote the policies for a reason. If the other employees know that you’re violating it and the owner isn’t enforcing it, they’ll expect the same treatment. She did it to make an example and to deter other staff members from violating the agreement.
Hi Tina! First off,I want to thank you for all of the information that you provide in your articles for us salon professionals, and also for taking the time to comment on our questions.
I hope I’m not asking a question that had already been answered…I tried to read through before hand. My question is this: I have been working in a salon as a commissioned employee (I receive a w2) for the last 4 years (We’re in CO.) Every month, we have “mandatory” staff meetings. They are during normal business hours that we would be seeing guests, so the salon is “closed” and our books are marked off. We are required to attend, but are not compensated for these meetings. Should we be receiving compensation? We are required to clock in for them.
Another question is about our tips. All credit card tips are held and put on our paychecks. In our handbook it states that 10% of our tips are deducted from our paychecks and distributed to the front desk staff. Is this ok?
Lastly, I’m actually leaving this salon next week. I plan to give my written 2 week notice, but since I’ve worked there for 4 years, I know that I’ll be told to leave immediately (which is fine.) I’m going to booth rent and the owner is great. I believe that she is well educated in the aspects of running her business (a booth rental salon) but I have one question for you. I am not allowed to retail my own product. After reading your articles, I understand why some salons prohibit you from retailing the lines that they sell, but is it right that I cannot retail anything at all?
I really appreciate your response to these questions. Thank you for all that you do! Take care.
If you’re clocked in and being expected to work, you need to be getting compensated somehow.
You can read more about that here:
https://thisuglybeautybusiness.com/2013/10/engaged-to-wait-salon-employees-stop.html
It’s illegal for your tips to be directed towards cost-of-doing-business expenses (or any expenses that aren’t forced on the owner by a court order or those you don’t approve of in writing), and a receptionist is a business expense that the owner is responsible for.
Colorado law states two things regarding tip sharing and tip claims:
1.) “According to Colorado wage law, employers may require employees to share or allocate tips and gratuities on a pre-established basis with other employees. Under Wage Order 30, if the employer requires tipped employees to share their tips with other employees who do not customarily and regularly receive tips (such as management or food preparers), the tip credit towards minimum wage is nullified.” This means that the owner is putting herself in a really shitty position since “Under Wage Order 30, employers of tipped employees must pay a cash wage of at least $4.98 per hour if they claim a tip credit against their minimum hourly wage obligation.” In your state, if an employee’s tips combined with the employer’s cash wage of at least $4.98 per hour do not equal the minimum hourly wage, the employer must make up the difference in cash wages. It is the policy of the Division of Labor that this rule applies on a weekly basis. The employee’s tips combined with the employer’s $4.98 cash wage MUST equal the minimum hourly wage when computed over a seven-day workweek in order for the employer to avoid making up any difference. Without that tip credit, making that requirement is harder, but I have a feeling she either doesn’t realize she’s responsible for actually paying her staff a living wage or doesn’t give a shit.
2.) “Colorado wage law allows for an employer to assert claim to, right of ownership in, or control over tips only if: the employer posts a printed card at least 12 inches by 15 inches in size with letters one-half inch high in a conspicuous location at the place of business. The card must contain a notice to the general public that all tips or gratuities given by the patron are not the property of the employee, but instead belong to the employer. If the employer does not post a printed card detailing tip ownership as described above, the employer may not exert any control over cash tips designated for an employee.”
Anyways, here’s the link to the CDLE website with those laws outlined for you. http://www.colorado.gov/cs/Satellite/CDLE-LaborLaws/CDLE/1248095305428
As far as the retailing in the booth rental salon is concerned, there’s not much you can do about that since no laws specifically govern company policies that don’t affect wage or employee abuse. That policy can be viewed as a conflict of interest. It’s the same reason shopping center owners won’t rent to two similar businesses in the same complex. If you want to sell products and the owner won’t allow you to, there really isn’t anything that you can do about it but choose not to rent from her.
i am a nail tech in minnesota I pay rent for my nail station I work every other week, I have 2 clients who come in every 3 weeks I have asked them to try either every 2 or every 4 th week to get them on the schedule with my other 2 wk clients. do I have to inform the salon owner of my change seeing she will not be receiving rent for that day that I am eliminating. p.s . she charges me 1/2 of what I make for that one day do you know what the going rate is for a renter as a nail tech in mn?
I don’t know what the going rate in MN is but I can tell you right now that your current arrangement is not legal. 50% is too much to be asking for rent. You are getting screwed. 15% of what you make goes to the IRS for being self-employed. 5.45% of your total income goes to MN for income tax. After product,license renewal fees, professional liability insurance, and gas…you are probably not making much at all. Get the hell out of there. The owner needs to be charging you a flat rate. Period. Not taking half your income.
Yes I know I’m getting screwed but I can’t leave and expect my clients to follow so I’m stuck… another question for you she charges me 140 for the week I only work 3 days a week am I getting screwed with this too having to pay for the days I’m not there?. she also tells us what we cannot wear( jeans )we also are given a job to do at the end of our day before we can leave the shop, she used to have a cleaning person who came it but it cost her too much. we have no receptionist and she requires us to get up leave our client to answer the phone it is a big issue with us who rent there. she says she would hire a receptionist but then she would have to raise our rent to cover it.
She can charge you a weekly rate regardless of whether or not you’re present on those days. You set your hours, but if you’re not there that space is still being reserved for you so you have to pay for it. She absolutely CAN NOT tell you what to wear or assign you chores. Those chores are her responsibility. As for the receptionist issue, you shouldn’t be using one at all. As renters, you need to be managing your clientele yourself since you own your own businesses. This means they need to call your cell phone, text your, email you, leave messages, or send smoke signals. They can’t be calling the main salon phone number and they really shouldn’t be since that gives the owner the ability to take their information and poach your clientele from you if you leave.
Hello I have a few questions that I would love some clarification on. 1. I work commission 60% and its been that was for the 8years I’ve worked here and just last week the owner said she has to change it to 50% because she has to get caught up with shop rent. No notice and made it effective that she week and she also takes 10% of the tips. I get a 1099. Just wondering if that is right. We have no written contract. I also have to work scheduled days and hours.
I am a booth renter in Texas and just received business a Personal Property Annual Rendition of Taxable property from the county appraisal district. Do we really have to fill this out? I do own my blow-dryer scissors and general equipment. However the station belongs to the owner. Seems like this something the owner should have to do. We all received this same letter. Thanks in advance.
None of that is legal. You need to tell her she’s breaking federal tax laws and labor laws.
As a booth renter, you are a business owner. So yeah, you do have to fill out the rendition. It should be easy for you though, since you don’t have much to report, lol.
My spouse is a booth renter at a salon and the owner just started a “mandatory Saturday” where she has to open and close the salon regardless of whether or nor she’s booked appointments. I said that’s illegal, am I right? It’s in indiana if that makes a difference.
Completely illegal. The owner can’t have any control over her schedule at all. She can’t make anything “mandatory.” She isn’t your wife’s boss.
Hello! I have been reading all of the comments trying to find something to relate to my situtaion!
Here it is! I am a booth renter and recently the salon owner told me I could not take walk-ins anymore. My “contract” is signed for a year but the contract doesnt say i cant take walk-ins so does that make it ‘void’ until she made a new one? I dont plan to stay here much longer since i wouldnt be able to afford the rent withhout walk-ins as it is a new salon with no much established clientele. So can I leave without consequences?
Also the “contract” doesnt even have her signature just mine and very basic things on it. She is so new to the beauty industry (2-3 years) and first time salon owner. So does the contract even matter? or is it just a piece of paper now?
Unfortunately, the owner doesn’t owe you walk ins. You should have been able to carry the rent without her contribution to your clientele. Her refusal to feed you business doesn’t affect the lease at all, so it isn’t invalid now that she has decided not to give them to you. As a renter, you’re a business owner. Whether or not the salon had an established clientele is irrelevant. The contract is a lease, in which you agreed to pay a set amount in exchange for a place to conduct your business. It is still very much valid, regardless of how inexperienced the owner is. If you want to get out of it, you can provide her with written, 30 day notice that you’re leaving. If you have a decent relationship with her, she might let you go without penalty.
Seriously though, if you didn’t have a solid book, you shouldn’t have rented for exactly this reason. You can’t rely on your landlord (which is exactly what the owner is) to provide you with enough business to sustain your rent. You’re not the only person that has been put into this position, so don’t beat yourself up over it. Booth rental can be confusing, especially in a blended salon. A lot of renters don’t really understand what a salon owner’s role is in the booth rental arrangement. Here are some posts that help clarify it:
https://thisuglybeautybusiness.com/2013/08/booth-renters-be-your-own-boss.html
https://thisuglybeautybusiness.com/2012/11/can-i-charge-my-booth-renters-fee-for.html
I definitely didnt have solid book this is my first place working out of beauty school and she offered me time to build clientele and then didnt give me notice that she wouldnt let me anymore. I know she doesnt have to let me but now i need to find a place i can afford and along with my clients i do have.
I would like to know some more about the contracts and what makes them legitimate. The contract doesnt have set amount and it doesnt have her signature so i just want to know for future situations what a contract or lease shoukd include and if it is not followed what the penalties are.
Oh hun, that happens all the time. Don’t feel bad at all. A lot of new graduates get taken in by salon owners that rent out booths who make them a whole bunch of promises about how “booth renting is so much better than being an employee.” For established professional, booth renting can be a whole lot better than employment, but for new graduates, it absolutely blows. You should look for a job in a salon as an employee while you build up your book and make a name for yourself.
The lease absolutely needed to have a set amount. Her signature isn’t really necessary since she’s the one that wrote it and it most likely has her letterhead on it. Since she set the terms, it stands to reason that she agreed to abide by them. Here are all the posts I’ve written about contracts:
https://thisuglybeautybusiness.com/search/label/Contracts
When you’re looking over a lease, you’re looking for these things:
1.) a set amount of rent to be paid.
2.) early termination clauses (what happens if you terminate early and what is expected of you if you want to terminate early)
3.) any clauses that seem shady or suspect (if the owner is trying to give you “rules” or dictate how you are to do business, it’s not good…don’t sign it).
Here are some other posts that might help you as you look for another place to go:
https://thisuglybeautybusiness.com/search/label/Shady%20Business%20Practices
https://thisuglybeautybusiness.com/2014/03/the-table-of-contents.html
Thank you for your words and time! 🙂 I needed this knowledge and i found it!
Any time! If you ever have any questions or concerns about anywhere you go in the future, whether you rent or decide to become an employee, email me and I’ll do what I can to help!
Hi! I commented with a few questions about a month ago on my job situation. (Treated as employee; paid as an IC) I ended up quitting the job and now I’m wondering if I should report this couple and their “business” to the labor board. I really feel as though there’s a lot of shady stuff going on there.. For example: selling counterfeit flat irons, lying to every customer- saying they’re not owners and also having all their city displayed paperwork with tape covering certain details. Please give me your opinion! Thanks! Carrie
Hello Tina, I am a independent stylist renting a booth $50 per day. I schedule my clients Thursday and Saturday. If I have no clients say on Saturday and I do not rent the chair that day, my spa owner wants me to pay for that day even though no services we ever rendered.
That sounds super shady. I would report it. If they have nothing to hide, they have nothing to worry about, but chances are that if they’re lying and withholding information–things aren’t right.
If you’re renting the booth for those specific days and the owner is holding your booth for you for those specific days, you have to pay for them regardless of whether or not anybody books. It’s the same thing where I run my business. Even if my business is closed, I still have to pay for the space since I am reserving it.
Thanks Tina, sooooo glad to see a site with such valuable information for both owner and renter !!!
Thanks! 😀
If you are an employee and never signed a contract can an owner make you sign a contract later on saying that if you call out of work you are responsible to pay the owner back for the clients they had to reschedule?
The owner can have you sign a contract after the fact, but those terms are ridiculous. Don’t sign it. I’m fairly certain it isn’t legal to penalize your employees for being sick, but as far as I know there are no specific statutes out there that prohibit it outright because most people aren’t stupid enough or rude enough to try and pull something so unethical and inappropriate. That’s poor business policy and piss poor management. An owner that treats her staff like that doesn’t deserve to have staff at all. People get sick. It happens. She absolutely should not be profiting off of that. Tell her that she desperately needs to take some business management classes and get familiar with employment law before she learns some lessons the hard way.
Hi, I just left a salon chain where i was classified as ic, but not treated so. We get paid 40%, give money for back bar, are expected to work all day, told we were not employees so we couldn’t take a lunch had to eat in between clients, expected to do clean ups, and told corporate was watching us on the camera. What I need to know is who do I report them to? I’m in Ohio and their corporate offices are in Michigan, with other locations in 5 states.
Holy crap! yeah, they definitely need to be reported. First, you need to file an SS8 with the IRS. File a complaint with the DOL (http://www.dol.gov/wecanhelp/howtofilecomplaint.htm) and contact your local labor board (http://www.workplacefairness.org/agencies_OH#4).
Ohio Department of Commerce
Division of Labor and Worker Safety
Wage and Hour Bureau
50 West Broad Street
Columbus, OH 43215
Phone: (614) 644-2239
E-Mail: webmaster@wagehour.com.state.oh.us
Web Address: http://198.234.41.198/w3/webwh.nsf?Opendatabase
Once you’ve done that, contact the Ohio attorney general ASAP. http://www.ohioattorneygeneral.gov/About-AG/Organizational-Structure/labor-relations.aspx
You also need to contact the Michigan labor department and file a complaint there.
Michigan Department of Labor & Economic Growth
Wage & Hour Division
7150 Harris Drive, Box 30476
Lansing, MI 48909-7976
Phone: (517) 322-1825
Web Address: http://www.michigan.gov/dleg/0,1607,7-154-27673—,00.html
And contact their attorney general as well: http://www.michigan.gov/ag
Tell them all about the work conditions, the illegal classification, and the clear violations of the Fair Labor Standards Act. That employer needs to be shut down immediately.
Thank you so much for the information, I will get on that first thing in the morning.
Hi Tina. Thank you for the great info you provide on this site. It is much appreciated. I read the above article pretty closely and don’t think this specific issue was addressed: I understand that is it unethical and illegal for an employee to solicit former clients that belong to the salon but is there a distinction between an employee and and an independent contractor doing so? Also, does it matter if I was fired or voluntary quit? Finally, does it matter that many of these clients have been coming to the salon long before the current owner purchased the place? Thank you!
This article actually doesn’t address non-solicitation clauses since that’s an entirely different issue altogether. It actually is NOT illegal for an ex-employee to solicit former clients *unless* that employee signed a non-solicitation agreement. Every owner needs to have one. They are crucial to protecting your salon’s clientele. It doesn’t matter if they’re employees or independent contractors. Independent contractors can never sign non-competes (since it’s directly counter to their classification) but they can be required to sign non-solicitations.
The problem with taking clients from a recently purchased business is that the new owner presumably paid for that clientele, so a lawsuit could be filed based on that theft. However, that owner really should have prepared in advance of the purchase and ensured that the clientele were protected from poaching before the sale was made. Anyways, I have more articles on contracts specifically below:
https://thisuglybeautybusiness.com/search/label/Contracts
Thank you for the reply. It was very helpful. I don’t understand how taking a client is ‘theft.’ We live in a free enterprise that encourages competition. Barring any contract or improper means of solicitation, I don’t see how the owner would have any right to sue a former employer (or contractor) for contacting clients. Thank you again.
Yeah, I’m not entirely sure they would win, but they certainly would have the ability to try. Whether or not they would come out on top in that situation is really a toss up.
Hi Tina,
I stumbled across this post, due to my own work conflicts. I want to see if I’m being paranoid/unreasonable or if I’m actually being screwed over. I work in a salon in Florida, and am a paid employee. When I was hired in December of this past year, I was still in cosmetology school, about two weeks away from graduating. I was hired on as the receptionist and assistant, making $9.00 an hour and guaranteed at least 20 hours a week. The women I work with can be kind of catty and rather rude sometimes, but I usually just brush it off. I do a lot at my job, literally everything. There is almost never a slow moment when I have time to take a mini breather or sit down. I finally got my license a little over a month ago now, and around that time is when we hired a “backup” receptionist, who is also licensed recently. I have been told by many professional stylists that the quality of work that I put out is very impressive for my age, and that I will go very far in this industry. That being said, I feel like these women I work with are never satisfiable. Granted, I know I have a lot to learn and am still assisting/learning new things, but don’t fix something that’s not broken right ? I will take “model” friends and family, or even walk in clients sometimes. She has told me that she will either pay me my hourly, or 50% commission with our bi-weekly checks, whichever is greater. I have done a lot of highlight/balayage/ombre work since I have been there, and everyone says they love their hair and are so happy, but these women always find things to nit pick me about. They want me to change my technique in how I apply, but I don’t like how their services always turn out.. Do I have to listen to them, even if I know the way I do things now is correct ? I’ve assisted other talented stylists before, and feel I have learned from some very great people in the area. I like the quality of work I put out, so do my clients. Also, if we get groupon clients, these women will tell me just to rush it, and basically give someone a crap color or cut, because they are getting such a “deal” anyways. They want me to rush service people, and I don’t think that is right or fair. Everyone should be treated the same, no matter how much they are paying for their hair. I am also the only makeup artist there, and we recently did a wedding. I did two makeups priced at $65, and hair priced at $60, and all she gave me was tip money because I got paid my hourly.. it seems like she is not giving me whichever is greater for the day (commission or hourly), rather quite the opposite. All she cares about is money.
part 2 coming
I know i’ve been ranting on, I guess I just feel as though I do a lot, and am not treated the right way. I can take constructive criticism, but don’t like constantly being undermined. She complains about paying someone who “doesn’t bring money in”, but pays two people (myself and the other receptionist) to do the same job, except the other girl doesn’t do anything all day but sit at the desk while I am busy. I usually end up cleaning up after her all day after I have taken my own clients. She complains about her, and how she should just get rid of her, but she doesn’t do anything. I just feel extremely under compensated for everything I do throughout the day, and feel as though they look down on me as a person and I am the brunt of all of their jokes. I don’t know what I should do. Is this wrong ? Or is this just the salon world ? Do I stay and hope things get better, or find another salon that might actually treat me fairly, and compensate me for what I feel I am worth ?
There are probably a lot of holes in my story, I am writing this as quickly as I can manage.. it’s just been eating away at me. I love what I do, I have a fierce passion about this industry. But I don’t like waking up and dreading going into work either.. I used to love going there. I have given up a lot to work at this salon.. sometimes I just feel like it isn’t worth it.
Thank you.
This was a continued post
To me it sounds like you already know your answer. You’re clearly not happy there. On one hand, the harsh, constant criticism can temper you and make you a stronger professional, but on the other, it seems to me as if the criticism is a manifestation of your coworkers’ jealousy. They want you to do things their way, but the method by which you achieve results shouldn’t matter if the results are satisfactory (which they clearly are if your clients are happy and returning).
As far as pay is concerned, you should keep very careful track of your services and hours worked and compare the two at the end of every pay period. It’s a pain in the ass, but if your boss is shorting you, she’s not worth working for. Never work for a thief. Someone that is willing to steal from you does not have any integrity. That person doesn’t deserve your loyalty or your talents.
These women are fools if they’re advising you to “rush” anything. Groupon or not, you’re right, they all deserve to experience the same level of service you would give to them if they were paying full price. That is what turns a Groupon client into a regular. (It hardly ever happens since Groupon women are parasites and dealseekers, but it can–especially for a hairdresser. Good stylists and colorists are very difficult to find.) Groupons are what I call, “total losses.” They will never bring the salon profit. What they will do is get asses into chairs so clients can see and experience the salon. The only time you see a return on a Groupon is if you can get the clients to rebook and return. Essentially, you are working for free for the opportunity to expose yourself and potentially gain business. To “rush” clients would be a huge mistake. What you end up with when you half-ass Groupon clients is a SHIT TON of negative reviews and a whole legion of people badmouthing your name and the salon you work in. If these women are rushing, your boss needs to correct that immediately or the damage done will be irreversible.
You’ve got sense though, so you already know better than to take that bullshit advice from those women. When those clients leave your chair, they leave with your signature on their head…whether they paid $15 or $500, it’s your name they’ll speak when others ask who they went to. Your reputation is worth more than the money you would have made with a quick turnover.
My advice to you, if you really want to stay, is to talk with your owner privately and explain your aggravation with your coworkers. Bring up the fact that they’re trying to get you to change your technique. You earned your license…and recently. If anyone knows the newest and most efficient ways to do things, it’s you. Explain that you want detailed pay stubs, outlining your total service and retail sales and your hourly compensation. Explain that you’ll be tracking it yourself as well to ensure that your checks aren’t shorted. Nothing will change if you don’t bring up your problems and demand that they be corrected. Worst case scenario: you lose your job. From the sounds of things, you might not be considering it a huge loss at this point, lol. Nobody deserves to be unhappy or disrespected at their workplace. You might be newly licensed, but those women are no better than you and certainly don’t have any right to treat you like some kind of peon. That behavior is immature and unprofessional. It’s pathetic and screams of insecurity. They need to grow up and work together as a team. They should be supporting and uplifting you, not berating you and cutting you down. Your boss should be stepping in and managing them, but it seems as if her management skills are either nonexistent or need some serious improvement. In this case, it’s up to you to be the voice of reason and stand up for yourself.
i am a salon owner and i need to remove a chair rental from the salon, He is loud and annoys other clients therfore causing us to loose clients,
he is not on a contract in any written way.
where do i stand in asking him to leave
Even though he doesn’t have a written lease, you’ve been accepting money in exchange for space, so that constitutes a common law lease. All the same rules apply to a common law verbal lease that apply to a written lease. You’ll have to serve him a formal, written eviction notice, giving him 30 days to vacate the property. If he asks you why he’s being evicted, you don’t have to tell him (but you probably should so that he can learn from the experience and hopefully not repeat his behavior in his next place of employment).
Thank you for your response. The only issue is that the salon owner is the stylist that is nit picking me, she wants me to be a mini me of her. But I have seen clients of hers leave with their hair not as expected. I don’t want to follow her techniques, because her “ideas” of these color techniques are 100% wrong. The other stylists compliment my work all the time, she’s the only one with the issue. I just don’t understand why. Color is definitely my passion, I don’t want to start changing things I already feel I comprehend, although I would still like to learn more. I’m planning on talking to her tomorrow, but am keeping backup salons in mind. I definitely don’t want to burn bridges, but have to watch out for me also. It just sucks giving 100%, and getting negativity in return when everyone else is happy. They aren’t very nice people anyways though.. So you are right. It wouldn’t be a huge loss. I’ve just never been a quitter, and would hate to start now. Then again, I’ve been told I don’t exactly “fit in” anyways. Square peg, round hole. You are amazing for giving advice, you help people like me tremendously. I just needed another opinion so that nagging voice in my head could tell me it’s not just me
Ok thanks for the advice
Hi, need some advice if possible. I am considered a “junior stylist” at the salon I work in. Tuesdays-Thursdays I get paid hourly on top of a reduced commission. Friday and Saturday I work 100% on commission. My question is, the salon owner constantly tells me that because I am a junior stylist I have to stay until the salon closes on Fridays and Saturdays “in case of walk-ins or something.” However, I am not usually busy and am often left sitting there twiddling my thumbs (sometimes I help out at the front desk FOR FREE). Can she legally make me stay on Fridays and Saturdays if I don’t have any clients scheduled and she isn’t paying m?
Well, that depends. If at the end of your pay period, you are making equal to or above minimum wage for the hours you’ve worked, you can be required to remain at work. However, if your commission does NOT equal or exceed minimum wage when calculated against the hours you’ve put in, it is a violation of the FLSA and illegal. So, whether or not it’s legal can actually vary from pay period to pay period.
SO if the salon owner doesn’t have to give you a key and can’t dictate your schedule as a Renter, how does the hours of operation work?
It’s equated to the lease arrangements at shopping malls. The stores within the mall can operate any time during the mall’s operating hours, but not outside of them since the mall is shut down and locked up at closing time. So, the salon’s hours of operation should be listed in the lease. You can work at your discretion within them.
i was working at a salon called stylin katts salon in glendale for like 7 months and was getting pay 6.50 an hour . i wasnt making any more so i decided that i was going to move back to connecticut .so i gave my boss kathe anderson my 2 weeks notice after i gave my 2 weeks notice she stop talking to me at work and was giving me the cold shoulders and after a week went by i couldnt work in that environment where i felt uncomfortable being there so i told her march 26 was my last day and to mail my check .and she was like okay. well i got a letter stating that she wasnt going to pay me for the hours i have worked because i broked my contract but i never received a copy of this contract nor did i know i have signed a contract cause when i got hire she didnt go over the paper and was like if you break the contract i dont have to pay i never heard anything like that. and i need this check to pay for my bills.
That is wage theft. Regardless of what her “contract” stipulates it is illegal to refuse to pay someone for work performed. She was required by California law to comply with the Wage Theft Protection Act. This means that she should have provided you with a form detailing your rate of pay and the frequency with which you receive your paychecks. It is not legal to withhold pay in California for any reason (other than court mandated child support deductions). You need to contact the California Department of Industrial Relations and make a wage claim.
Here is the link: http://www.dir.ca.gov/dlse/HowToFileWageClaim.htm
I was wondering if the rental of a chair is a salon should be taxed. My mother currently rents and recently mentioned the fee plus tax that she pays. I thought that taxes couldn’t be charged because she isn’t buying a good.
I have never heard of taxes being charged on rental fees of any kind, but every state has different laws and some of them are a bit wonky. I would check with your state’s landlord/tenant laws and see if there is some kind of tax charged on sublet spaces. It doesn’t sound likely, but it’s entirely possible.
I am an independent contractor. The barbershop owner has us pay a $26/day chair fee and takes 50% of what we make. We must sell the products the store provides. From what I’ve been reading above this sounds like this might be more than just questionable. Is there a violation happening?
At the very least, it’s a questionable arrangement at best. Paying a daily rental plus profit-sharing is very inappropriate and certainly doesn’t work out for you at all, particularly if you’re being expected to buy your own products. You’re responsible for paying your own employment tax, so you’re really only making 35% of your service sales…minus your $26 a day for chair rental. Paying a share of profits in lieu of rent is only permissible under very specific, carefully outlined contract terms. At best, it is very shady. I wouldn’t be able to tell you if it was outright illegal unless I had more information. For example, are you expected to work a schedule? Do your clients pay at a front reception area? Does the shop book your appointments or do you manage your own book? The fact that you’re required to sell the products the store provides is certainly not legal, as it goes directly against what an “independent contractor” is…independent. You can’t be required to meet quotas or sales objectives and you certainly can’t be limited in or restricted in any way.
Thank you Tina, I was not expecting such a prompt reply, it is most appreciated!! (I am the immediate above question, “$26/day”)
To answer your questions:
1. I do not buy my own products but am not allowed to sell other than what we offer.
2. I am expected to work an assigned set schedule.
3. My clients pay at front reception who handles all $$ and booking. They handle phone calls, online booking, etc. (they are very appreciated: ))
4. We do not have sales quotas
As a learning tool this location has been invaluable. Our reputation is very high in the Portland area and to use this as a stepping stone, the shady pay becomes all-the-more worth while. I am mostly concerned about the legality of this operation for what aspects I will carry over to my own upcoming endeavor and for the rights of my fellow barbers.
Thanks again!
-Cheers!
Alright, there are alllll kinds of things wrong with that arrangement. The owner can’t decide if you’re renters, employees, or independent contractors. It’s a mess and it’s an invitation for audit. Definitely NOT legal. Booth renters are given a space in exchange for a fixed amount. No backbar, no reception services, no walk-ins if the owner doesn’t want to give them out. They run their own business entirely. That means they set their own schedules and their own prices. They do their own thing. Independent contractors don’t belong in our industry at all unless we’re talking about the plumber that removes the hair clogs from our drains. Employees follow orders, work schedules, and have taxes taken out of their checks. They don’t pay for backbar or supplies or rent.
What you have going on there is a complete mess, lol.
Ha! I figured as much – I just didn’t realize it was such a complete mess, Tina. It’s no wonder their business has grown so immense so quick with how much they’re taking from us.
In your opinion would a system such as this leave the owners prone to lawsuit?
(I’m not one to sue but I’d be happy to quietly report them before I quit)
Ans as an individual who is in the process of opening his own barbershop in the coming months, is there a particular pay structure that stands out among the rest as a completely fair system? I see many places offering minimum wage (or thereabouts) or 50% which ever is greater and 15% commission. If that’s the standard then I feel it might be on the low side of what is tolerable for employees. I wish to raise the standard within my future shop if possible.
This conversation has been much appreciated!
Regards,
X
Oh my goodness, definitely read these three posts when you’re thinking about compensation.
https://thisuglybeautybusiness.com/2013/01/staff-compensation-comparison-of.html
https://thisuglybeautybusiness.com/2014/02/why-commission-only-doesnt-work-for.html
https://thisuglybeautybusiness.com/2014/04/the-great-commission-failure-tale-of.html
Ok here goes my story its a sad one and I really need some advice. In October of 2012 I was working at a vietamse nail salon when my old nail technology teacher called because a local beauty salon needed help. I went to the salon an the lady informed me that she needed a nail tech to do do gel polish because her existing booth rental tech only does acrylics. I decided not to take the job because hef salon needed remodeling and I had hopes of my own salon in the future because there wasnt a American owned nail salon in the area. To my surprise she called me back later that week an offered to open up a salon and I could be the manager, she got a loan and a building and asked me to come up with every operating procedure, hours of work and employee protocols because she has no knowledge of running a nail salon. So I did all of those things and my compensation was to be % 50 commission on services and pay as a manager (to be determined) and a portion of a profit when one was reached. Sooo fast forward we open up Marchn19th 2013 and I cant believe all my dreames have come true I have been given a salon and I hire two employees and the are getting paid % 50 commission and she buys the product. I never get any manager pay each week im waiting for something but it never comes. I run the salon from the moment the doors open in the morning until they close adhere to all state board guidelines and all of the hours and procedures that she had me come up with and any other common sense laws regarding my employees. She handled all the payroll and had control of advertising and reordering products when we needed more. My money for being a manager never came and I have lived on $200 or less dollars a week for a year because I had all these clients that depended on me and two 20yr old employees that looked up to me and I couldn’t let them down and I didn’t know how to ask for my money because I was afraid she would fire me….then what? Where would I go ? What about my clients? I feel soo stupid but I tried to make it work. I quit today because I cant take it anymore I make more child support thatn the measly $800 dollars a month from my paycheck. I asked her for compensation today for my management position and she informed me that the % 50 commission that I got and only got when performing a service was for being a manager and for service work! But how can that be when my employees got the same commission and only had to do services and not manage anything or anyone. Help I livein the state of Alabama, what are my rights. My email is shawdedra@gmail.com.
Unfortunately, unless you had some kind of written agreement to prove that there was a promise of more income, there probably isn’t much you can do. That being said, I think it is very likely that she wasn’t in compliance with the FLSA (which dictates that your commissions need to equal or exceed the minimum wage for each hour you work). I doubt very much she was auditing your hours against your commission. You should either find an attorney that specializes in labor/employment law or file a report with your labor department or attorney general’s office.
I am an attorney. My client was renting a booth from a friend for $75 a week. They got in an argument and the friend “fired” my client, changed the locks, and would not allow my client to return to get her possessions. She even tried to bring the police with her to get her stuff, but the friend would not allow anyone in. So, one night she entered in there herself and got her own belongings. She’s now charged with burglary. I’m trying to prove that, as a booth renter, she was not allowed to be fired or removed without proper notice, and that her belongings were essentially stolen through conversion when the owner would not allow her to enter. I’ve seen where you listed what is legal and illegal, but there is no actual law attached. Could you point me in the direction where you got your info to determine whether this is legal or not?
Prepare for this to be a long post. Seriously, get yourself a cup of coffee or something and settle in, lol.
Commercial law varies by state (but generally not by much). The majority of states have adopted and altered the federal residential landlord-tenant laws (the URLTA and/or the Model Residential Landlord-Tenant Code) to be applicable to commercial leases. That’s what these guidelines are based on.
However, assuming you’re the Karyn Boothe I found thorough my complicated investigation procedures (…I Googled you, lol), you’re in Georgia. And that complicates things a little.
GA is one of the few states that not only permits commercial lockouts, but allows the landlord to sell the tenant’s commercial property to make up for arrears in rent if the lease allows for that remedy. In most states (even in the event of a delinquency), landlords are required to serve a notice with the full amount due, file a proof of service, then file for the actual eviction, give them time to contest the eviction, have the case heard, and *then* commit the lockout. Even then, they generally aren’t permitted to claim property; a judgement has to be placed against the tenant for the amount due.
Here’s the thing, though. The GA statutes *only* allow for a lockout in a situation where the tenant has committed a breach and it sounds as if they can only do so if specifically outlined in the lease. (“The lease must state that, in the event of a breach, the landlord may reenter and take possession of the premises without recourse to the Georgia summary eviction statute [Ga. Code Ann. § 44-7-50 et seq.].” http://www.justanswer.com/landlord-tenant/7w0si-commercial-property-ga-lease-tenant.html)
Since they were “friends” I’m doubting that they had a written lease in place. If they did, I doubt very much that it was professionally written and that it contains a lockout clause. Based on my knowledge of this business and the extreme abuses committed against booth renters and “independent contractors” in salons by salon owners, I also doubt highly that the renter was being given all the freedoms owed to a self-employed individual under federal tax/labor laws. (I’d bet my left arm that the argument stemmed from a situation where the salon owner was overstepping her bounds as a landlord and attempting to act more as a manager, a role she has no right to play. The vast majority of renter/landlord disputes in a salon generally stem from these power struggles.)
Landlords aren’t permitted to lockout tenants at will for whatever transgression they come up with. GA state law doesn’t give many protections to commercial tenants, but it wouldn’t make sense to give landlords the ability to wantonly boot business owners and sell off their inventory without notice and proof of contract breach. It really doesn’t sound as if the owner had the legal right to lock out the tenant in the first place, let alone claim ownership of her belongings in this situation.
I’ve also read an article that states that in order for any commercial agreement (including leases) to be enforceable in GA, they must be in writing. Verbal leases are not enforceable. (http://www.atlantabusinesslawobserver.com/contracts/enforceability-of-oral-business-contracts-in-georgia/) The owner may have a really difficult time explaining why she felt she had the right to lock out the tenant in the absence of a written lease since the statute doesn’t permit lockouts without a stipulation in a signed lease agreement. In the absence of that term in the contract, the landlord should be utilizing the statutory dispossessionary procedure.
This is going to have to be continued in a second post since my own blog service won’t allow my comments to exceed the character limit.
Proving that your client was a booth renter should be simple. However, the vast majority of salon owners do not have a single clue how to properly treat a booth renter. Misclassification is rampant in this industry. There’s a very good possibility that your client could make a case against the owner for overstepping the boundaries clearly defined by the IRS. Owners of booth rental salons tend not to understand that they are *not* salon owners. They are landlords. They have no right to manage or direct any of the renters that operate in their building.
Another issue I see here is that no “burglary” was actually committed if the tenant didn’t steal anything that belonged to the owner. GA law (16-7-1) states that, “A person commits the offense of burglary when, without authority and with the intent to commit a felony or theft therein, he enters or remains within the dwelling house of another or any building, vehicle, railroad car, watercraft, or other such structure designed for use as the dwelling of another or enters or remains within any other building, railroad car, aircraft, or any room or any part thereof.”
Whether or not she had authority is debatable since the lockout may or may not have been legal to begin with. I’m fairly certain the salon cannot be considered a “dwelling house” (unless it’s a home salon). And she didn’t enter with “intent to commit a felony or theft.” She entered with the intent of retrieving her belongings–the expensive tools and materials necessary for her to make a living. If she was paid up on her rent, the owner had no right to claim her property for reimbursement, so that property still legally belonged to the tenant.
The landlord *might* be able to claim that the tenant committed a B&E or illegal trespass, but if none of her personal property was stolen and she didn’t have the right to retain the tenant’s property, no burglary actually happened, so she’s filing charges on false pretense. Even the B&E/illegal trespass would be hard to sell since she very well may not have had the right to commit the lockout initially, lol.
I’m not an attorney, but the way I see it is this: the burden of proof is on the landlord to prove that
a.) the tenant was in breach,
b.) the lease stipulated that the landlord retained the right to utilize self-help to take possession of the property itself and the personal items contained therein, and
c.) that an actual burglary was committed.
I think the landlord is on shaky ground at best in this situation, but I haven’t seen the lease and my knowledge of GA commercial landlord-tenant law is fairly weak. I’m actually pretty shocked at how lacking it is in tenant protections. (You people actually have a law that allows blatantly unfair contracts and upholds them even when the stipulations are clearly unwise and not in the best interest of one of the parties…and a complete absence of laws that disallow common contractual abuses. That is the most insane thing I’ve ever seen in all of the research I’ve done and makes GA a very scary state to be a salon professional in.)
The most I can find on this are case-law situations where random precedents were set. (Rucker v Wynn being the only commercial case and Colonial Self Storage v Concord being slightly relevant.)
I have a few attorneys in other states that I consult with regarding their commercial landord-tenant laws, but I don’t have a relationship with anyone in Georgia that I can call at this point. I would strongly recommend not only consulting with one, but also really discussing with your client what the relationship was between her and the landlord. A lot of renters (even veteran professionals) do not realize that they’ve been exploited the majority of their career. It’s very possible that she has not been treated properly and may have a case against the owner for labor abuses and tax evasion. At the very least, it might be something she can use to convince the landlord to drop the charges.
Thank you, this is extremely helpful. (And, yes, I’m that Karyn Boothe lol) We have a hearing Tuesday, so I’ll let you know how it goes!
Hi, Tina. I’m hoping you have some advice left in you for this.
I am a former nail tech from the early 90’s. Unfortunately, within 2 years of getting licensed, I became allergic to the product and had to give it up. Fast forward 20+ years…my daughter obtains her cosmetologist license. She immediately starts in a salon as a booth renter. Within a month, one of the other stylists approaches her with a business proposition and tells her about the bad practices of the salon owner. So, my daughter decides to follow this gal and help her start her own salon; my daughter is a booth renter again. Keep in mind that both of these girls graduated H.S. together and live in a town of less than 15,000 people.
So, my daughter spends many hours helping this gal open her salon; as did myself, my son-in-law and his grandfather. During the first month of opening, my daughter had medical issues; such that I took her away for a couple of weeks. When my daughter returned, she was given a “Three Days to Pay or Quit Notice” by the owner for failure to pay booth rent. During this time, my daughter kept the owner informed of the money issues she was having and the owner agreed – and tho I have harped on my daughter about getting everything in writing and keeping detailed notes, she didn’t – to other payment arrangements, verbally. The verbiage of the notice stated that my daughter needed to pay $480 within 3 days or her lease would be terminated. There was nothing in the lease agreement or notice that she would be responsible for the remainder of the lease. Now, my daughter was served with papers for small claims court, by the owner for $2,500 for “breach of contract” and a few other things. Court was today and we are awaiting judgement: can the owner terminate the lease agreement like that? Does it become a quit or termination when the verbiage is contradictory? We live in Idaho and my recent work history is in Human Resources, so I have some knowledge on this, but am stuck on where to find the rest. Any help is greatly appreciated! Thank you!
Unfortunately, I don’t know enough about this to really help you. The laws regarding three day pay or quit notices vary by state. I don’t know what state you’re in. Whether or not the verbal agreement is sufficient to hold up in your state. You needed to speak with an attorney that specializes in commercial landlord-tenant law and you needed to do it the day you were served. You’re awaiting judgement. It’s late in the process to start looking for help now, but if you can find an attorney willing to do a free consult, I strongly suggest you do so immediately.
Hello Tina, I was wondering if you could help me. I stay in the UK so i’m not sure if hairdressing legal rights are different over here but thought I would give it a shot by mailing you.
Anyways recently i have left the salon that i worked in for 3 years. i am fully qualified now. Since i started in there 3 years ago i was on a 3 month trial to begin with and then my job was permanent and my training began. I was spoke to about getting a contract writting up and told we would sign it etc but one never came to light. I never asked i just assumed it would happen eventually. We then relocated last year and after a few months of being 4 days a week i got dropped down to 3 days a week and i was told when i qualified that they would not have a position in there salon for me as a stylist but didn’t want to let me go just yet. So i started looking for a new job and it turns out the job i applied for phoned me up for an interview and i got offered it the same day, and wanted me to start the next day. So as far as i had heard i didnt need to give any notice because there had never been a contract or any agreement of any sort. So that was fine but now they are trying to tell me i owe them £200 holiday pay because I have left in june and up until now i was only entitled to 7 days but have took 6 more days and have left half way through the year. ( My wage a week is £110 ). I don’t want to hand over the money because i am not totally sure i even owe them it because i have no contract with them. Can you please help me ?
Do NOT hand over any money! In the UK, if a worker has taken more leave than they’re entitled to, their employer *must not* take money from their final pay unless it’s been agreed beforehand in writing. The rules in this situation should be outlined in the employment contract, company handbook or intranet site. Since you are not on a contract, you are under no obligation to pay them that money.
Actually, in the UK, I’m pretty sure every worker is entitled to 5.6 weeks of Vacation Pay. Check it out here: https://www.gov.uk/holiday-entitlement-rights/entitlement
How do you legally let your clients know you are moving salons and would like them to follow? They were clients that were walk-ins at my current salon and are very loyal and would like to let them know where I will be going. I don’t want to be used for theft since they were not technically “my” clients I brought with me. Thanks!
I don’t know if you signed a non-solicitation clause, but if you didn’t, you can’t be sued for soliciting the clients since you never agreed not to do so at the time you were hired.
The best way to keep solicitation from being an issue at all is to have an online portfolio. I wrote a post on them here: https://thisuglybeautybusiness.com/2013/11/online-portfolios-make-one-now.html
If you have an online portfolio that’s easy to find, you won’t have to solicit anyone. They’ll find you. You won’t be violating a contract even if one were in place.
Here’s another post I wrote about informing clients that you’re moving: https://thisuglybeautybusiness.com/2012/09/how-to-inform-your-clients-that-youre.html
Are these laws universal for ALL states? I’m in Texas and I recently started at a salon and the owner is trying to tell me that I need to be there ALL day EVERY day. I feel as though she is wanting a “babysitter” for her salon so she can go and do as she pleases during the day. Which that is fine and dandy to me BUT she wants me to be there to answer the phone and WAIT for walk-ins. I have been there every day for two weeks and there has not a single walk-in nor a call for a random haircut/service. Now today, she trying to put chores for me to do and clean up after her or the other new girl. AND If I sell a product (she furnished) any profit off of it has to go into a “petty cash” for any up coming hair shows??? She is trying to tell me what product line I have to use on my clients.
Yes. These laws are federal laws and therefore apply to all 50 states. If you’re classified as an independent contractor, you’re being exploited by an owner who is attempting to avoid her employment tax responsibility to you and the minimum wage/overtime pay requirements set forth by the FLSA.
Hi, I work in a salon on commission, 70/30, I supply my own products and chemicals. I collect from my clients and pay the owner her 30% at the end of the week. I set my own schedule, book my own clients using my cell phone and process my own credit cards…etc. My question is, should I send her a 1099 at the end of the year? She says no.
Yes. You absolutely should be. Technically, your arrangement is a booth rental. That 30% is your rent. You are paying her more than $600 a year, I assume, so you would certainly need to provide her with a 1099 so she can claim that rental income. You can also claim that money as a business expense on your own taxes.
Technically, my “classification” is a booth renter. She gave me a very poorly written contract that she wants me to sign. In this contract it states that I MUST be there 24 hours a week. Is that legal?
That’s a weird gray area. You’ll have to talk to an attorney that specializes in commercial landlord/tenant law in your state about that. My opinion (which doesn’t in any way reflect the law) is that she shouldn’t be concerned about whether or not you’re present as long as your rent is paid up. Requiring you to be present for some arbitrary amount of time is indicative that she wants to control the way you’re doing business. The IRS would not look kindly on this “requirement” of hers. Your only requirement should be that your rent is paid up on time. I would tell her this and would refuse to sign it.
Hello Tina – are booth renters in the Los Angeles area required to have their own business license?
There are no state statutes or board regulations that require a booth renter in California to have a business license–however, it might be a good idea for you to get one anyways, even if you’re going to act as a sole-proprietor. It’ll help distinguish you from the salon, give you the ability to operate under a business name, open a business banking account, and build a web presence online separate from your personal one.
Hi Tina I have been working as a booth rental in a salon in beverly hills for last 8 years. One of my coworker opened a salon and ask me to go and work at his salon i ask for a contract and he said we know each other forever and it isn’t important…and girl it has been the worse experience ever…he has forgot all his promises and coming up w new rules everyday..the first day he said i can have a key and i can come in and leave as i want which when it came down to it he gave me a wrong key and didn’t answer his phone till my bridal party left in tears and he acted it like nothing went wrong- he promised that his salon is a bumble & bumble which i have never received a product ever and for the back bar he refiles the old bottles w the cheapest shampoo and conditioner and of course the result of my job doesn’t come as good-he changes his opening hours as he is pleased and he tells me that his tired and doesn’t feel like staying open and i have to bring them to my house to finish the job-he locks the ac when he isn’t there and its 85′ inside and…. i got in an argument w him on sat nite cuz the first day he said he will have to assistant on the floor and cleaning lady which he has faired her cuz of his cheapness and when i simply asked her that whats the deal and y we don’t have help his answer was go get your own and by end of the day he told me from now on he wants $450 weekly instead of $250 and if i don’t pay on tues for starring week he will kick me out… and i received a call from his investor that they don’t like me there anymore and i must come and empty my cabinet and never go back…even tho i don’t wanna be there or see them I’m booked the whole week and i need a week or so to find a write place for myself…can he refuse letting me go to his salon and do clients??? is he alowed to kick me out this way even tho his hurting my business and hasn’t give me a written notice? plz help me I’m so worried about tomorrow
There’s a possibility that you could try to sue him for damages in civil court, but whether or not it would be worth the aggravation or expense is debatable. Because you’re in CA, he was supposed to follow their commercial tenant eviction procedures, which you can find here: http://www.legalmatch.com/law-library/article/evicting-a-commercial-tenant-in-california.html
I’m sure you’re already looking, but my advice is to find a place ASAP for the short-term while you search for somewhere that suits you and your clientele for the long-term.
Hi Tina! I’ve been licensed for 4 years, practiced in a salon for 1, took a 3 year break after my daughter was born prematurely (26 weeks), and have just recently started at a salon 3 years later. I will be signing an independent contractor agreement Tuesday, and just want to make sure I’m not making any mistakes. The owners salon is all booth renters, but because of my situation, working from the ground up, she is allowing me to work as an IC on commission. There were 2 options, 60/40 and supply my own color line and tools, or 40/60, use her color line and tools. Either way, she provides back bar, and other salon floor things such as dryers, wax, etc. I also will receive 10% on any products I sell to my clientele. I currently have NO clientele, and am working on getting my name out there. The contract is a 3 month contract. Upon the end of the contract I have the choice of parting ways, continuing my current IC contract, or switching to booth rent. Does this sound fair? All my clients will be checked out through the salon and I will be paid every following Tuesday after services rendered. Thanks!
Personally, I would not move forward with this if I were you.
1.) You have no clientele. That fact alone makes you a better candidate for employment vs independence.
2.) I have seen these arrangements work out, but the profit share arrangement in lieu of rent is a BAD idea. I review audits of salons often and in all but one where the employer took a percentage as rent, the IRS ruled against the owner, determined the “IC” was actually an employee, and punished them accordingly.
3.) No matter which way you cut that commission, you’re still making less than you would be as an employee. At 60%, after taxes you’re making 45%. If you have state taxes, you’re making less. Deduct product costs and it’s practically nothing. At 40%, you might as well be paying her to work there.
5.) If you’re a renter, she doesn’t touch or handle your money in any way.
6.) This situation leaves far too much open to conflict and will not benefit you at all.
So yeah, I strongly advise looking elsewhere for work–as a W-2 employee. :/ I have seen professionals enter these agreements time and time again against my advice and have seen every one of them fail miserably. This arrangement is not a proper one and is shaky at best.
Very interesting and informative stuff here…thanks! I’m thinking of taking over a booth rent salon, and this blog and its comments brought up a few questions. The salon currently has a renter who dresses like she works in a bordello, and another one that uses profanity endlessly. If I can’t require the booth renters to adhere to a dress code/code of conduct, how do I protect my salon from these kinds of unprofessional people? I want my salon to be family friendly…surely there’s something I can do!! Also, how can I keep the booth renters from bringing their kids to work with them? One has a baby that she brings with her every day. He cries incessantly, and she changes his rank diapers in the common area of the salon!! The other has a young child that is dropped off at the salon after school. She’s not a big problem, but she does interrupt the other stylists’ conversations with their customers, and generally gets in the way. Lastly, the current owner has a salon-owned credit card machine that all the renters use, then she cuts them each a check at the end of the week for their charges less 3%. Is this a legit business practice? Thanks for your input.
It might be legit, but it certainly is NOT advisable and I wouldn’t continue that practice if I were you.
As a booth rental owner, you have no control. I have several posts here. I highly advise reading the posts about why booth rental is a bad plan. There’s no way to really manage them and I strongly advise owners against the model. If you expect to have any control over all that drama, you need to make every one of those trainwrecks employees, lol. The booth rental model tends to attract professionals at opposite ends of the spectrum–you have the uber professional that are good enough to make it on their own without a boss, and the absolutely unemployable that have no other choice but to rent because no owner will put up with their shit.
Wow, isn’t that something!! Okay, so if I have a proper lease, with a termination clause that lets me terminate the lease with 30 days’ notice (or whatever my state’s landlord/tenant laws require), then if a renter was “undesirable,” I could give them 30 days’ notice to vacate, at which point could I tell them WHY (your appearance, your behavior, your kids) and give them a chance to make some changes in order to be able to stay? Also, I’ve been reading the landlord/tenant laws and they are all written toward monthly tenants. It’s hard to give a tenant 5 days to pay their rent when it’s due every 7 days! Any thoughts here? (I know you don’t like booth rental, but it’s how I’m gonna go, if I go at all.)
Well, first, I’d switch to monthly rent and require security deposits up-front from all renters. That way, if someone is late or has a rough month, you can say, “It’s cool, you have a month of security. Just be aware that your payment needs to be made ASAP and you need to catch up or else you’ll have to go.” Monthly rent also eliminates those renters who live hand-to-mouth and are more likely to default on payments.
As for the termination/warning, that’s exactly how I would handle it too—termination clause extended both ways, either party can end the relationship for any reason with 30 day written notice. If they want to discuss staying, they can schedule a meeting and the two of you could work it out. I don’t think that’s unreasonable at all. Even residential tenants get booted for being loud, failing to upkeep the rental property, etc. So, it certainly isn’t unheard of to evict a tenant for their behavior or lack of professionalism. You just have to make sure that clause is in there and that you aren’t overstepping that landlord/tenant boundary.
First off I’d like to say that I have been searching for all of this information for YEARS! So, thank you so much for doing the work for all of us, but more so making sense of the IRS and FLSA language. I was working at a “corporate” salon for 6 years where I thought I was being totally screwed and yes, to an extant I was. However, I left mostly because I was tired of being treated poorly and moved to a salon where just like everyone else agreed to start working as a 1099, at 50% with a set schedule (with flexibility), on a bi-weekly payroll where I do my own taxes, but have to pay for back bar, credit card transactions, health insurance, product and color, where she’d like for us to sell retail but won’t give commission on it. There was also a false promise of the volume of clients walking through the door, so not only am I making little to no money in SF (the most expensive city), but I am also sitting around wasting my life away with sometimes as few as 8 clients in a 4 day work week. It is evident that I am an IC being scammed. But my question is why would she have all of us get a business license and a business account? Is it so that we can have more flexibility with write-offs? The way it was sort of explained to me by my boss, which I haven’t seen you mention anywhere is that yes, I have to supply my own products etc, but I can write them and just about everything including health insurance, cell phone (bc it’s used for work) and even clothes off. Does this sound crazy? I am definitely leaving and I am not afraid to reporter to the IRS before I do, but I want to have a true understanding of everything and all of my rights and hers first. I am also in fear that by doing that I will be audited, is that a possibility? Thank you again!
This is a fantastic question and I’m glad you asked because I recently addressed this on the blog’s Facebook page. The reason these owners require their so-called “IC’s” to get a business license is so they can attempt to prove that you were operating as your own business. However, what they aren’t realizing is that the business license alone isn’t sufficient to prove independence. The IRS considers 20 factors, so the fact that all the staff have business licenses means nothing in the end. In addition, the percentage split is ruled against in the vast majoroty of audits.
As far as you being targeted for audit–don’t worry about it. You are incredibly unlikely to be. I have never heard of an employee getting audited as a result of filing an SS-8 against an owner.
Thank you! That makes so much sense now! One more question. Do you happen to know about when a 1099 is supposed to be filled out and by whom? I don’t remember filling one out so I am assuming it is supposed to be something I receive from my boss at the end of the year…is this accurate?
The owner would be the one required to provide you with a 1099 for all money they’ve paid you so that both of you can claim that income/expense on your taxes. They must have it to you by February 2, 2015, or she’s liable to be fined. Hope that helps! 🙂
That does help greatly! Do you have any articles on write-offs? I tried searching it but I’m having a hard time finding anything. I am wondering as a hairstylist whether IC, employee or booth renter what we are actually allowed to write off in our taxes. Thank you for everything!
Oh! I know this one! (It was one of the last chapters I wrote before I finished the book a few weeks ago, lol.) Generally, anything that you have to spend money on in order to make money is able to be deducted, whether or not you’re self-employed, however, different rules apply to employees. Those two links I provided should answer all your questions about deductions. 🙂
Started doing my own research. Thought you might like this…http://www.edd.ca.gov/pdf_pub_ctr/de231c.pdf
I LOVE THIS! California truly is a spectacular state to be in specifically because of this reason. They provide tons of resources and those resources they provide are written in plain English. I’m going to write an entire post based on this. States give different weight to different factors, but the IRS needs to make a similar chart for federal factors. This is seriously one of the most impressive things I’ve ever seen!
Good!!! I’m so happy to hear that! Thought it might be helpful.
Hi There! I was wondering how the front desk staff is classified. Can they be Independent Contractors or are they required to be W-2 employees? This would be considering they are hired only for front desk and assistant duties (laundry, cleaning, etc.) and they have a set amount of hours they are required to be there (such as opening to closing). Thanks!
They definitely, for sure, without a doubt NEED to be W-2 employees. No question about it. Nothing about that situation is indicative of independence. There’s a post here that goes more into detail about how IC’s are to be treated.
In the state of WI can my employer take 5% off my paycheck for a service fee for product?
Here are the laws in Wisconsin: http://www.employmentlawhandbook.com/wage-payment-laws/state-wage-payment-laws/wisconsin/#6
While there isn’t a state law prohibiting it, the FLSA doesn’t permit deductions that drop an employee below minimum wage, so that makes these deductions legally questionable, depending on the circumstances. In any case, it’s a bad practice and indicative of inexperienced management.
Hi, I am a booth renter at a salon. When I started working at the salon, the owner did not provide anti fatigue mats at each station. The salon has concrete floors. After a few months, I noticed that one of the other stylists had bought a mat, so I purchased one for myself because I was having hip, knee and back pain from standing on concrete all day. I didn’t know at the time that the salon owner doesn’t like mats because she thinks they are ugly. Once the other stylists told me that she didn’t like them, I informed the owner that I had purchased one for my station, and that I hoped it wouldn’t be a problem. She never replied to me.
It’s now been almost a year since I bought my mat, and the trend carried through the salon and several other stylists have also purchased mats. Yesterday, the salon owner informed us that she hates the mats, she thinks they are ugly, and that if the mats ever have any footprints on them, she will give us warning first, and then the next time, we will receive a $20 fine.
Is it legal for her to fine us? I have no problem keeping my mat clean, but can a salon owner impose a fine on her renters or commission stylists?
Lol, this is insanity. She can try to impose a fine, but since this mat issue is unlikely to be clarified in your lease, she’ll have a hard time collecting that money. The proper way to handle this is to prohibit them in the lease, but seriously, you guys need those mats. I certainly wouldn’t rent somewhere that didn’t take my comfort and long-term safety seriously.
Just curious. I work as a commision stylist in NC. My boss keeps changing our rules and contracts. And almost every meeting we are forced to sign these “new contracts”. One of the changes is, after working there 2 years you’re no longer allowed to take walk ins because they’ve hired too many people. A lot of us have regulars but we still depend on walk ins. We are in a military town where it is very hard to retain a clientele because ppl are always moving. If I didn’t need walk ins I’d be both rent. But she just up”d booth rent from 125 to 175 a week. And that is a lot for our area! Also she doesn’t pay us for meetings and they are never during work hours. Is that allowed? She also is forcing us to work for free outside salon hours on our days off for events she organizes..I love doing hair but I’m starting to feel taken advantage of. We’re constantly told were a dime a dozen. And God forbid we ask a queston they are very defensive and say things like ” if you don’t lIke it there’s the door”
Oh my. Okay, let me handle this in a list.
1.) You must be getting paid for all work you perform, at least minimum wage (state or federal, whichever is higher).
2.) If you are being “engaged to wait” or present at the request of your employer (for meetings, training, etc), they are required to pay.
3.) Why would any of you want to work for someone so clueless? She changes her employment terms frequently, is keeping walk-ins from you to justify overstaffing, and clearly doesn’t understand her legal responsibilities and limitations as an employer. In addition to that, she’s rude and defensive. People that operate ethically don’t have a reason to get nasty like that, which means she either has a superiority complex or she knows she’s doing something wrong. Either way, that translates to disrespect towards her staff. I’d tell her to stuff it and find an owner that knows what they’re doing.
As a commissioned stylist can I legally be required to come in on my day off to do classes, meetings, and make “vision boards” without pay?
No employee in any industry in any state in this country can be required to work (or wait) at an employer’s request without compensation.
I am a salon owner, my booth renter is moving and did not give any notice. She has paid her booth rent for Dec and now wants a pro rated part of the month back. Do I have to give it back to her? There is nothing in the month to month contract about leaving the salon or giving notice.
I don’t think so. You’re under no obligation to prorate her rent if the contract doesn’t specifically say so. Most states don’t have laws in place to protect commercial tenants (they leave that up to contract lawyers to fight though). Since yours doesn’t promise prorated rent in the event of an early termination, you’re not obligated to offer it.
Hello!
I’m a stylist in Michigan. And I would like to say this blog inspired me to get out of the old salon I worked at and move on to a salon that is doing everything right!
Anyways, someone just started working at the salon (as a booth renter) I used to work at.
The owner wants her clients to pay at the desk and give her a paycheck the following week and deduct the booth rent out of the check.
The owner said the more clients and more money she makes the booth rent will go up.
She asked for her SSN.
And she wants a “salon service fee” of $2 for each client. (Which she has to add on to her service fee)
She didn’t sign a contract.
It’s a lot more that’s going on in that salon which seems fishy. It doesn’t make sense to me.
Any advice.
Thank you!
I would warn the owner that she’s far overstepping her bounds and is very likely to face serious federal penalties for doing so. I’d also inform her that what she’s doing is crazy unethical, backwards, and will drive away any professional with common sense. Basically, she’ll make a name for herself in that area as an inexperienced, exploitative owner. Eventually, her hiring pool will dry up as that reputation perpetuates. Obviously, I’d advise that renter (and basically everyone else I knew) not to ever work for that woman (which is exactly what they’re doing in that circumstance, even though they’re paying her rent money for the privilege). She’s an audit and civil suit waiting to happen.
I am currently a booth renter. At the salon I rent at I have a spot where I perform nail and pedi services, in this particular area the roof is leaking, it is embarrassing and I’m afraid my supplies will be ruined. I gave relocated my things to a room that holds my body waxing and spray tanning supplies, I do pay extra for this private room. The owner does not want my nail stuff in this room because “she doesn’t like the empty nail space”… is this unfair and wrong to ask me to move back to a spot that leaks everytime it rains, when I’m utilizing another area that I pay for instead?
Many states actually have statutes that protect tenants from these kinds of lapses in landlord responsibility. That roof is a hazard and needs to be repaired immediately. I would refuse to work in that room until it is repaired and I would demand that she pro-rate my rent to reflect the amount of time that room is unusable. In civil court, you would very likely win a judgement against her for this.
I am on a 1099 at my shop. I work my own hours and come and go as I please. I get paid 50% of what I bring in. I am woundering how my taxes will work and if this is right. I have been booth rent before and had a 1099 but not worked for someone ang got one. I feel like if im just giving half of my money away help!!!
Not appropriate and very likely not legal. I’m willing to bet the IRS would rule against the owner in that situation. For more information on that, you should read this post: https://thisuglybeautybusiness.com/2014/05/the-20-factor-irs-test-why-independent.html
Love the site…
I have owned a salon for 20+ years with 6-8 workers. Always been commission at a rate of 58%. A few months ago I had a couple of people contact me that were interested in joining our salon, but wanted to booth rent. I researched it and decided to give it a try. Told my other employees up front, and thought the right thing would be to offer it to them also. The renters came on and are paying $175/week. Its been going great with no problems. Now I have a couple of employees that have decided they want to switch to booth rent also. Do I have to offer them the same rate? One of them I would be losing quite a bit off of their % compared to weekly rate. I know that I can deduct matched taxes, receptionist pay, products, etc. What is best way to go about this??
Can you clarify what you mean about the deductions? The way I read it, it sounds as if you still plan to provide products and a receptionist to these renters, which I strongly advise against. Renters need to be handling their own taxes, booking, and products entirely. They should also be processing their own payments (hooray for saving on merchant services!).
Something also tells me that you may not have run your numbers right, or that they’re leaning heavily in favor of others. This is by no means a negative statement, but I suspect you are one of those rare, overly generous salon owners. (A good deal of my consulting clients are also overly generous, which is why they have me balance their budget/overhead and restructure their compensation.) Anyways, I say this because a.) your commissions were absurdly high and b.) your rent is relatively low. I suspect that you’re not charging as much rent as you should be.
Incidentally, this explains why your business has been well-staffed for so long. Generous owners aren’t easy to find, lol.
As for the original question, it does suck to lose a productive employee to rental, but you’ll probably want to be honest with them and explain that rent prices will need to be adjusted to make up for the commission losses. In order for you to provide them with a place to conduct business (and give you financial incentive to continue operating that business), you’ll need to do better than breaking even. It’s not personal–it’s math. Present it respectfully. There’s more to that rental than paying the lease on the building. You have to cover insurance, utilities, and building/equipment repairs when necessary. If you choose to advertise for them, that’s another expense. Additionally, you want to contribute to the salon’s savings and make an income yourself. Those aren’t unreasonable expectations and if the renters are capable of putting themselves into your shoes, I’m sure they’ll understand where you’re coming from.
Thank you for your quick response to my last inquiry… I have another… as a booth renter should your business cards reflect your own business or the salon? currently i have my own credit card machine (the square) which reflects my business not the salons, as well as my own business account, because I also teach nail skill education. Is it wise to have my business card reflect my business name or the salons logo/business name, with it obviously stating where my business is located?
Always your own! I highly advise only promoting your own brand and *not* the space you’re located in. Most renters put their own business’ “feel” into their marketing materials but then state, “Located inside Salon X” right above the address.
Hi have a question. Here is the back ground info first.i owned a salon for 18 year and had a renter that rented a chair for 2 days a week. When I decided to close shop we ended up working together at another shop. Well it closed after a couple of years. So the stylist that rented from me open her a shop up. Before I went to work with her she quoted me a rent amount. The week I was moving in it goes up 20 dollars. When I finally agree to it and move in the first week ther I’m told there is a kitty that I have to give to for shop supplies. I give in and I was told my rent would not go up unless her rent went up. Now at the same time she takes another renter that pays 35.00 less than I was a week.because she was older. The owner tells me. Well this weekend after 2 years she raises the older renters rent 40 a week and try to raise mine not much but still raised after saying she wouldn’t. Her reason was to get very ones rent the same… Do you think I was treated fair. The older renter has left and I am considering it.
Well, she secured your lease under false pretenses to begin with when she quoted you one price and then boosted the price while you were moving in. That right there was really inappropriate and unfair. It would have been a deal-breaker for me. To then throw in additional fees for “shop supplies” is ridiculous. It’s not your job to supply the shop when you’re paying rent. If she wanted “shop supplies” covered, she should have increased the rent to accommodate those expenses.
It wasn’t fair for her to charge the new renter less rent, but it’s her shop and that’s up to her. I wouldn’t have stayed at that point, though. If her rent hasn’t changed, and she promised that she wouldn’t raise it unless her rent was raised, she’s gone back on her word yet again. It’s not fair and she’s demonstrated that her promises are worthless.
If you think you’d be better off moving, I wouldn’t disagree with you on that. I’d have been out much earlier had I been in your position. She’s made several promises that she has broken. She has lost credibility, and credibility is everything.
Hello – my daughter is currently working at a salon on 50% commission w-4 employee. She brought around 30 clients from her previous salon & has been there for about 3 months. The salon does no advertising what so ever – NONE. She does not get paid hourly either & works t-s 10-7 every week. Some weeks are better than others of course. Yesterday the owner had her sign a doc stating that if she doesn’t fill her books up more in the next 30 days they are firing her & will sue her if she moves to another salon nearby or takes her clients that she had prior to working there. They have hardly no walk-in business so no new clients here & she is not allowed to market via social media to get more clients for herself. How on earth can she be expected to increase her clientelle with no marketing? Supposed to only use word of mouth & referrals. Needless to say, she is very stressed out & doesn’t know what to do. Any suggestions are welcome!
Oh my lord. Well, the first thing she should have done was refuse to sign the document. Salon owners will often do just this–they will advertise a “job opportunity” that clearly states “must have clientele.” An established professional will take the “job” (which is not really a job at all since the salon owner doesn’t have the business to hire them to begin with, otherwise the “must have clientele” would be omitted in the ad). The salon owner will then require the professional to sign an agreement that keeps them from being able to solicit their own client base if they quit or are terminated. Then, the owner forces them out of the salon and steals their clientele for themselves. It’s a common scam and it happens a lot.
My advice is for her to IMMEDIATELY create a portfolio website with her contact information, put the URL on her business cards, and start handing those cards out to her clients. This needs to be done ASAP. Like, yesterday. It takes time for search engines to crawl and index sites. Until this happens, her site will not show up in searches. She signed away her right to contact the clients, but her clients didn’t sign anything restricting their ability to hunt her down. Make it easy for them. If she needs help, I could put one together for her on Wix and train her on how to manage it. (I charge $!00 and it takes an hour or so via Skype.) If she’s tech-savvy, she should be able to do it herself. I have an article here with more information.
Tell her I’m very sorry this happened to her. 🙁 I wrote a book that covers all kinds of content we don’t learn in school–specifically in regards to scams and illegal employment practices that are common in salons. It may help her in the future moving forward.
I have a couple questions. I am a massage therapist and own Spa in Illinois. A couple years ago we put in a cosmetology station and the stylist rent it part time (3 days). After a month she decided to add another day so we increased her rent. Recently she has decided to drop a day but extend her hours on the 2 days that she works. The hours that she works at the spa are pretty much the same. I am questioning if her rent should be decreased. I am also wondering what the norm is for booth rent. Do you rent part time or should she pay for the full time rent because she is renting the station? I would appreciate any advise!
Since that station is reserved for her, she needs to be paying a flat monthly fee, regardless of how often she’s in the space. Does the landlord of your building reduce your rent based on your operating hours? Probably not, because whether or not you’re there–that space is yours, all your stuff is in it, and it’s not like he can just take someone in off the street and let them use the space when you’re gone. For this renter, it’s the same situation. Unless you’re running a rental salon that allows people to rent at an hourly rate, she should probably be paying a flat fee. That being said, what works for you is what’s best. If that’s a daily rate, hourly rate, or compensation in the form of fried chicken toes–as long as it is agreeable, reasonable, and legal, any arrangement is completely fine.
Thank you! What is included in the booth rent? Color, retail etc?
Lol, absolutely not. Nothing but your space is included in a proper booth rental arrangement. For more information, you can read this post.
Thank you so much for the info! Thank God I found your page, this has been a real eye opener! I felt like I was being taken advantage of and now I know for sure I was!!
Hello. I work in a commission only based salon in GA. The split is 50/50. The owner provides equipment, sets our pricing, told us to start wearing uniforms, wants us to perform jobs to her specific standard, and ask us to work walk-ins on certain days at certain times. Other than that I am by appointment only. We take payments on one square and turn them in to her at the end of the week. I am required to pay my own taxes and she asked us to provide her with our own insurance. I am classified as an IC and just wondering is this correct? Should I have to provide my own insurance? I do not work at any other salon due to of course a non-compete agreement. I feel like i’m getting the shaft. I know you’ve answered this maybe a million times just wondering if my situation is any different.
Your situation is no different. What she’s doing is illegal.
I was a booth renter last year. I got a text from the lady I was renting from, she wanted my S.S. # and my address because she wanted to send me a 1099. I didn’t think I should be getting one. She claims that because she took credit card payments from my customers because mine was not working at the time and then wrote me a check I need to get a 1099. Some customers also paid with a gift card she wants to 1099 me for that as well. Even though see took a fee out before I was given a check. I just want to know what is right before I get the 1099 in the mail I never filled out any w9 and never gave her my ss# or address. . Thanks in advance for any help you can give me.
She’s legally compelled to provide a 1099 for any payments she has made to vendors or service providers in excess of $600 so you can claim that income (and she can deduct those expenses). Don’t worry, it’s legal and completely normal! 🙂
I work in a salon where I rent a chair. I make my own schedule, set my own prices, and pay my own taxes and insurance. The owner of the salon thinks that it is necessary for there to be a dress code, along with having to clean the whole salon and taking my turn buying “other” things for the salon. Such as toilet paper, cleaning supplies, lemons for water etc. Some of the other things I don’t use so I feel like I should have to pay for those things. But it just causes a big riff if I don’t. Just wondering if she can do this? Since it isn’t “my salon” I just operate inside the salon? She also feels the need to give me unwanted advice about how to run my business and sometimes feels like she is belittling me. Feeling stuck and not sure what to do?
Thanks!
None of that is appropriate. It puts her in a questionable gray area that would very likely land her into hot water. “Can” she do it? Sure. Would she get away with it if the IRS came knocking? Not likely. It might not be “your” building, but you’re leasing space and operating your business independently, so to a degree, it IS your salon. It makes more sense for her to include those expenses in the rent and be done with it. I’m not quite sure why anyone would prefer to nickle and dime renters. It seems like a pain in the ass and not worth the time.
As for the unsolicited advice, I’d thank her for the offer, but you’re not interested in being told what to do–that’s why you rent. She probably thinks she’s being helpful. Make it clear that you’re not looking for help.
Hi. I live in California and Im an employee ( W2) at a commission salon and currently they are telling us that we need to come in once a month for an hour before the salon opens for an unpaid meeting. Is this ok. Can they say it’s a mandatory meeting and make us come in at a time that is not in our schedule and not pay us since we don’t get paid hourly.
My other question is, are they allowed to require us to stay our schedule hours even if we are not fully booked. For example; if we are schelduled to work from 9 to 5 and we have clients only from 9 to 12 can they force us to stay even though we are not getting paid hourly( only commission) and tell us we are not allowed to leave until 5 because we are on a W2 and that is our schedule.
As long as you’re making at least the minimum wage for each hour worked within that pay period, it’s legal for them to have you come in before the salon opens–as long as you’re on the clock and that hour is counted towards your total hours worked. This is part of why I think commission is stupid. It’s circumstantially legal from pay period to pay period and most salon owners are not tracking hours at all, let alone meeting their minimum wage obligations.
If you’re a W2 employee and they’re complying with the minimum wage obligations every employer must abide by, then yes, they can require you to work their schedule, but again, it depends on whether or not you’re being paid in accordance with the law.
Ugh this is exactly what I’m dealing with! !!
Hi I work in a Salon in denver colorado as a booth renter but recently the person who I’m paying is stating I owe back rent. Recently he gave me 2 invoiced over email for back rent he stated i owed last year keep in mind I’ve never gotten receipts for booth rent and suddenly now I am. So i went into work todat and he took my babrer chair stating he won’t give it back till pay. Please help me
Do you have proof that you paid the rent? Is there anything in the lease that allows him to claim your property if you default? Is the chair even your property? Honestly, you’d probably be better off consulting with an attorney.
My daughter worked 4 month at a salon last year as a shampoo technician. She tells me the stylists are the ones who pay her for the work she does for them and then she makes tips from stylists and customers. But there are still days/hours she is required to be there by the owner. She did not receive a W2 or 1099 yet. Is this correct or is she considered self employed? From the article it sounds like she should be considered an employee and should have received a W2.
She is being misclassified. She is an employee for sure. I wrote another article that is helpful. You can find it by using the search box and typing in, “20 factor test.” It goes through all the factors the IRS uses to determine classification and why ICs don’t belong in salons.
I’ve been working at the salon I’m at now for about a year. Within that year the salon owner has went up on my rent 3 times.. She said depending on how much money I make a month will determine my rent.. is this legal..?
If you allow it, it might be. Most states don’t have protections for commercial tenants because they assume, as a business owner, that you’re savvy enough to balance your lease to protect yourself. (They’re wrong in making that assumption, in my opinion. Lease negotiating is tricky business.) If you don’t have a lease, I recommend having one written that sets a flat rate. The value of the space doesn’t change from week to week and neither should your rent. I’m willing to bet that if you were not making much money at all, she would certainly not lower the amount due, so it seems as if she’s using your success as an excuse to price gouge you.
I work at a salon which required me to start as an apprentice where I was paid minimum wage throughout a course of 9 months. I signed a contract that said once I started classes, If I quit within two years of being on the floor after the apprenticeship program I would be required to pay back 9,500 in education fees. Once I finished the program I was already locked into repaying this education. Then I had to sign another contract in order to be placed on the floor as a stylist. It was then that I had to agree to commission of 36%, pay for all of my product costs, and pay for any redos that were passed on to another stylist. I was forced into signing this contract because if I didn’t and decided to leave I would still have to repay $9,500 for my education. Now I am understanding that all of the things they are deducting are wage theft. Does this mean I can leave without having to pay back the education? Thank you
You’ll have to have the contracts reviewed by an attorney who specializes in employment law. To me, this sounds like indentured servitude, which is extremely illegal (13th Amendment violation–sort of a big deal as far as criminal activity goes). Please, please, PLEASE contact an attorney about this ASAP. Here’s an article I wrote about these so-called “training” contracts.
Hi, Tina. I’m an independent contractor – commission only, no taxes taken out, receive a 1099 at the end of the year. My employer recently started taking 3.12% of our credit card tips, and an additional 2.47% to cover a city tax on credit card tips (I cannot find any evidence of this “tax” on the city’s website, and have sent an inquiry about it.) Is any of this legal?
Assuming the “tax” actually exists, it is legal in most states for an owner to deduct credit card fees, however, I highly doubt you’re actually “independent” if the salon owner has you on their payroll.
Hi, Tina! I apologize for being anonymous but if you can see my e-mail a dress theb you’ll know my name. I am in a spa in WV. After reading a ton of your blog posts I am starting to believe that I am being very misused/”mistreated” as an independent contractor. We have plenty of rules to follow, chores to do or we get write ups, she holds out extra for “product usage” (her words when I asked upon receiving my first check). Among many others. She recently spoke with a tax attorney and the department of labor was at the spa for a meeting with her and, to my understanding, a few other workers. We get in “talked to” for running behind or conversations we have with our regulars whom we’ve had for a very long time. Etc etc. The list goes on. Is any of this okay? I’m pretty certain we should be considered employees, not independent contractors. Am I correct? I am very concerned about this….
Thank you for all your help!
Hi there Anon Lady! (wink wink) You’re correct. You’re supposed to be an employee. If the owner wants to dictate how you conduct business, she needs to classify you properly.
My sister has been working at a salon in Chicago for almost 2 years now. She is expected to pay for all of her tools (scissors, clippers, etc) herself, and the salon takes money from her check each pay period for things like shampoo, conditioner, styling products, etc. She is only paid commission plus her tips, but she does not receive any hourly pay or anything like that. Her employer requires her to be there on a set schedule and is actually denying her the right to take off on a specific days. Based on everything that you have written and responded with, I’m pretty sure I can draw the logical conclusion that this is not legal, but some verification would be appreciated. She receives a 1099 from her employer. Thanks for your help!
Search this website for “independent contractor” and read the articles I’ve written regarding the classification, particularly the 20 Factor post. You’re correct. She’s very likely misclassified.
I’ve been at a salon for 6 months. Recently I’ve noticed that my hours paid are lower than my hours worked. When I brought this up with my owner she told me I was wrong and must not have clocked out one day. Once I handed her proof of my timesheet, all of a sudden it was a “glitch in the system.” Recently a coworker and I took outside education in NYC. We were going to purchase the class ticket of $1,000 on our own when our owner over heard us. She said to go through her and that maybe we would get special deals for going through the salon. We didn’t get any deals and now we owed my owner $1,000 each. My coworker paid her a personal check while I worked out a deal that she would take $100 from each paycheck until it was paid off. When we got to our class and checked in it had our payment information. My salon owner paid for our class in points as well as a credit she stole from another one of our coworkers without his permission. The points are accrued by purchasing retail and backbar product (things she would have to do regardless.) Im upset because she had the opportunity to send us for free, but instead is charging us and pocketing the money and writing the education off in taxes. Is this unjust enrichment? How do I talk to her about this without her having a million excuses?And can I get out of my contract without consequences because of this? My non-compete is 25 miles which is insane and for “in-house education” it is $50 per hour for a total of 400 hours of education. Thats $20,000! It’s ridiculous and I don’t know why I signed it, but here I am stuck in this predicament.
Can you help me?
Ohhhhh, this is super interesting. I’ve heard of all kinds of unique methods owners employ to commit wage theft, but this is new. She likely will have a million excuses, but there’s enough documentation to prove that she did something wrong and manipulative. As a sidenote, your “non-compete” is unreasonable and very likely would not be held up. (If you search this site for “non-compete” and read the articles I’ve written regarding this, you’ll get more detailed information about it). My ability to help you is limited to some very extensive Googling, but I can try. You’ll get far more help from your local labor department (or state attorney’s office) and an actual attorney with a specialization in employment law.
So I interviewed for a job that offers 50/50 commission, I get paid at the end of every week but I have to supply my own chemicals, hair treatments and pretty much everything except processing caps and backbar. My issue is that she is doing groupons and things like that and if the prices are way low and I am only making 50% of that then I would be paying to do someone elses hair.. Can I be forced to honor a groupon if I am an employee but pay for my own chemicals? Is it even legal to do any of this? The salon owner was one of my teachers is cos school and it would be awesome to work for her but I am concerned about losing money.
One of the chapters in my book addresses this “deep discount dumbassery.” If you are being paid at least minimum wage for each hour you work, it is legal, however, I highly recommend that you have an employment contract drawn up that clarifies how discounted services are compensated. You’re hired under the promise of a percentage of gross sales, the salon owner should not be able to arbitrarily and significantly alter those service prices in a way that would put you at a massive financial disadvantage. Your expenses do not change and neither do hers. These Groupon deals don’t serve her either. She would be better off investing money in ACTUAL advertising. The loss from Groupons is significant and the repercussions go far beyond that initial loss.
I recently purchased a salon and my workers have decided that they no longer want to color their hair, they want to let it grow out naturally. Both girls’ hair is not looking good. So my question is, if i can legally require them to at least change it to where the grow out doesn’t look so awful. I really wish i could require them to continue to color their hair but that I can not do.
Lol! As an employer, you could make “appearance standards” a condition of employment, but I wouldn’t recommend it. Instead, consider telling them that you’ll cover the cost of toning their hair until it grows out. There’s also opportunity in this, as more and more women are moving away from permanent color to a.) avoid chemicals and b.) age gracefully. (For the record, I don’t anticipate that this trend will last very long. We see these fads come and go all the time.) To take advantage of this (and get these women back into the salon), I would promote toners and demi-permanent colors. Should the employees refuse to tone their hair, I would remind them that they are in an image-based, personal care industry and that they need to present themselves as such. Failure to do so may be grounds for termination. (Have you ever walked into a Sephora or MAC and been serviced by an employee with a clean face? No.)
Hello, Tina. I am in wv and I am also an “independent contractor”. Is it legal for a salon owner to withhold money from a paycheck for product? And is it legal for the owners to say no when we request that our schedule be changed to end our days 30 mins earlier? (Due to unforseen circumstances) I have been told no because that is the time of day we are needed. No contracts were signed upon starting this job. I am just trying to figure out if this place is right for me and if I am classified correctly. Thank you for your time.
If you’re “independent,” you shouldn’t be getting a paycheck from the owner to begin with, since they aren’t your employer. If you’re “independent,” you’re self-employed, which means you collect your own money and pay rent to the owner when it’s due. You set your own hours and run your own business. I highly suggest searching this site for “independent contractor” articles and reading all of them. You’re definitely misclassified.
I have read every article I could find on independent contractors on your site among many others! Lol. I was pretty sure then that I am misclassified but wanted to be reassured because I didn’t want to go in guns blazing and be proven wrong somehow. That’d be my luck! (Haha)
How do I even begin to approach this subject without getting a target placed on my head and without becoming the enemy. We are commission based (I assume that’s the reason for a paycheck), 60/40 which actually comes out to about 50-55/45-50 depending on the services we perform because the owner holds out the percentage for product usage. I can bet 100% if I confront our owner about that I will be told it’s a service fee. If it is truly for “product usage” is that wage theft in WV? I’ve searched but haven’t a clue about how the state code would be worded.
You approach the subject like THIS. 😀
Here’s the WV Code on deductions (I’ve bolded those applicable):
§21-5-9. Notification, posting and records.
Every person, firm and corporation shall:
(1) Notify his employees in writing, at the time of hiring of the rate of pay, and of the day, hour, and place of payment.
(2) Notify his employees in writing, or through a posted notice maintained in a place accessible to his employees of any changes in the arrangements specified above prior to the time of such changes.
(3) Make available to his employees in writing or through a posted notice maintained in a place accessible to his employees, employment practices and policies with regard to vacation pay, sick leave, and comparable matters.
(4) Furnish each employee with an itemized statement of deductions made from his wages for each pay period such deductions are made.
(5) Keep posted in a place accessible to his employees an abstract of this article furnished by the commissioner, and
(6) Make such records of the persons employed by him, including wage and hour records, preserve such records for such periods of time, and make such reports therefrom to the commissioner, as the commissioner shall prescribe by regulation as necessary or appropriate for the enforcement of the provisions of this article.
§21-5-10. Provisions of law may not be waived by agreement.
Except as provided in section thirteen, no provision of this article may in any way be contravened or set aside by private agreement, and the acceptance by an employee of a partial payment of wages shall not constitute a release as to the balance of his claim and any release required as a condition of such payment shall be null and void.
So, you’re misclassified. The owner shouldn’t be distributing your wages to begin with, but I’m willing to bet that the owner would be determined to be an employer, and in violation of these statutes.
i am an independant contractor in a salon and the owner is trying to make me pay her $50 dollars a month to the salon if i do not sell $199 a month in retail. is that legal?
That depends on whether or not you’re actually independent (a renter) or a misclassified employee. If you’re a renter, she can make any changes to the lease agreement that she pleases. Because most states don’t have laws protecting commercial tenants, it’s your responsibility to protect yourself through a very detailed lease agreement. If she were one of my consulting clients, I would highly advise her against this as it does blur the lines between employer and landlord, putting her in a questionable IRS position.
If you’re a misclassified employee, then no. This fine is not permissible in any way.
If a salon license has lapsed due to not renewing by the due date how long before it expires permanently?If closing the salon then obviously theres no need for a new application and would you need to let state board know this?will a lapsed salon license affect a personal license in anyway?
You’ll have to speak with your state board. Each state governs differently. I know that in Florida, you’re required to submit a form to announce the closing of the business or you could get fined for allowing the license to lapse. I don’t know that the license lapsing would affect your professional license, but again, that would depend on your state’s individual regulations.
I’m about to become a hair salon owner and I will be hiring hair stylists on commission. Is there a form with step by step in terms of taxes, insurance and any other info I will need to do this legally and correctly?
No, but you need to get informed–fast. Commission-only is circumstantially legal. Federal law requires that your employees make at least the prevailing minimum wage, so ensure that you’re tracking hours and making up the difference if their commission doesn’t exceed the amount they would have made at the prevailing minimum. If you’re an employer, everyone must be classified as a W-2 employee, and you must assume the responsibility for all cost of doing business expenses (including product costs, marketing, and payment processing). You also get to retain complete control over all salon operations, so I highly recommend going with employees and not renters. Don’t be tempted to utilize the “independent contractor,” status, as it’s not legal unless the stylists are renters operating an independent business within your salon. There’s tons of free information on my site here, but you may also want to consider hiring a consultant, or at least speaking with an attorney with a specialization in employment law.
I am an apprentice cosmetologist, just starting out. I was offered a position today, (on the spot without her even looking at my resume), at a little salon and she told me she mostly has her stylists booth rent but since im an apprentice she is going to do 60/40 commission but i have to supply my own color and lightener. Is this right? She also said that she doesnt really get very busy, she just stays steady and i will have to put myself out there and advertise to really build my clientele. Should i even bother with this place?
I’d say no. This isn’t a job offer–this is a “sit in my salon and maybe make money for me” offer. I wouldn’t consider it worth my time at all.
I am a barber/hairstylist in Florida. In the shop we are paid on commission. (70-30) but the owner charges sales tax (on our pay we
don’t retail product) and even a surcharge for every haircut we do. I’m not so concerned about the surcharge (they say it’s for the
credit card machine we collectively use) as I am the sales tax that is taken out of our pay at the end of every night!
They try to tell us we are independent contractors (by issuing us 1099’s) but by LEGAL def. of the law but I have discovered that we are indeed employees!
I’d love to know your thoughts about how LEGAL this sales tax that is being applied to our pay is!?!?!?
…a sales tax…on income…in Florida?! As a Floridian, I can tell you that this makes absolutely NO sense. You’re misclassified, for starters. If you were renters, it *might* make sense (not sure how we tax commercial rent here), but you’re definitely not a renter. I’m going to take a wild (largely informed, but not entirely certain) guess here, and say that this is wage theft with weak, questionable justification.
Thanks so much for this blog! Ive read through the comments, but im still a little confused in my situation. I’m going to try and make this quick!
When I started at this barbershop we started with booth rental (which was increased a few months back, which im fine with) , but now he wants to switch to commission (which I’m not keen on) He says he won’t be providing w2s which means I’m taking care of my own taxes. I will be taking cash from clients and then handing his portion at the end of the week. Does this sound like misclassification? Doesn’t sound like IC or employment. Is this legal?
Since no legislation on this exists, we have to rely on IRS revenue rulings, which show that in the vast majority of cases, salon owners who accept commission in lieu of a flat rent are ruled against 6/7 times. Those are really bad odds, so I’m inclined to say it’s not in his best interest to move forward with this plan. I advise my clients who own rental salons to set flat rates because the revenue rulings clearly aren’t in favor of the “commission as rent” practice.
Hi Tina, thank you for all your helpful knowledge. I am a stylist in Ontario and my boss wants me to sign a 5 year contract in order to booth rent. Is 5 years really long and outrageous to ask?
ABSOLUTELY! I would never recommend signing that. To start, do month-to-month. If it goes well, you can consider negotiating a year at a reduced rate, but holy crap. Five years? No way.
Hi I have a question, if you work in a salon that is commission only and you are a w-4 signed employee, can they take 10$ for every color you do and 2$ for every wax you do ect…? My boss used to work at a salon that did that and she uses that to say that the salon she owns is a better place to be because at least she dont charge us for product, but im an employee so she couldn’t do this anyway right? Also I if we are commission w-4 stylist shouldn’t we have to clock in and out to prove our hours and our commission is right?
It depends on when the deduction is being made and what conditions you were hired under. If she told you, “You make X% of gross sales,” but then deducts money, you were hired under false pretenses and therefore the practice isn’t legal. If you were hired knowing that you make X% of *adjusted* sales *after product fees*, then it’s legal. However, if you’re not making at least the prevailing minimum wage, none of it’s legal. Federal law makes recordkeeping a mandatory requirement of all employers (including tracking hours and listing deductions).
Hi Tina,
I am employed as a licensed massage therapist. I have tons of experience and my clients are generally satisfied (if not thrilled) with my work. Recently, a client paid for an hour and a half massage, received the massage, and then complained to management, who then comped her. Since they comped her, they refused to pay me my normal rate. Is this legal?
That depends. If your state law doesn’t outright prohibit arbitrary wage deductions, and you don’t have an employment contract that prohibits it, it very well may be legal as long as you’re being paid the prevailing minimum wage for each hour you work in the pay period. However, most states do have wage theft legislation that doesn’t allow these kinds of deductions (and if they do, they have to be documented and approved by the employee in most cases).
thanks for the information. I will look into this.
Hi Tina… I am very new to the beauty industry, I only graduated last March. My question is… I started working at this salon that pays me 60% commission only, which is good if we are busy, sometimes I only have 1 haircut all day and I am required from the salon owner to stay all day even if I will only be making $6.00 all day. We have a chore list that we have to do daily before we are allowed to leave and we are also required to get most of our own stylist products. Whenever she wants to do a promotion she discounts our prices (that are already pretty low for our area) but she still takes the full commission so now we get 60% of the discounted price, is she allowed to do this? or does she has to compensate for the full price? Also, she doesn’t pay our taxes but I haven’t signed any paperwork and I don’t want to be in trouble with the IRS. Also, do I need to have my own business license? I’m sorry its such a long story, I just had lots of questions. Thanks!!!
You should be classified as an employee. That means filling out a W-2 and having the owner withhold and remit your employment tax to the IRS. Currently, it sounds as if you’re misclassified. That arrangement isn’t appropriate and likely not legal. Read this post for more information.
Hi Tina! I started working at a salon as a receptionist a month ago in Florida. I have set hours that I work and have certain duties that I complete (i.e. answer phones, laundry, book appointments.). i also get a 10% commission on any products that i sell. When they hired me they said I would be paid hourly, but be an independent contractor, so I did not fill out a W-2. They said they would eventually teach me to spray tan, since you do not need a license for it. But i do not know when that will actually happen. Does it seem right that I am paid as a contractor?
Also they girls that I work with, specifically the nail techs are independent contractors, But they buy their own product. They have been told that they could give the owner a copy of the receipt and they would be reimbursed, but they have had issues with this in the past. Are there any laws on this is Florida? Also, the owner does not give us a pay stub to see if we are being paid accurately and when we asked for one they made a big fuss. Any ideas on what to do about this?
Thanks a bunch!
Courtney
You need pay stubs. That shouldn’t be up for debate. That’s ridiculous. If they have nothing to hide, there’s no reason not to give them.
Their use of the independent contractor status is completely wrong. That’s federal law and doesn’t vary from state to state. If they’re paying you hourly, they’re not trying to avoid the prevailing wage requirement–they’re evading taxes. Big, bad news. Red flag. Get out of there. Someone whose greed enables them to break federal tax law will not be above stealing money from your paycheck. You can bet on that.
The situation with the nail techs is also covered by the federal classification laws established by the IRS. They’re misclassified. The only IC’s that belong in salons are plumbers or carpenters. If those girls aren’t renting, they aren’t self-employed by any definition of the word.
I hope you’re still checking your blog. I see that a lot of time has lapsed between now and your last post. I’m in New York State and want to bring in a massage therapist; I pay a flat rent for two rooms. Because I’ve spent the earlier part of my career being used and abused by spa owners, I wanted to compensate someone for doing other tasks (laundry, answering the phone, reception duties) while they wait between clients. Is it legal to classify them as an independent contractor if they choose their own hours to do these tasks and when to take appointments (without a limit on how many hours they want to work)? I was planning to pay them $9/hr doing office duties (up to 15 hrs/wk), $25/hr for massage-up to 4 massages per week, 50/50 split on massages after that– I would offer to supply advertising, linens, lotion, etc, if they needed. They can wear what they want, use whatever products they want– at their cost. I just remember how hard it was starting out with no clientele, working another part time job, sitting around and working unpaid while waiting for walk-ins that never came. I don’t have the cash for hiring an actual employee; should I just wait it out for a full time renter?
Hi there! Sorry about the delayed response. I still check everything, but generally take a hiatus from November through January (with three kids, four household birthdays, and relatives visiting every week, those eight weeks FLY past).
Do NOT classify them as independent contractors. That’s not an appropriate use of the classification and would put you in a bad position. You’re crossing roles and blurring lines, so it’s a really bad idea. If I were you, I’d wait for a full-time renter. I revised this article last night, expanding it and including a ton of links to useful articles that may help you. 🙂
Thank you! I did read a bit more on your site. I did have therapists interested in being both renters. I offered them the option of being employees, but it was obviously less ($15/hr) than a fee split arrangement (70 them/30 me), so they preferred the fee split. After doing even more research, it looks like LMTS are only able to fee split from other LMTs. It’s very unfortunate that business practices and legality are not discussed in schools; it leaves everyone vulnerable. I really appreciate you starting this blog and providing so much useful information; I do wish I saw this sooner! Keep up the good work!
Hi! I have a question about the salon I work at. I’m a booth renter in texas, I pay 200 a week to have the space I have in the salon I work at. The owner asks everyone for a $30 contribution to help pay for advertisING and party expenses for the business when we have an event (the salon I work at) is this even legal???
If she’s “asking,” yes, it’s legal. If it’s mandatory, it’s not.
Hey Tina, my wife works as an “employee” and the salon makes her bring in her hair color/products except for the shampoo/conditioner (which I feel is ridiculous). They also charge a high commission of 55% of her total earnings. Then after being employed there for 6 months they started charging her a “employee service deduction fee”, … pretty much just taking an additional 3% to 3.5% percent out of her paycheck to cover marketing and operational charges without their employees signing anything.
Isn’t some or all of this illegal? IF so, can you please help our situation, I would definitely appreciate your it!!!
Jason
None of that is legal. The cost of doing business expenses are the employer’s responsibility, not your wife’s. It’s legal for them to pay her 45% commission, so long as the paycheck equals or exceeds what she would have made for the same amount of hours at the prevailing minimum wage. Charging the fee without disclosing it prior to the pay period is against federal law, and the arbitrary deduction may also be against state or city regulations, depending on where you’re located.
Hello. I’m in a crazy mess at the spa I was renting a booth from and need advice. I’m new to the industry. When I was prepping for my tests I was looking for a salon to go in. A friend of mine was renting a booth at a spa and said it would be a good location. My friend as well as the owner said there was so much clientele at the spa I would stay booked and it didn’t matter that I had hardly any clients of my own. Trusting them I signed a contract. Just basic stipulating my rental amount, a few basic things about what I am responsible for and what the owner is responsible for. The contract was only for 6 months at a time. Stating again I said I didn’t feel comfortable if wasn’t guaranteed to make my booth rent. Several months I made not a penny and had to pay my rent from my other job income. There was never a flourish of clients as guaranteed to me. The owner made me participate in parties, promotions, and discounts without me agreeing. Also booked appointments in times that were not convenient for me. She never gave me receipts for my payments so I wrote them down. I just told her I don’t wish to renew unless I can be commission based because it’s not fair I make no money but still have to pay her seeing that she knew I was new without clients and basically promised me clients. She refused to do commission and has locked all my supplies in the shop. She is trying to charge me full rent for November as well as December even though my lease expired October 10th. Is that legal? I figured I should only be required prorated rent for this month. Also as my items are locked in, the other nail tech is using my supplies. She refuses to even release my license to me. Can I take the police to get my stuff or does she have the right to hold it? I offered prorated rent but she refuses still. I’m willing to sue, but in the meantime my supplies are being used and are not safe. One of my chairs were already broke by them and I was stuck replacing it before. She has also had parties I didn’t agree to participate in and there wasn’t enough nail techs so she brought in unlicensed girls and made us work with them then one client complained about an improper service and I was made to redo it without compensation. I live in Kansas. Thanks for your help. And if I need to sue, can you please direct me on the kind of lawyer I need as well as what I can sue for. Also can I sue the other tech for using my supplies while they are held hostage by the spa owner?
Funny story: I usually take a hiatus from this blog (and other work) from November through to the new year. Usually, I still respond to comments, but this year I somehow locked myself out of my administration panel. I’m PISSED that I didn’t make it a priority to get into it until now because I missed this comment.
First, you were screwed. It’s a typical scam salon owners run. Don’t feel bad though, this happens to damn near everyone at some point in their careers in this industry.
Secondly, I normally don’t promote my book, but I’m going to now. I highly recommend that you read it. I wrote it specifically for people like you who are new to the business, in hopes that they could avoid this kind of bullshittery.
Third, if you haven’t already, definitely call the police. I don’t know where you’re located, but generally what she’s doing is considered theft. You can bring her to court for the (very, very likely) misclassification. If she was booking your appointments through a central reception desk and taking payment from your clients at that desk, she was breaking some pretty clear regulations established by the IRS and the DOL. The attorney you’d want to look for would be one with a specialization in employment law, or one with a specialization in landlord/tenant law. Try and find one with a reputation for defending exploited employees or wronged tenants as opposed to those who defend employers and landlords.
Hi I just want to thank you for all your information! Wow there are alot of crazy Salon owners out there!! I just have a couple of questions. I am a massage therapist and I own my business! I have a friend who has offered me a deal it seem really good and I will have a contract. She is opening a high end salon and at a different time she was my manager. She wants me at her salon so I will be renting a room if it works for me which I will be paying $500 a month and doing my business inside hers I guess booth rental, but if I do any of her clients which will then be mine I will be on commission base which is 60/40 split. It seems good, she said I will still have control over all my own scheduling when I am available and such, is it legal to be both a booth rental and employee at the same time? And does it seem like a good deal. I think it will bring me alot of clients. But I don’t want it to be a conflict. Thank you so much
It’s actually not legal, as it crosses some boundaries established by the IRS with regards to your independent status. These arrangements frequently end poorly, so it’s generally best to agree on a one-time referral fee for the client and keep both of your businesses entirely separate. The ongoing split of revenue puts her into a tricky position legally, so it’s really not in her best interest to move forward with it.
Hi I’ve worked in spas as an employee and as an independent contractor over the years. Currently I’m working as an independent contractor (massage) in California, I am paid weekly commission. At the end of the year the owner of the spa gave me my 1099 but also gave me a different year total to list on my taxes. Basically she wants me to claim I made 100% of the income, and then she had a list of expenses for me to claim: office expense$…, rent$…, advertising$…, etc. I told her I don’t have receipts for any of those items and that I didn’t take in the full payment. She insists that her tax people are totally in agreement with this. To me it seems like she’s trying to make it like her IC’s are booth renters or something. I like where I’m at, we are probably not classified correctly but I don’t think anyone is in this area. The owner is is very nice and maybe she has gotten bad advice but I don’t want to be dishonest on my taxes. I only will claim what I was actually paid and I will only write off what I actually have receipts for. Do you have any links or articles you can recommend? Thanks, you’ve got some great advice I wish I had read this when I started out many years ago!
You aren’t classified correctly, and what she’s trying to do is get you to commit tax fraud by having you claim her expenses as if they were your own to hide the fact that she misclassified you. I can guarantee you that her “tax people” are absolutely NOT in agreement with this, if she has any “tax people” at all. I’ll give her the benefit of the doubt though, because I have seen accountants and lawyers both steer people wrong before. I’m going to strongly advise you not to go along with her plan. She’s the only person who will benefit in this arrangement, and should the IRS catch wind of it, you’ll be the one they come after. You’ll only have your word against hers to defend yourself. You want to know if she’s telling you the truth? Ask her if she’s willing to detail her “tax person-approved” plan in writing and sign her name to it in the presence of a witness, or if her tax person would be willing to endorse the scheme in writing and sign off on it. I’m willing to bet their answer will be no. Trust your gut on this one and refuse. Don’t let her make you complicit in a tax fraud conspiracy.
Thanks, I agree. I only claimed MY income & expenses last year but she is pressuring me about it more this year. I’m not going to claim money I didn’t collect or expenses I don’t have receipts for and can’t verify, all those things went through her business not mine. I don’t make the decisions on how her percentage of the service is spent. This is the only part of my job that makes me uncomfortable. Unfortunately most places in the area are set up similar but worse, misclassifing employees as ICs. Aside from the tax issue I’m happy where I am at 🙂
Consider asking her if she’d be willing to claim those deductions herself this year, and move forward with a new method of bookeeping and recordkeeping that clarifies the boundaries between you to keep this from being an issue in the future. It’s in both of your best interests, but mostly hers, lol. She shouldn’t have a reasonable objection to it.
I have been sub contracting in this salon for over 20 years. I just found out in the past 30 minutes that the owner sold the salon. How I found out is the new owner just came in and announced that she is the new owner as of tomorrow and everything in the building belongs to her and the new agreement is 60/40. Then left. What just happened? Please advise.
Well, when a sale happens, you end up with a new boss and have to abide by their rules. Unless you’re an actual freelancer working in multiple salons and on the side, you’re unlikely to be a legitimate independent contractor, so the arrangement you’ve been working under likely wasn’t legal. This new 60/40 arrangement isn’t either unless you’re classified as an employee and paid at least the prevailing minimum wage.
I recently just got my Esthetics license a few months ago and have been working as an independent contractor. I’m confused by how I’m suppose to be paid. I receive 35% commission and get paid through a check from the business at the end of the week. Sometimes I go a week or two without getting paid because I didn’t have anymore clients for the week. The owner recently started using groupon and I could end up making less than minimal wage. Theres also no guarantee the client will leave a tip. The other day the owner called me at 10:30am and I missed the call. I texted her an hour later asking if everything was okay. She replied hours later saying “Pick up next time. I had a woman on a groupon call me this morning saying she wanted it immediately. So I had to do it.” I feel like she could of responded more professional and for all I know it could of been a 30 min facial for $22. I live 45 min away and thats without traffic theres no way I would of made it.
Not only would you not have mad it, the money wouldn’t have even covered your gas. You’re not classified or paid appropriately. You may think you’re making 35%, but you’re really making less than 15%. When you’re an independent contractor, you’re self-employed and responsible for paying the entirety of your self-employment taxes. That knocks 15.3% off your paycheck. Quit. File an SS-8 with the IRS and report that salon owner to your state labor board. This infuriates me. Nobody should be used the way you’re being used.
I plan on quitting when I go in on saturday Im meeting with a salon on Thursday and will hopefully be hired. The owner I work for posted a special on Facebook saying “Buy a 60 min facial, Get one free” Since I’m commission am I suppose to get paid for the free one? Also, are owners suppose to tell independent contractors to try and bring in clients? I’m turning 20 in July so trying to build a clientele is difficult at my age since everyone I know is trying to pay for college. In Rhode Island no one wants to drive 45 min to the other end of the state for a service to them thats a road trip. Ive mentioned that before but I’m always being pushed to bring in clients. Last week when I did a facial for a groupon client the owner did the client consultation and had me wait in my room because she wants a good review. Im working hard to get better with client consultations and I felt so embarrassed. I feel like since I’m so young the owner feels that no matter what I do in the spa she can do better.
If you’re an independent contractor, your job would be walking into the salon, doing the service, taking your money, and walking out. There’d be no expectation of a continuing relationship, and she would be out of bounds to expect anything of you other than the performance of that single service. If you were a self-employed booth renter (classified as an independent contractor with the IRS but not acting as a freelancer like in the previous example), she’d have no right to dictate anything to you. Her job would be to collect your rent and make sure the building is in proper working order. That’s it. With the deal you’re getting right now, you’d be better off renting.
I am an esthetician and massage therapist and currently an employee. The salon owner has asked me to provide my own liability insurance for massage as I am the only massage therapist. Is that legal? I feel like as a commission employee I should not have to pay for my own insurance.
You shouldn’t have to pay for it, but whether or not it’s illegal will depend on the state’s laws. (Some states absolutely prohibit employees to assume “cost of doing business” expenses.) However, I consider PLI policies an absolute necessity, so you should have one regardless of whether or not the employer makes it a requirement. They’re cheap (generally around $300 a year), and are well worth the cost.
I’m with you on this, though. If she’s covering the PLI for the employees who aren’t massage therapists, she should be covering you as well.
I am the owner of a nail salon in Texas. My salon was cited for violations by an independent contractor, booth renter, or employee. Who is responsible for paying the fine? she offered to pay for half the fine which I think is very fair, but now she will be leaving to another city and the state board has not contacted me about the issue yet, I called and they told me they could not tell me when they would review my case because they have so many cases that need to be reviewed. thanks for you advice in advance.
Which was it? A booth renter, independent contractor, or employee? If it was a renter, they need to cover the fine. If it was an employee, the fine becomes your responsibility.
who is responsible for a violation fine? the booth renter or the salon owner?
It depends on the state board’s regulations. Generally, a salon owner is responsible for it, but some states may hold the renter responsible (as they should). In any case, you can draft leases so that the renter assumes responsibility for any fines assessed against the salon that are her fault. (For example, if the inspector finds that she isn’t disinfecting her combs, she needs to pay that fine. If the inspector finds that the landlord has failed to provide hot water for laundry and handwashing, they would take responsibility for that fine.)
Dear Tina!
I have an emplyee who left my salon and open new salon which is 2 miles away from my shop.
I concern she will take away my customers to come to her nail shop.
Is that any law could force her not to do that? Is that ligal to do that anyway?
My nail shop in Vancouver, WA.
I would hear some advise from you.
Thank you and you have a good day.
Hi! I’m sorry to hear about your employee turned competitor. Unfortunately, unless you had the employee sign a non-compete agreement or a non-solicitation agreement, there’s nothing you can really do to stop her. If she stole the client database, you *might* be able to take action (especially if she were a properly classified W-2 employee), but if that’s not the case, it’s pretty much impossible to a.) prove client theft, and b.) prove irreparable, substantial monetary damage to your business.
I can tell you have never owned a salon and you hold very little regard for salon owners. Not all of us “rip off” our stylists and make them work as cheap labor. The first two years of my salon being open, I DID NOT take a paycheck. I provided my small staff with healthcare and benefits and made sure they got continuing education. Yes they fold towels, yes they take out trash and sweep. WE ALL DO. If they want to build their customer base they are required to stay the full shift they are scheduled. There absolutely is a hustle factor to success in this business. If a salon is feeding the stylist clients they are not getting on their own then they need to be available especially if there is any walk in business. I realize your main goal is stylist protection and I am all for it (trust me I treat my team VERY well) please give the owners that are doing to right thing some credit. We are the ones assuming ALL the risk. For the stylists that you do provide help for that are really in bad salon situations, kuddos to you for doing the right thing. Again just remember there are a lot of salon owners who are doing the right thing by their staff. Thanks for your time.
1.) You’re wrong. I have owned a salon, and I’ve managed them for over ten years.
2.) You’re wrong. I hold salon owners in very high regard, but I also hold them to high standards. Read some of the posts where I bash up on salon staff for expecting more than they’re owed, delivering less than they’re capable of, and failing to adhere to appropriate professional standards. I don’t discriminate–I call out all forms of bullshit.
3.) You are an exception; not the rule. Read through the comments on these posts. Owners like you are unicorns. My job as a consultant and educator is to create owners like you. Just because this post may not have applied to you, does not mean that it doesn’t apply to a good deal of salon owners.
4.) My main goal is to spread the right information. Spend more time on this site getting to know me before you presume to know what my motivations are. I work with salon owners and salon professionals, but by far, I work more often with salon owners. I help them design better compensation structures that are more fair to them and their businesses. I help them through their legal battles and their IRS/DOL audits. I work with their attorneys, helping review their leases and employment contracts. Again, I don’t play favorites. I care about everyone in this business.
5.) Again, you need to read more. I give salon owners a tremendous amount of credit. I’ve repeatedly said that salon owners assume a massive amount of risk and that they deserve respect, and obedience from people they legally and gainfully employ.
You’ve made several assumptions about me, so I think it’s only fair I make one about you. I’m guessing this is the first post of mine you’ve stumbled upon. Please, get more acquainted with people before you pass judgments on them.
Can you sue your salon owner for loss of income in the event that they try to terminate your contract on the spot? I’m a booth renter, by the way.
If the contract has eviction detailed and the owner violates that agreement, then yes. Commercial landlord/tenant laws are hard to come by. Many states don’t have them, so you’ll want to talk to an attorney.
Thanks Tina. This lady straight up out of blue was like pack your stuff and get out. No 30 day notice. No 2 week notice. I paid my rent early each week. I was the youngest at my shop with a 1k+ followers in social media (4x more than the salon) and I didnt understand it. I cried and begged to stay there since it was my only source of income. And if I’m not working, I’m not getting paid. She luckily let me stay I was so scared I was going to have to cancel all of my clients that week and possibly lose some. Found out later that she was trying to give a friend of hers a booth to rent in her shop.
That’s so callous, irresponsible, and immature. Ugh, I’m so sorry this happened to you. 🙁
Wow. I was just offered a job in a salon that does 1099s and was told all about how I’ll make more money because I’ll be paying less taxes than at the corporate salon I’m currently employed at. But…there’s a schedule, a dress code, sanitations at the end of every shift, etc. I’m told I’ll be operating as an independent contractor but it sounds from your article like I would be an employee responsible for my own taxes. Should I ask the owner if she does indeed audit the weekly paychecks for minimum wage or should I just bow out? I’m very frustrated at the lack of control in my corporate salon which recently decided which colors I can and cannot use,but can’t afford to open a salon suite on my own.
You’re going to pay DOUBLE the taxes you’re paying now (unless you want to evade taxes and risk an audit–not something I recommend). As an “independent contractor,” you’re considered “self-employed” by the IRS, which means you’ll pay 15.3% of your income to the IRS instead of the 7% you’d pay as an employee. As a “self-employed” person, you wouldn’t be eligible for any kind of wage (minimum or otherwise). You wouldn’t be entitled to overtime, worker’s compensation, or any of the other benefits that come with being an employee–but under this arrangement, you’d still be controlled and treated like one. This arrangement offers you NOTHING and offers them EVERYTHING.
Bow out and report them. They’re doing every single illegal thing I warn about all over this blog.
Take it from me. My wife just went through the same thing for a year and finally told the own to $)@K off. She is now booth renting. It is slow going but it takes time to build your client base. My wife paid a lot in taxes last year! I mean a lot.
I did tell her no. May I print this blog and distributed to every Beauty School in my area?
Absolutely!
I am new to the cosmetology industry I haven’t had my license for a full year yet. My coworker said state board doesn’t allow a stylist to work by themselves in a salon if they haven’t had their license for a full year. Is that true? I’ve tried to research it but I can’t find it. I live in Michigan and I’m not a booth renter.
You can read through your state board regulations to learn if this is true or not, but it wouldn’t surprise me. Michigan allows licensure through apprenticeship, which means you can skip cosmetology school for the most part and get your education hands-on in a salon. Because that’s the case, it seems reasonable to me that they’d restrict new licensees from operating without direction for a time.
It’s possible she just doesn’t feel comfortable leaving you alone at work and doesn’t want you to think she doesn’t trust you or your skills. She’s nicer than I am, lol. If I were your employer, I’d tell you outright that I’m not yet comfortable leaving a new licensee on the floor without a senior cosmetologist to back you up. The thought of a new licensee ending up in a sticky technical situation would be enough for me to work longer hours to ensure you have help available if you need it. I think it’s more likely that she didn’t want to undercut your confidence or hurt your feelings. If that’s the case, don’t take it personally. It takes at least three years of full-time work to get to a place where you’re unlikely to be confronted with a scary new challenge you haven’t yet encountered. I think she knows that and has likely been in a similar situation (alone, new, and facing a crisis she didn’t know how to handle). I think she’s trying not to be like other salon owners who throw fresh meat onto the floor and tell them to sink or swim. If I’m right, you’ve likely found yourself a good salon owner.
EDIT: Oh, I just realized she’s not the owner, lol. Sometimes, I read too fast. Anyways, it’s possible that it’s true in Michigan.
Thank you the owner was making me work alone the coworker was worried for me and my license but I left there today thank you.
I work at nail salon and I help them with training and answering phones laundry I get paid by Commission it’s it illegal not to get a day off?
That depends. If you’re being paid overtime, you theoretically could legally work as long as you please. However, if you aren’t, it’s absolutely not. You should also not be getting paid by commission only unless your wages meet or exceed the prevailing minimum wage.
Hi Im new to all of this just have a concern. My daughter is being trained to do hair correction the person who is training her wants her to sign a 2 year contract getting starting at 10$ an hour.The shop is one hour away and she works from one to two in the afternoon till two or three in the morning if not later. Just want to know if she should sign the contract and what she should be looking for or what kind of questions she should ask. please help thanks.
What in the actual hell is going on there? I have serious concerns, and they have nothing to do with her pay. First, why is this salon open that late? Human trafficking and prostitution businesses often set up fronts as beauty salons, and they use those businesses to launder their money. These hours, to me, are a huge red flag that something isn’t right.
Read this post, then this one, and then tell her to save the money for the training and pay for it outright. DO NOT allow her to sign that contract. Find out what the hell is going on down there. Something is certainly NOT right. (How many people do you know that go have their hair done at 2 or 3AM?)
Hi Tina, so I have a situation that I’m put in as of 4 hours ago on 8-28-16 that maybe u can help with?? I am an independent contractor stylist of 11 years. I recently had a unpaid consultation with a potential client. Due to some miscommunication and scheduling problems she was not happy with her appointment and continued to write a bad review on yelp. The salon owner (newly of 2 years) went behind my back contacted the client and asked another rental stylist to do a free service to regain her business. I approached her about it and as of now I have less than 24 hours to get my things along with her locking me out of the online client scheduling so I am unable to see who I need to contact and inform of the situation. I’m pretty sure this is not how things should be handled on her end and am considering legal action. Please help!
You need to IMMEDIATELY get an attorney. This isn’t appropriate at all. What she’s doing is inappropriate. She’s interfering with and harming your business. Helping you is far outside of my pay grade, though, so call someone who can.
Hi Tina! I am in Oregon and I am a booth renter. I am trying to do research to find out what are the laws about a booth renter selling their own products. I would like to but my salon owner says she provides products to sell and gives me commission. How can I find the specific laws or documents that state I am my own business and I can do this?
Hi Jessi! Most states don’t have specific laws pertaining to retail sales within a landlord’s business. Generally, most states leave that up to the landlord. Many landlords use their retail boutiques to help keep rental rates low (especially in high-cost retail spaces in cities like LA and NYC where the booth rental per station would be too high for most stylists to afford if the cost weren’t offset by the retail department). However, if you’re interested in retailing a line she doesn’t sell, consider setting up an online store. You’re self-employed, so there’s nothing she can do to keep you from operating an online retail outlet, so long as your lines aren’t intersecting with hers. (If you’re undercutting her on the same products she’s selling, that’s a conflict and would probably inspire her to immediately terminate your lease.) I don’t see why she’d take issue with you selling completely different products that she doesn’t carry, in a way that doesn’t take up floor space, distract from her retail boutique, or conflict with her own store.
So I was working as an IC at a commission salon and decided to go to boothrent. I bought business cards and let some of my clients know I was leaving and gave out my info or obtained their info through the clients themselves. Well my previous boss fired me for “soliciting” and refused to pay me on payday. I called the labor board and was told they had 72 hrs to give me my check, well it took a week for her to send me my check, when I went tot cash it, there was a “stop payment” on it, so I contacted them and asked why and they said they are suing me and the girl that got fired along with me, suing us for “stealing” client information. So we went to the labor board to file a claim against them for 2 checks that are owed to us. It’s been almost a month since we got fired and still haven’t received our money. They have really put us in a bad spot. We both had to move out of our homes and move in with other ppl since we can’t afford to pay our bills. I just don’t know what to do anymore. We both work at booth rent salon but it’s been slow and we’re really tight on money since we haven’t reviewed the money owed to us. What can we do???
The only thing you really can do is keep following up with the labor board or hire a private attorney. This is why I find these crimes so incredibly egregious. These owners do this to people like you because they know they can. I’d recommend filing an SS-8 with the IRS the second you’re served with any kind of court document. By enforcing a non-compete, the owner is admitting you weren’t actually independent.
I work in a salon in TN , she keeps saying that we are self employed and we do
Pay our own taxes . However she makes us get a business license each stylist
Has one and we pay taxes on
That to and we work her hours we don’t have a shop key ! But she writes us a check
Weekly ! Wouldn’t that mean we are legally an employee ! And why do we need a business license this is the first salon I’ve worked at that does that !
You are very likely an employee. She’s required you to get business licenses to try and hide the fact that you’re misclassified. You should file an SS-8 with the IRS.
Comment: Can a customer be referred elsewhere if it is not possible for the salon to provide services to the person in accommodating their special needs?
Absolutely! Not only can they be, but they should be for their own benefit. I recommend having a network of physicians and specialty practitioners (podiatric nail technicians, for example) to refer them to.
I own a booth rental salon. A few stylists are breaking away and starting a new salon. A couple of the stylists that are leaving have been at my salon since right out of school. So, I would say most, if not, all of the clients they service came after they were already at my salon. I have heard that they are notifying clients of the their new location, surely in an attempt to take them, while still working in my salon. You said it is unlawful and unethical for them to do that and we should take legal action. How would i go about proving it and what would the damages be?
If you own a booth rental salon, you cannot do anything about it. They’re business owners and you’re their landlord. You weren’t their employer. If you were employing them, you may have legal recourse, but if they were renting from you, they’re not employees–they’re tenants. Technically, the clients belong to them and their independent businesses.
Hi! I recently switched from full time booth renter to part-time. I’m one of three hairdressers in the salon, one of which is the owner. She has asked me to pick specific days I have to work and she’s going to charge me if I work any other days than the 3 days I choose. I picked Monday Friday and Saturday. So if I work Tuesday Friday and Saturday I have to pay her $25 extra on my booth rent. Is this normal? I would understand if I was sharing a chair with another hairdresser but we have an extra station at our salon and no one is using it so if she hired someone else they could always use that chair.
She might be looking to rent out your station to another part-time stylist, which wouldn’t be unreasonable. (There are new apps coming to the US market that allow owners to put stations up for rent to one-time and short-term tenants looking for a place to do a few services. It’s a pretty cool idea. I did some consulting for the company when they were in beta, so this is probably a solution she’s exploring. If she does it right, you guys may be in for a rent decrease, or some cool amenities.) If she pro-rated your rent for part-time hours, she’s trying to keep you from abusing that rate by working more hours than you’re paying for, which also makes sense. (It’s not fair to the full-time renters if you’re working more hours than you’re paying for.)
What a wealth of information!! Hoping you can answer my questions. I rent a suite in a free standing building (all suites are cosmetology/nail or make up) in Nevada where I have my own business, just me, no employees. My month to month lease agreement allows for subleasing. I am looking to bring in one person to share the room in order to help with the rent. Based on reading your comments, I believe she would be classified as a “booth renter”. We would each have our own clients and schedules, I would have no say in her business and she would have no say in mine. For ease we thought that we would equally share the cost of supplies. My questions to you are:
1. Is “booth renter” the correct classification? And do I have to provide her with any documentation for her to file taxes?
2. Since I would be subletting she would pay rent to me and I pay the entire amount to the landlord, so do I have to claim the rent she pays to me as income and reflect the entire amount of the rents as business expense or can I simply just state only my portion of the rent as business expense on my taxes and she state her portion of the rent as business expense on her taxes?
I would also appreciate any input/comments, things to consider that you might have. Thanks!
For “booth renter” to be the appropriate classification, both of you should be purchasing and using your own supplies–not splitting the cost. Aside from that, the arrangement is solid. You’re the landlord, so at the end of the year, she would need to provide you with a 1099 form (which is basically a receipt for all the rent she’s paid you, if she’s paid you more than $600 in rent for that year).
You would absolutely need to claim that rent as income. The rent you pay to your landlord is the business expense you claim. (If what she pays exceeds that, it’s considered a profit and is taxed accordingly as income.) She would claim the rent she pays you as a business expense as well.
As an example, let’s say your rent is $650 a month total. You charge her $150 a week ($600/month from her, you pay the $50 difference). After a year, you claim the $7,200 as business income. She claims the $7,200 as a business expense. You claim the $7,800 total (your actual $650/month rent for the entire year) as a business expense. Your landlord claims your $7,800 total as business income. At the end of the year, your renter gives you a 1099 for the $7,200 she has paid and you give the landlord your 1099 for the $7,800 you’ve paid. Does that make sense? I hope it does, lol. I swear I’m trying to simplify this. Let me know if you have questions!
Hi I’ve been a cosmetologist for about 10 years. Well finally decided to rent a booth.. everything was well in the beginnibg . Until I decided to start selling my own product to my OWN clients and going in late afternoon. And I never sign a lease with the salon owner. And well just the outta of no where I get a text message saying that “they don’t want to rent the booth and go go get my stuff and leave them the key”. I don’t know what to do can they just really txt me and tell me to get my stuff?!? Please help me I don’t know what to do!!!!
Without a lease, they likely can. Not many states have laws protecting commercial tenants (which is what you are). Even then, many states rely on your lease terms. If you don’t have it in writing, there’s very little you can do to defend yourself.
Hi Tina! Your friend from Tennessee here… to refresh, I used to have 1099’s, and switched to having employees in July because you scared me so bad. 🙂 Anyway, we now have 4 employees, and a couple of months ago, a rock-stare-wannabe stylist from Florida who used to own a large salon showed up at my door. My wife was having surgery that week, and she stepped in and took over her book for the week, which really helped. We gave her a $150 gift card to the nicest restaurant in town on top of her pay to thank her. I asked her to sign a contract prior to hiring her as an employee. She refused. I wanted to see if it could work, so let her work from October 1st to December 1st as a 1099 for a trial period. It didn’t. She wasn’t trustworthy, and her last two days she spent lots of time in her room whispering to my young stylists. We let her go. She popped up on another salon’s facebook page with the announcement she’s working there. Her picture they used was taken HERE on our iPad with our salon product area in the background, WITH the picture we used to promote her in the newspaper and online (I’m sure it’s copywrited if it was in our newspaper ad)??? Anyway… she knows Millennium very well, so somehow obtained at least SOME client contact info, probably when I walked away from the computer and was logged in. (or she claims she has some of the AQ010 daily schedule reports that SHE TOOK HOME with her that had phone numbers included. (But I NEVER check that box, so I call B.S.). Regardless, she took reports that are our property home with her without our authorizaiton, and that is stealing. How do I know? Because a former client called me today to let me know she’s pissed that this employee called her to let her know she’s no longer here, and invited her to her new salon. The client in question LOVES us, but can’t come anymore because she has a new job in a diifferent city. BUT, she is pissed we don’t have control of her contact information, and that someone besides us accessed it. I don’t blame her.
The way I see it, even though she was an independent contractor (rightly so… she had other side businesses, and I made a point not to treat her as an employee), independent contractors still aren’t authorized to steal, I’m sure. Also, according to the Tennessee Uniform Trade Secrets Act, she broke the law, and I have 3 years to decide to pursue. My lawyer tentatively suggested I could easily win.
My wife… the co-owner is sweeter than me. She’s just relieved someone like that is no longer here. Most of the clients she served was my wife’s overflow. However, I did give her about 20 new prime color clients over that 8 weeks, at least. I would love to sue her ass to send a message to other future thieves. My wife wants to think about it. What do you think? Thanks!
You’re completely right, and if I were you, I’d absolutely pursue her in court. Here’s the thing—you’ll likely win a judgement of some sort, but whether or not you’ll ever recoup what you spend in legal fees is debatable at best. However, I consider it a serious matter of principle, and personally, I wouldn’t give a crap about the money. For me, it would be enough for me to be able to tell the clients I didn’t let the theft of their information go unpunished. I’d want them to know that I fought for them and that I absolutely didn’t permit it. I’m on your side here, but I’m known for being really vindictive about things like this, lol. There’s a time for your wife’s patience, forgiveness, and even temper. Personally, I don’t think this is that time. (Also, I laughed out loud when I read about how I scared you, lol.)
I’m sorry you guys had to deal with this crazy person. Had I known, I’d have warned you, because I learned this lesson also. Ex-salon owners need to be carefully watched. They poach clients and employees. They lead mutinies. (That’s why she was whispering with your current employees. She’s trying to pull them out from under you and open her own shop. That’s a tactic as old as this industry.) It’s always really upsetting and frustrating when this kind of thing happens, but you’re on the right track. Make an example of her so every employee in the salon knows they’ll never be able to pull that shit with you and walk away from it.
I’m kind of new to booth renting and I’m a Independent Contractor in Ohio. My question is this…..when renting a chair is it ok for the salon owner to base your rent amount on how many days you work? Example if I work 3 days a week it’s $600, 4 days $700, or 5 days $800. Also the salon is closed Sunday and Mondays, we all have keys but she doesn’t want anyone working those days. It seems like for no other reason then just being able to have the control. (which she lacks because we rent) The couple of booth renters she has are all very clean,orderly and follow all the rules. Not sure why the hangup of overly not wanting to allow staff to work and accommodate clients. When normally there isn’t a receptionist at the desk even during regular work hours, which in the lease states there will be one present to welcome guests. (clearly thats not the reason) I can see saving on utilities but being open a few hours and accommodating clients I feel is more important. I’m up for resigning soon and have heard she’s changing the amount of rent depending the amount of days we work. Just want to be clear so when it’s my turn I will have the correct information. Thanks
A lot of salon landlords base rent on a daily rate. Whichever rate they charge and how often they expect payment is completely up to them. They’re also permitted to set hours however they please (however, they can’t change those hours at random, they have to be in your lease).
The reason she likely doesn’t want you there when she isn’t there is that it’s a huge liability to have anyone working alone in the building. This is a liability she’s incurring as the landlord and property operator. Personally, I never, ever allow anyone to work alone. Since she has renters working alongside employees (a stupid idea, but whatever), she’s also probably concerned about renters stealing product from her salon. Try not to take offense to this–it happens a lot and she’s wise to be cautious about it.
Hi. Boy I’m a little confused. I have been working in a salon as a sub contractor I guess. Owner says I’m a 1099. I just want to clarify what I have been reading. If I’m a ic or SC I do not have to go by owners dress code. I do not have to do cleaning except my own. I can make my own schedule. Perform my services the way I prefer. Now here’s where I really need clarification. She was paying me 50% of all cash transactions at end of day. If any were credit cards I’d have to wait a week for a check which also included any tips for that day. Now because I was getting confused and I’m checking out my own clients through her software I told her it would be easier for me if all transactions were paid the following week. She also informed me that I’ll be getting paid every 2 weeks. I just want to make sure I’m not an employee.
You cannot be a subcontractor in the beauty industry. (Well, you can, but those arrangements are extremely rare.)
To determine whether or not you’re an IC, I recommend reading this post and evaluating each factor for yourself. You absolutely should not be using her software or her merchant services account.
OK, I’m using her software and work there on a regular basis. She tells me I need to wear a jacket that has her logo on it. I believe I’m an employee. She offered me an hourly at the beginning but I didn’t think it was enough so I suggested commission. But after reading this I’m a commissioned employee but paying taxes except the sales tax. Now that I know this I’m not sure what to do. She won’t let me chair rent. And I was approached by another salon owner to work at her salon being paid commission just as I am now.
When you’re misclassified, this is how you handle it.
Hello Tina, quick question I’m in the process of joining a salon opening in February. I will be paying the owner booth rent. I have no experience of working in a salon, so this is new for me. The owner expressed to me and two other stylist (that have no experience as well) he would be paying taxes and we dont have to worry about any of that.<—- that statement didn't sit well with me. He said he will provide business cards and products for us. Are we employees paying booth rent? Confused! He mentioned he doesn't want to sign any leases or contracts "tying us down" in his words…. I could use your feedback please help. Again, I'm new to this industry.
You’re correct. It sounds like he’s trying to have it both ways, and him paying taxes? That doesn’t make any sense whatsoever. If I were you, I’d get out of there. He’s preying on the inexperienced, which is typical of exploitative salon owners who know exactly what they’re doing.
Hi Tina! This blog is immensely helpful, and I really appreciate your dedication in sharing your knowledge and advice! I am not in the beauty industry, but I am doing some online research for someone who is expanding her salon, which has become a rather successful business venture. **DISCLAIMER** Just doing initial research for this salon owner, and not using Google as the only source for her legal advice and business decisions, but getting her started based on questions I’ve asked her (from my own experiences as a contract writer in a different, heavily-regulated industry) that she is going to need answers to.
She is the owner of a 100% booth rental salon. In reading your VERY reiterated guidelines about independent contractors, I am very confident she is adhering to them–stylists pay a flat rent, nothing else is deducted EVER. They manage their own clients, schedules, branding etc. The owner is very new to being a business owner, and I am helping her on research in regards to leasing out booth and contracts. None of her renters have signed anything, so she is also working on providing a leasing agreement for her renters to sign. She owns two salons now, with about 20 independent contractors, so it’s probably a good idea.
One thing I do have a question about is regarding what she can charge for rent. The rental rate she charges is inclusive of the fact that she provides cleaning/towel services, products for renters to use on their clients (but not obligated to use or sell), and quite frankly a lot of other products that, as a landlord, she is not obligated to provide, but has chosen to. This is definitely outside the norm for landlords of this particular industry (based on what I’ve read from your site and its commenters), but is she okay including these “perks” as part of her rental amount regardless if her renters are actually using them? At this point, none of her renters have denied any of these added perks, but that may not always be the case.
Perfect! The laws are actually super simple, but people who have been in this industry for years have become accustomed to variations that are actually illegal, so I have to go into this insane amount of detail, lol.
She can include perks if she likes and you can read this article here for more information on a few options she could consider and how she can implement it. She can absolutely charge on an a la’ carte basis if she wants. I consult for many salon landlords who do the same for their renters and are making a nice income doing so.
I rent at the salon I work at and just wanted to know that if the salon owner has to provide quats for the salon?
The salon owner isn’t required to provide renters with anything other than a space (unless the rental agreement specifies otherwise). I wrote a post about that here.
Hi Tina,
I think I know the answer to my questions, but I would like your opinion if you don’t mine.
This is actually about my husband, who is a tattoo artist. I figure a salon and tattoo shop can’t be all that different.
He is given a 1099. I think he’s misclassified.
He does buy and use all his own supplies (ink, needles, cleaning supplies, paper towel, etc) he sets his prices for the most part.
However, he has a schedule, he has to be there when the shop is open on the days he works. No leaving at 6:30 when he’s finished with his 5:30 appointment. Yes, there could be walk ins for him to take, but I get the impression from him that his boss (which he wouldn’t have if he we’re truly a contractor) wouldn’t let/want him to even if my husband didn’t care if he got any more clients or not.
Payments get made thru the owners’ square reader and my husband gets his cut at the end of the day. Shouldn’t it be the other way around?
He is paid 50% commission of his daily totals but no receipts are given. I would assume that since he’s 1099’d that other 50% would be considered ‘rent’. He asked about receipts but was told it’s considered the boss/owners income and for my husband to claim it would be ‘double dipping’. If he were an employee, sure, that makes sense. Something about that just doesn’t seem right to me. He’s the one setting the price for his work, but he can’t claim the portion he pays the shop?
Maybe I’m missing something but I still feel like he should be an employee and his boss is trying to be on both sides of the fence.
Him getting a 1099 makes our lives so much more difficult, especially since he doesn’t really have his own business. And the self employment tax on top of it!
None of this actually bothers my husband, he tells me ‘that’s just how tattoo shops work’
What are your thoughts on all of this? I really think he’s being taken advantage of and it’s just a way for the owner to not pay taxes and for us to just deal with.
That doesn’t make any sense. None at all. It’s illegal, it’s not “double dipping.” The owner claims it as business income and your husband would claim it as a business expense. It’s not rocket science. You should read this post. He needs to be renting somewhere, paying a flat fee. If he can’t find a shop that runs legally, he should open his own (he’d be better off at that rate, renting spaces to other tattoo artists and running his own business separately from theirs).
That’s exactly what I thought and tried explaining to him. He doesn’t like ‘number talks’ and basically tunes me out. Now that this super affects me I need to really get him to listen. Maybe when we get our taxes done it will click. Here’s hoping.
I’m glad to know that all my reading of your posts has taught me something.
When he realizes his 50% is really 15.3% less (because he has to pay self-employment tax for all the freedoms he’s NOT enjoying), he’ll likely change his tune, lol.
Hi Tina, our owner takes out a product fee for every color service ($15,$30,$45….depending on service). You touched on that this is not legal. Could you give me some resources to look further into this?
Also, when she takes the product fee out she splits our commission, then takes it from our portion. Instead of taking it off the top, then splitting commission. Doing it her way takes an invisible about $100 extra from us that I feel my coworkers have no idea about. I’ve contacted her 1 time about this but don’t want to ruffle feathers. Any advice on our rights that may be being taken advantage of?
I recommend you read this article and this one. 🙂 I hope that helps!
Hey, I just found this wonderful blog today! I hope to god you’re still active! Haha!! I recently left a booth rent situation to open my own salon! The owner of the other salon was really cool with it until it came down to me actually leaving! We never had a written lease and I really only rented by the day because I was driving 2+ hours to take care of my guests! I got served with papers.. she wants back rent and she wants the “full time” booth rent price. When I left I notified her via text. She’s saying I gave her no notice and refused to pay her. With no written lease.. is this legal? I’m in OK! Thank you in advance!
She can serve you with “papers,” but it’s unlikely she’ll get anywhere near a court with that bullshit. Without a written agreement or some kind of proof to show you agreed to paying the full-time booth rent price (and with you having proof that you actually did give her notice), she’s going to have an impossible time getting anything from you. What papers were you served with? This sounds to me like a weak intimidation tactic with no basis in any actual plan to take legal action.
Hello Tina and thank you for your blog it’s the best by far. I have three questions. I have a booth rent salon and the problem I’m having is the stylist come in to work late all the time and as the owner I’m always making sure their clients are comfortable until their stylist arrive (I mean some time over 30 mins late) also some stylist uses there phone at there booth on speaker phone it is so unprofessional and rude to everyone in the salon ( I have a sign posted saying please silence your devices but the stylist break the rules )can I tell them they can’t do that .I am having problems with people wearing just anything to work like their going to go play in the park it looks really bad can I address that as well.Last I have told them in the being and it’s in their contract that they can not sell retail from their chair so go buy a product and retail it to their client.I ask them for a little list of the product they would like for their client to use and I will keep it stock in retail but they don’t.I really am getting tired of them being so unprofessional but I do not want to break any rules as a owner.Please help me I have a meeting coming up and need to address these things.
Because they’re in a common area, you can tell them not to use their phones on the salon floor (as long as the rule applies to clients, employees, and renters alike). You can’t dictate clothing since that’s an area the IRS clearly defines as an inappropriate degree of control. You do have the right to keep them from retailing since you maintain a boutique in the salon and that presents a conflict of interest, but you can’t do anything about it if they choose not to comply (except evict them).
It sounds to me like rental isn’t a good model for you. (Nobody can blame you. I’m a complete control freak and could never, ever be a rental salon owner for all the issues you’re having and then some. It’s a nightmare.) Unfortunately, if you want more control over behavior, you’ll have to employ them. 🙁
Thank you for your help it is so greatly appreciated,I guess I have decisions I have to make.
I thought as a booth renter it is my righr to retail my own product even if the owner sells their own retail???
It depends on your lease agreement. Generally, you can, but if the landlord prohibits it in the lease because it presents a conflict with their own business (for instance, if they’re running a retail department in the salon and don’t want any renters competing with that business), you can’t. The only thing a landlord definitely can NOT in regards to retail is impose quotas and performance requirements on renters. There’s no law stopping them from prohibiting renters from retailing as a term of their lease agreement. (Commercial landlords do the same by prohibiting their tenants from operating in direct competition with one another. That’s why it’s unlikely you’ll ever find two hair salons or two nail salons in the same strip. You may find a hair salon and a nail salon, but the landlord will likely prohibit the hair salon owner from offering nail services and the nail salon owner from offering hair services.)
Hello Tina,
I’m renter for the salon which managed by my friend, however the owner has fired her. After I hear the news I want to come to the salon to get my stuff back. But the owener refused under the excuse of the shop is process a lawsuit, and no one can take anything from the shop. Also she said everything right now in the shop belong to her, because while my friend managing her shop for her, she lost a lot of money and she need the stuffs to to cover her lost. Right now I don’t believe the shop in under a lawsuits, and she has took a picture of evey corner of the shop and taken to the police said everything in the shop belong to her. I need help to get my stuff back, I have got recipes to prove for two item and rest of them are from long time ago. Is there any how I can get my stuff back? Ps I don’t have a written contract as renter.
The lack of a written agreement is a serious problem and was a huge mistake I sincerely hope you won’t repeat in the future. Not having a solid agreement makes it very hard to support your claim about the equipment, but she likely doesn’t have the receipts either (since she didn’t buy any of the items). Try and retrieve the receipts the best you can by going to the websites and vendors you purchased from. For your more expensive items (like furniture) you should have an easy time getting copies. What she’s doing right now is theft, so call the police and tell them she’s trying to steal your items through conversion. Ask them to go with you to retrieve the items. If she wants to get them from you, she will have to take you to small claims court and try to explain to a judge why her loss caused by someone else is somehow your problem. Keep all emails, texts, and voice mails you get from her. Any communication is evidence now.
I am a salon owner of a very small salon, I have one employee and a receptionist/shampoo person. We added on another stylist since we were getting busier. She had a few clients that came with her but I have been alternating any new clients between the two of them. I brought on the new girl as an IC, she gets a 1099, she gets paid 55% commission per client, I provide all product, and she only cleans her station area. I have store hours posted and she is free to be scheduled any time within that. She leaves when her clients are done. My receptionist makes most appointments and cleans the salon and stays till closing. My issue is that my IC has not been following my rules in that I want my receptionist to handle all scheduling and checking out of clients. The only reason for this is when she started she would run for the phone and take some of my employees clients and try to schedule them for herself, or not alternate the new clients as was in the agreement when she was brought in. She has now started bringing her boyfriend to work with her on Saturday’s and he sits in the breakroom or sometimes walks around the salon area and is completely unprofessional. She is now making comments that since she is an IC that he can be there, and that I cannot “fire” her. Since it is my salon, and my insurance, I tend to think I can restrict who can and can’t hang out all day, plus I can’t “fire” her since she is not an employee but I can ask her to leave. Also, I keep a database of all clients and client cards of services done. She is making noise that she should have access to hers. Is that correct? And she is pushing me to give her a key to the salon and let her change her hours to work even when we are not there. I give her 5 days a week 8 hours a day to schedule within whatever she chooses. I don’t trust her to be left alone with all of the client information and cash. There were a few questionable “transactions” when she was checking out her customers that I think she was skimming off by charging less for the service in exchange for a “bigger” cash tip. Which is why I don’t want her checking out clients. She does not like to play by my rules. What can I do here?
Did you read the entirety of this article? Most of your questions are answered in it. It sounds to me like you want a lot more control than you are legally entitled to have from an independent contractor, so you would be far better off employing her. You should also read this post about the IC status and why it puts you at a serious legal disadvantage. It’s definitely not an appropriate classification to be using.
I did read your article. Nowhere in it was what to do with an IC who wants to babysit her boyfriend while at work. And I don’t think I am trying to control her by asking her not to bring him. Having him there makes us look unprofessional. And I don’t see how I am controlling her by asking her to not answer the phones when she was stealing clients! How was it fair to my employee if I allow it? And how is it fair to the salon if she is checking out her clients at a lower rate and pocketing the big tip. To me that is the equivalent to stealing. How can I continue to pay the overhead if she is ripping me off too? Also, you can employ as many as you want and fire them whenever you want, but I have owned other businesses and I have played the unemployment game. You can fire anyone for whatever you want but you have to prove it to the state unemployment officials when they go to file. If you don’t have at least 3 write ups and a valid reason of why they are incompetent then you get slapped with them getting unemployment and your rate goes through the roof. I have gone to several unemployment hearings with tons of paperwork, and rescheduled hearings when the former employee didn’t show, the employer is treated like a criminal for firing someone. I have done this. I have wasted alot of time on that. I’m sorry if you are totally against using an IC status, but I give my IC tons of freedom. And I play by the rules of the IRS for what she does. Having employees is no cake walk either. You think it was ok for her to steal clients and pocket money and I’m the bad guy because she was brought on as an IC?
You’re not a “bad guy” for bringing her in as an IC. All I’m saying is that the level of control you’re looking for (with regards to her pricing, taking control of her transactions, paying her a percentage of sales, paying for her overhead, etc.) is more than you’re legally entitled to. I AM “against” using the IC status but only because it puts YOU, the salon owner, in a legally questionable position that ALWAYS ends with owners like YOU being punished by the IRS and DOL and state labor authorities, and I like for that NOT to happen to anyone, which is why I’m here, writing this blog and supplying you with these responses. As someone who routinely assists salon owners through these audits and investigations, I’m extremely familiar with the process and speak from a position of experience when I highly advise against utilizing it. I also speak from experience when I say that you do not sound like you’re playing by the IRS’s rules, and this is why:
“she gets paid 55% commission per client” (Not in accordance with IRS guidelines for self-employed workers.)
“I provide all product” (Not in accordance with IRS guidelines for self-employed workers.)
“My receptionist makes most appointments” (Not in accordance with IRS guidelines for self-employed workers.)
“My issue is that my IC has not been following my rules in that I want my receptionist to handle all scheduling and checking out of clients.” (Not in accordance with IRS guidelines for self-employed workers.)
“I keep a database of all clients and client cards of services done. She is making noise that she should have access to hers.” (Not in accordance with IRS guidelines for self-employed workers.)
“There were a few questionable “transactions” when she was checking out her customers that I think she was skimming off by charging less for the service in exchange for a “bigger” cash tip.” (Not in accordance with IRS guidelines for self-employed workers.)
“I don’t want her checking out clients.” (Not in accordance with IRS guidelines for self-employed workers.)
“She does not like to play by my rules.” (Not in accordance with IRS guidelines for self-employed workers.)
For unemployment purposes, I always recommend utilizing a progressive disciplinary policy with employees to completely avoid issues with unemployment when a terminated employee attempts to make a claim. Do that, and you’ll never be treated like a criminal. In all my years in this industry, I’ve had two people file for unemployment and all that I was required to do was take a phone call, email some scanned forms to the unemployment office proving they were fired for just cause, and that was it. Each state handles it differently, but if you consult with an employee defense attorney and have them draft up your employee handbooks, structure your progressive discipline policy, and advise you on how you can avoid legal trouble with regards to your workers, you’ll be covered.
If you want the IC to stay away from your receptionist and your salon’s clients, make her a proper renter. Put her on a lease, have her pay a flat rate to you every week or month, and clarify her role in the lease agreement. She’s not entitled to walk-ins or clients who call. She’s not entitled to the services of the receptionist you are paying for. She’s not entitled to the supplies you’re providing her with. She can’t have it both ways. If she wants freedom, give her that freedom, but that means you’re not her benefactor anymore. She is self-employed, and based on what I’m reading, you’re both expecting more than you’re entitled to from each other.
Also, as a side note, I am not an avid Facebook person, and she knows this. She did post something on there that was brought to my attention, her post was something to the tune of saying her 1099 status was hard for her, and if she could find another wonderful stylist that was willing to go with her, she would like to open her own place. This leads me to believe that as soon as she can manage it, she would take her clients and go.
Unfortunately, she legally can. She’s self-employed, her clients belong to her. Since you’re not paying employment taxes for her, you have no control over her and you can’t set rules for her to play by. I highly advise reading both this post and the one I linked in the last comment before you consider using this classification in the future. It’s extremely disadvantageous to do so.
Hi Tina, I have been working at my current salon for 2 years now and a week ago all the commission stylists got informed by the owners that were going to be 1099 since they’re getting hit on taxes. One of the reasons why they’re doing this…a co-worker accidentally cut a client’s ear two weeks ago and it cost the client $1,200 to be stitched up. Originally they said that the liability insurance will take care of the everything, but since it’s costing them, they are asking my co-worker to cover half of the deductible and the medical cost. My question to you is if I’m a 1099, do I have to get my own insurance if an incident like this happens to me? Thank you so much!
I already replied to this comment in the 20 Factor post (so check that if you haven’t already), but I had another thought. Ask your coworker to insist they provide proof of the bill before she pay anything. In that other incident I mentioned in the other comment, the owner provided me with a copy of the clients’ ER bill for my records (and to verify the amount).
I have a question regarding laws surrounding cosmetology licensing, in the state of Tennessee and I am hoping for any help!
I am working for a new Spa that is about to open. The owner has not gotten a shop license through the state. Am I personally at risk to be fined if the shop I am working at is not licensed through the state but I currently am.
Any help in this is so appreciated! I am having a hard time finding any answers.
Thank you
You’ll want to call the state board to learn how they handle fines in that situation, however, I recommend not risking it to begin with. If she doesn’t have a shop license, she has no right to operate. For me, that’s poor business management and I wouldn’t want anything to do with it until she had that handled.
Hi I am an Esthetician who rents out a space in my salon. I recently saw a ad post from the owner wanting another Esthetician the days I am not there. She did not tell me about this and everything in the room is mine but the towel cabi, bed, micro machine (which I pay for use). Any advice appreciated
Do you have a written lease clarifying the terms of the agreement? Without one, it’s hard to do anything about it. I’d sit with her and remind her that you’re renting that room so you can utilize it whenever you choose. If she’s going to rent it out, the arrangement (and the rent) will have to be renegotiated so you aren’t paying for a week of rent when you aren’t in the room, and you’ll need to bring in a locking cabinet to secure your tools and supplies. I’d also make it a point to let her know that I wasn’t happy with her lack of communication regarding this decision and that it was really inappropriate of her to try to lease the space you are already renting to someone else without consulting with you first.
Hi Tina! Your website is so cool!!! Thanks for all the help!!! I have a question for you. We rent stations in a salon in California, two girls got fines of $100 each and the salon got one for $500 because of this girls fines(others renters got fines in the past that’s why I assume they have to pay that much) well, one of them offered to take walk ins to raise the $500 so the owners won’t have to pay, now they said that they are going to make us pay any future fines that the salon will receive (plus of course our own fine) and they want us to sign a document where we agree and if you don’t sign, then you have to leave. Is this legal? I thought that was a salon obligation to pay no for our personal fines but the ones they get when renters get fined. Please let me understand who’s right. Thank you so much.
Thanks! 🙂
Actually, based on this statute (click here) and this statute (click here), it appears that the Board–not the salon owner–decides who is responsible for the fines. It doesn’t seem as if the establishment has the right to force anyone to pay the fees assessed to them by the Board. You may want to print those out and bring them to their attention before they do something illegal.
I work part-time as a receptionist at a franchise beauty salon. Since I am an employee, I receive a check. I do not cut hair. I have recently decided that I want to work for myself and recently attended a Bridal Faire where I
had a booth to promote my hair styling techniques for those attending. I was told by one of my bosses at work that it could be a conflict of interest. How could that be when I am not a hair stylist there? I signed a contract that only forbid me to work at another salon while I am working with them. Nothing was said regarding my doing hair as a free lance during my time off to make extra money. Is this a conflict of interest on my part?
Well, I’m not a lawyer so I can’t advise you on this, however, I would consider the argument that you are personally acting as the competitor in this scenario to be valid. If the salon were to promote you to a stylist position so you could promote their brand instead of your own, would you consider that an acceptable alternative to working for yourself? If not, you may have to cut ties completely. You could consult with an attorney on this and attempt to keep your position and work independently, but it may not be worth the time or expense to pursue. :/
Thank you for your response.
When looking to do a booth rental or be an independent contractor at a salon am I required to give them my resume & fill out their employment application?
LOL! No. You wouldn’t be an employee, so neither of those items are appropriate. I would consider it reasonable for them to ask for professional references, but anything beyond that is unnecessary.
That is what I thought. Odd theybaskednfor me to come in and fill out an application & bring along my resume. Thank you.
That is odd, and likely an indication that the owner has a false assumption about what their role is as a landlord (many do, so it’s not abnormal to see this kind of weirdness from time to time). However, it’s not your job to teach them how to run their business. I would say something to them about it, but I’m physically incapable of watching people do things the wrong way, lol. Don’t feel similarly obligated.
I work in a full service salon in California, we just got a new owner for our establishment, he is saying that we are REQUIRED to pay our booth rental in all cash. Is that legal? We have always had the option of paying cash or check, the only time cash was required was if we bounced too many checks..
The only laws I found pertaining to this had to do with residential lease arrangements. (You can read the law here.) However, I personally don’t see a problem with it as long as you’re keeping records of the transactions and making the delivery of the cash payment contingent upon the owner providing you with a receipt for the payment immediately. For a solid answer on whether or not it’s legal, you’ll have to call an attorney who specializes in commercial landlord/tenant law. I can’t find anything that outright prohibits it.
G’day, forgive me if this question has been covered but I couldn’t find it. I own a Barbershop with 5 barber chairs. I have a small separate room within my leased space that would be perfect to a a single-chair tattoo artist in. My landlords are saying they won’t allow it. My lease has no restrictions to the ammenities or services I can offer. They are stating that I require their consent for any services I add that are not considered “barbering”. I already legally sell cigars out of a giant old safe vault, and they have never challenged me on this. Are there any court cases or precidents that you are aware of where a Barbershop has tried to do something similar and run across this obstacle?
I’ve never heard of this happening before, but I’d be shocked if there weren’t some kind of precedent for it (outside of the salon industry). However, you’re better off speaking with an attorney and having them review your lease and give you insight regarding any state or local laws that may apply to the situation. Generally, if the requirement isn’t in the lease, it’s likely not enforceable. Typically, people can’t just randomly make up their own rules when it suits them after an agreement has been signed without renegotiating that document.
Hi Tina!
Sorry if someone has already made this question before.. couldn’t go over on all comments.
I rent two rooms (that I already renovated and decorated) as an master esthetician in a hair salon.
I have on both rooms expensive equipments and products.
The salon owner wants me to give her my room’s keys as an excuse if she need to open them for an inspection or something but she is using my rooms to storage the salon chairs and stuff for her Zumba classes that she holds on Sundays.
Also all her clients and family visitors kids come inside my rooms to sneak in.
Is it legal the right for her to have my keys copies? if it is so, how can I prevent myself Of not letting this happen legally?
Thank you so much!
For this, you’ll have to refer to your lease agreement. (It’s unlikely to be covered by any laws. Most commercial landlord tenant law falls under contract law, which means you refer to the contract.) If I were you, I’d hire an attorney and insist on a renegotiation of the lease that either prohibits her from using your unit herself when you aren’t present, or explicitly holds her responsible for any theft or damage that may occur during the times she has left your room unsecured and your property vulnerable to strangers. That’s not appropriate. I wouldn’t tolerate it whatsoever.
I have really enjoyed ur site! I’m so glad u have provided all this to read and understand. I’ve tried to find if someone asked this but read so many comments and gave up lol. Here it goes…
Im a booth rental salon owner in TN and got a lot of insight as to laws from ur site but am still wondering a couple things. As a salon owner can I ask my stylists to help keep the shop clean? They use the bathroom, the sinks, the break room, the waiting area.. Is it wrong to ask for some help with it all. I also provide towels and basic backbar items (shampoo, conditioner, wax). I use to charge $90 a week, but had to raise it to $100 a week cause expenses went up. (That was a blast! Several stylists were not happy and I realized u keep friendship and business seperate!) Thanks so much again!
Alright, so the first thing you need to learn how to do (and I tell this to ALL booth rental salon owners) is that you shouldn’t refer to anyone who isn’t gainfully employed by you as “your” stylists, employees, staff, etc. Make it a habit to clearly separate yourself and your business from them.
You can ask them, but you generally can’t require them to do anything. (Think of it this way–it’s like your landlord for your building requiring you to pick up the trash in the parking lot because you and your employees use it.) Instead, hire a cleaning company to come in once a week and account for that cost in your rental prices. This keeps you out of trouble and makes it so they don’t have to deal with the menial janitorial work.
As for the products, stop providing them with things they aren’t entitled to. If they want to be self-employed, they need to accept the costs of doing business like every other business owner. That stuff isn’t your responsibility and it puts you in a slightly questionable legal gray area.
Comment:
Hi Tina,
I happened to come across your site and am hoping you can help me as I have had 0 success on a State level, franchise level or former employer level.
I worked as an employee for a franchise salon in the State of Illinois and am merely trying to obtain my total number of hours worked to obtain my Wisconsin license. My former employer refuses to submit my hours to Wisconsin.
My question is… Is an Illinois Salon owner/ employer required to preserve and make available a cosmetologist/employees hours to them upon request?
Hi Lisa! In Illinois, employers with four or more employees or covered by a wage order must keep a record of the wages and hours of each employee for three years. The Personnel Records Review Act also requires employers to give an employee access to their personnel records upon request (and allow the employee to make copies of those records). The full statute can be found here, but you’ll have to talk to an attorney or IL state official about whether or not it’s something you can pursue.
In my opinion, if they have those hours, they have no valid reason not to provide them to Wisconsin’s state board so you can obtain your license through reciprocity. My recommendation to you, since you’ve attempted to deal with everyone involved, is to contact an attorney who can send a letter to the franchise letter, corporate, or both, compelling them to remit the records they have and clarifying your intent to alert media and/or pursue legal action against the company for attempting to hinder or restrict your ability to earn a living. In the meantime, if you have any records of your own (pay stubs, W-2s, etc.), tell the board your situation and ask if they’ll accept that.
Honestly, the letter from the attorney should get it done. They’re likely hoping you just disappear. Make it clear that you won’t.
I work at a commission based salon and am still getting paid min wage. I asked my boss for monthly reports since I’ve been there to see what I’ve done and she had every reason not to give them to me. Do I have any rights to see my past numbers? Just want to see what I’ve done monthly in services and retail.
I had to take several deep breaths before replying to this comment because these refusals to provide records is typical of exploitative salon owners who are skimming money or intentionally under-reporting sales to evade taxes. You should read this post, this one, and this one.
I’m pretty sure the posts go into detail about it, but I highly recommend tracking your hours and sales yourself. You can do this however you like, but I’ve also developed a spreadsheet to make it really easy.
I don’t see on the IRS website where the owner isn’t required to provide a key to the business. Can you point me to the particular statute that changed with that?
Hey Lynz! I can’t find any record of the regulation, but it was one of the factors considered when determining whether or not a so-called “self-employed” person had sufficient autonomy. Now, they no longer consider that a factor so long as the worker has free access to the building during stated operating hours and can schedule themselves as they please. (I know on a state level, the few that had industry-specific determination factors, like California, did also consider keyholding to be a factor, but again, that changed several years ago.)
Questions. I was at a salon in 2016 in Indiana. The salon hied me on “commission” at 40%. (I never made an hourly wage. I was also asked, and there was a list generated, to clean and wash/dry/fold towels.)However I have to puchase all of my products. In addition, they started taking out $10 at the first of every month for coffee, in the lobby for customers, out of my “commission” check. We were told we had we had to sell products for a 10% commission but only after we sold $60.
I am currently trying to get my tax info together. I received a 1099 from them showing my earnings but nothing showing the 40% paid to them or for the $10/month coffee expense. I need to talk to someone because I feel like people, including myself, were treated unfair and that my tax info may be messed up. Please help!
I’m happy to help, but you need to find an attorney and/or a tax professional for legal and tax guidance. (I’m not qualified to do either of those things.) It sounds to me as if you were misclassified, but without knowing more, it’s impossible to tell. Here’s an article I wrote that might help you figure out whether or not that’s the case. At the very least, you should consider contacting your state labor authority.
I worked for a franchised spa in FL classified as an “Independent Contractor”, however we were commission based. We had set schedules and were expected to be there even if we didn’t have clients, a dress code to adhere to, and they provided supplies (sheets, towels, cream, etc.). If you were to take time off you were required to get permission from the owner and find someone to cover your shift, you even needed permission to leave early or call out sick. We were paid 40%-50% commission and the owner also took an additional $15 fee out of every check to cover the owners cost for laundry and the use of the credit card machine, it doesn’t matter if you work 6 days a week or two everyone still has the same $15 taken out of their check. We never recieved reports of our services and were to keep track of it ourselves or just trust our check (I personally kept spread sheets of every day I worked because I’ve had several checks that were incorrect). You had little to no control over your schedule and were lucky if you were able to take a break. They would schedule you for modalities that you explicitly stated that you did not do and were expected to just do them. Some therapists have been there for years as long term “employees” and for a lot of others it’s their only job and they’re financially dependent on working there. When they switched to a new booking system you were not able to check your tips, then it was only your cash tips you couldn’t check and they didn’t let the front desk tell you. They did not give anyone a copy of their signed contract that their also obligated to do, as all parties are to have a copy. It’s obvious that they are misclassifying their “employees” and abusing their power. If you question anything you’re let go and they just replace you. What are my options on reporting them and getting restitution?
Your options are to file an SS-8 with the IRS, file a complaint with the Department of Labor, or hire an employee rights attorney and attempt to settle the matter privately.
Do I file just against the franchise owners LLC, or against them and the entire franchise since it’s the same business model?
That’s a complicated question. There were rulings that held franchisors responsible for the actions of their franchisees, but I believe you’d file against the individual franchise owner. I’m not positive on that though, so talk to an attorney or someone at the labor department or IRS for clarification.
My wife has rented a chair at a salon for about 10 years. In exchange for her rent, she has always receptioned for the owner for about 20 hours a week. All of the other receptionists are paid hourly employees, but she pays my wife nothing and just considers it a swap. After reading this, it seems to me my wife is getting screwed in this deal. She does not get a W2 for the money she is earning which means no taxes have been withheld and no social security is being withheld. My tax guy says he believes this is being done improperly and there should be a W2 for this. Is this true? My wife does claim this income under her self employment income (which it is not part of). Have we been paying more taxes on that income that is not reported properly that the salon owner is supposed to be paying into? This owner is a real dirtbag and I’ve had a feeling she’s been screwing my wife over with this deal since the beginning.
While I’m not a tax guy, I agree with yours. Income from bartering must be reported and taxed appropriately. (I’m not sure how that works since I don’t deal in trades with anyone, but your tax professional may know.) Your wife should likely be a properly classified employee in that situation because the tax rate she’s paying is double what would be appropriate in an appropriate arrangement. If I were her, I wouldn’t have agreed to it. At best, it puts them in a scary gray area.
Hi Tina, a co-worker and i are about to start booth renting and are trying to finalize contract outlines and details. i am curious as to how much control over my hours the owner has. In coming up with a rental fee she has thrown around $50/day $75 thurs-sat (as they’re busier). if we end up paying a daily rate should we be expected to pay daily, and therefore only pay for whatever days we work and not a set # of days per week/month? Also we are currently employees and there are 3 other renters there, does the rate have to be the same for everyone? 1 renter works only 1 day/week. another 1 evening and one morning. they pay the same rate, $200/month (or in my owners eyes $50/day). and another stylist works 3-4 days per week and pays $400/month. We would be working 3 or 4 days also but she is “quoting” us higher than all those girls, and we’ve been employees and supported her for 3 and 4 years now. mind you nothing is finalized yet we have just talked about it. i’m trying to put something together in writing to give to her for us to agree upon. and of course will agree to and sign a contract before actually becoming a renter, but just want to make sure of these couple things before i do so. also the renters currently follow a dress code, but from reading your articles i see that is not legal. can she decide not to rent to us if we don’t want to follow those kind of guidelines? We are in Connecticut. thanks again for all the useful knowledge you share with all of us!
Well, as the article states, she has no control over your hours. She can set facility hours (hours the salon will be open in which you can conduct business), but she can’t set your schedule.
When it comes to rental rates and terms, she can set whatever prices she likes and whatever terms she likes–she just can’t change them arbitrarily. (This is why a written lease is critical. Make sure it doesn’t contain any clauses that allow her to basically change the agreement terms whenever she feels like it.) The rate doesn’t have to be the same for everyone. Often, renters within the same complex pay vastly different rental rates for a variety of reasons.
For example, if you begin renting in 2015 and you signed a 2-year lease that locks your rent in at $400 a month, that’s your rate for that term. Let’s say your friend comes to rent, but the landlord presents her with a rate of $550 a month for a one-year lease. During the term of your lease, she has increased the rental rate for new tenants. (Totally normal.) She may also have increased the rent rate to make up for the shorter commitment, and/or because the square footage or amenities she’s offering the new tenant are different than what you have. Just as your business isn’t any of her business, the details of how she conducts her business with other tenants really isn’t any of yours.
She can also decide not to rent to you for any reason she chooses. If you decline to agree to certain terms (like the dress standards), she can decline to offer you an agreement. If you’re in an open air salon (with no walls separating your workspaces), she has to be really careful about who she rents to, since the behaviors and actions of the renters could negatively impact the businesses of her tenants. (No landlord wants to lose renters, so it’s typical to see these kinds of “common area” terms in leases–even though I consider them to be unacceptable, I understand why landlords feel the need to implement them.)
I hope that helps! 🙂
As a booth renter can my salon owner dictate when her business is open?
For example:
She’s trying to enforce a 9-5 operating hours, is this legal?
The salon owner can (and typically will) dictate what are called “facility hours.” These are hours in which you are free to conduct business within the facility. They cannot dictate your operating hours (the hours you work), but they can set times the facility will be open for you and restrict you from working outside those hours. These hours, however, should be outlined in your lease and shouldn’t be changed arbitrarily.
Hi there, I’ve been employed through contract work for about a year now. I’m doing very well for myself but I wasn’t getting enough hours to pay rent and get full time wages. I decided to apply at an establishment that is a spa. I have been working there for a number of months part-time as an esthetician. My job I had first which is the contract work knows about my other job is fine. Just recently I told my second job about the first and that didn’t go over so well. They are telling me I need to be in on weekends for them no excuses. I can’t just leave my first job for them. Is this legal to work at both jobs without being fired?
Well, if you’re employed by the spa, they have the right to dictate the terms of your employment. (If you’re considered an “independent contractor” at the spa, that complicates things.) Generally though, employers do have the right to fire anyone at any time for any reason (so long as that reason isn’t discriminatory).
Tina first and foremost THANK YOU for this site!! My eyes grow hazy and my butt numb searching ;)! My question is a difficult one to find an answer to. I am a chair renter in Wisconsin and have been at this salon for four years. There are a couple other renters as well as employees and we all work in the same area without walls.
The landlord recently put a camera in the salon that she controls thru her iPad or computer. When I first asked her about it she informed me it was only there to help reduce her insurance and because she wanted another renter to see it so she would start doing more cleaning.
I recently learned that she does check in at times, but she does not have it set to record. I asked if she was able to hear our conversations and only if she uses a computer and turns it on.
I am very upset by this because I feel my privacy and my clients privacy is being invaded. I have only been able to find laws on employees, do you have any ideas?
I certainly want to make sure I have the correct information!
Thank you so much for your help and a quick response would be SO APPRECIATED!!!
Thank you again for this wonderful forum!
Oddly enough, I actually have a post about security cameras here and another one about wiretapping here.
It depends on your state, but generally, recording or listening in on conversations without the knowledge and consent of ALL parties isn’t legal. (Some states have one-party consent, though, so check your laws.)
Help. I am an aesthetician working in a plastic surgeons office. Independent contractor 60/40 split in his favor. Now he wants 7% for shop costs. Okay fine. An I deduct that on my taxes?
The arrangement isn’t appropriate, or at all in your favor. The 60/40 split isn’t acceptable. He needs to set a flat rate for the rent and stay out of your business affairs entirely. You shouldn’t be reporting your sales to him at all, nor should he be supplying you with anything and charging you an arbitrary percentage to cover those costs.
Right now, you’re a so-called “independent contractor.” That means you must pay 15.3% of your income in self-employment taxes, plus any applicable state income taxes. Your 40% is actually 24.7% (assuming you don’t have any state employment taxes). He wants to deduct another 7% for “shop costs?” That drops your income to 17.7%. At that rate, what incentive do you have to remain self-employed?
I’m sorry, but if you were a consulting client of mine, I’d be highly against this arrangement. You’re being taken advantage of.
I pay full time rent at a salon that is open 7 days a week. Can the owner use my station when I’m not there? Someone told me no that it’s against the law to double profit. But I can’t find the law anywhere here in California.
There’s likely not a law regarding that specifically, but if your lease prohibits her from doing so, it could be considered a breach of contract. I recommend speaking to an attorney in California to advise you on your specific circumstances.
Hi Tina.
My daughter works in a salon she has been there for 8 months but still has no contract! Is this right? . Also she works at 8 hr day but if she only has 3 clients that’s all the employer will pay her for. Is this right? Also gets sent home if not enough work without pay. Is this right? Was verbally told she had a 20hr contract but still has no contract. Hope to hear from you soon thank you.
Typically, a verbal contract is formed when a worker accepts an employment arrangement with an employer, so the written version isn’t necessary (but it’s certainly preferred). The employer is required to compensate her at least the prevailing minimum wage, so if her commission for those three clients during that eight hour day exceeds the prevailing wage, it’s okay, but if it doesn’t equal or exceed what she would have made at the prevailing wage, it may be considered wage theft. You can read more about wage theft here and by searching the site for the terms “wage theft.”
I am new to this, I was hired at a salon and the agreement we had was commission vs hourly, whatever was better. My 2 days I was fairly busy. The salon owner told me I’d make more if I went to strictly commission and the commission is 50/50 so of course I said okay. Well now 2 weeks in and I haven’t got a check over $70 and I work 3 days a week 8-9 hours. I answer phones, clean, do towels. She has me come in an hour before we open to “answers phones” and get the salon open. 1. Is this legal? 2. How do I go about requesting to go back to hourly vs commission. I have another job lined up if she doesn’t agree to this, I just feel like I’m being completely taken advantage of. Also we get paid once a week. There are 3 of us on commission. The Salon has 5 booth renters, the 3 of us on commission have to rotate walk ins. I feel that I’m not making any money for the time I spend there. I know it takes time and patience to build a clientele but I feel completely taken advantage of. I just don’t know what my next step should be.
Well, it’s not your job to build a clientele if you aren’t a renter. The owner shouldn’t have hired you if she didn’t have the business to provide you with a livable income. Obviously, she doesn’t, which is why she wanted to move you to commission only.
As stated in the post, commission-only isn’t legal compensation for employees unless the owner guarantees you the prevailing minimum wage. (The hourly vs commission structure is the proper way to do it, but I suspect your employer realized she couldn’t justify hiring you to begin with.)
If your employer isn’t meeting the prevailing wage obligation (which she isn’t), you may have grounds to file a wage claim, since underpayment of wages generally constitutes wage theft.
If you need help figuring out what to say, you should read this post.
Hi, I recently talked to the owner after I saw this post about my taxes.
She told me last year when I started that I’m going to be an independent contractor so therefore I’m paying 15% tax, and a 1099.
Which is why I started researching because she told me 15%, and I found out it’s actually about 30%, including the self employment tax.
But I signed an employment application and also a contract including a non compete agreement for an employee. The contract has the term “employee” ALL over it.
Anyways. She told me I had to be at the salon at 9am, stay as long as possible, I didn’t get vacation time the first year, and I’m on 50% commission, nothing more besides tips. Some weeks I made close to nothing, because they provide me with clients and I have no control over the schedule. I do not have the key to the salon, code to the computer, or access to my clients info without asking someone to open the system and type in the password. (They watch me while I’m typing in the info)
When i decided to have “the talk” I approached her with the attitude that maybe she didn’t know what she was doing, she told me it’s a complete surprise to her and she had no idea. Which is a lie because I talked to a girl who used to work there before me and she quit over the same issues. But she said that she was always wondering why I would stay until so late and assumed that I wanted to. She said they never forced me to not take vacation time, and never forced me to stay until late. That she assumed it was my choice and it always was.
I’m assuming she said that because she thinks I don’t have proof to get her in trouble. I told her it’s illegal and she’s lying to herself by saying that, all of my clients and their past employees could probably be a witness, because, well, I’m telling the truth and she is not. She then offered to pay for half of the self employment tax, for the misunderstanding; but kept saying she had no idea and it’s always been done that way in the salon business. Now she is avoiding me when I ask her about the payment.
My question is, can an independent contractor be paid by commission? She also told me the salon owns the clients and she will not give me ANY of their info unless I booth rent. Ever since I had this talk with her I’ve had a huge decrease in the amount of clients I get per week, and she even said to me “did you notice as soon as you said you’re gonna booth rent you stopped getting calls? Maybe it’s God telling you something”.
I know some of my clients will follow me, but I wanted to know if I should just let it go and start over again, or if I have the right to my clients information.
Wow. She sounds like an asshole, and I agree with you, her behaviors seem intentionally exploitative. If I were you, I’d file a Form SS-8 with the IRS. I’d tell her, “I tried to work this out with you, but clearly you still seem misinformed and intend to continue intentionally misclassifying your workers. So, I’ve sent a request for determination of employment status. We’ll let the IRS and the Department of Labor straighten all this out.”
Do you still have the employment application and contract? If so, hold on to those. You’ll need them.
None of this seems like an appropriate use of the classification to me. You can read more about it here, here, here, and here.
I found out that the contract had the term employee all over it when I asked her for a copy, so I can read all of it and get “ready to booth rent”. I’m glad I did. I think it’s going to come in handy if she tries to make a big deal, but with the way she is she’s probably going to pay me to make me shut up and keep doing the same thing. I’m going to see what I can do with the help of DOL and IRS. Thank you so much for this blog it’s so helpful!
You’re welcome! Good luck! 🙂
Hello I have been doing some serious research since I started working at a new salon and the owner and her business partner keep referring to us as independent contractors but we work on commission, follow set hours and only use the products provided from the salon and follow dress code guidelines. So my question is, is this legal, what rights do I have and how can I get more information?
It’s very likely not legal. You can visit the Resources page for links to IRS and Department of Labor sites that can help you, but you should also read this post and the other two linked in this particular article.
ok i just started a new job in a Body sculpting center performing ultrasonics,laser lipo and thermalifting. I have only been here for a few weeks and have not received any paperwork. i will be working as a private contractor but i have been getting an hourly. STILL have not filled out a 1099 so im off the record still. BUT i was talking to my boss and asked how she felt about me doing my eye lash extension clients in her space as well as a few other services. I dont pay rent but was hired to perform body sculpting treatments with an hourly and opportunites to sell packages to make more money. i dont know how to go about starting my services there since i will be buying most of the product what should i ask for in commision? since im not paying rent i obviously cant just do my business there for free. But we want to work together to bring eachother more business. i will still be performing body sculpting treatments as well.
Your situation doesn’t appear to be an appropriate use of the independent contractor classification for several reasons. The owner should be employing you as an actual employee. You should not be getting commission at all–you should be paying rent and managing your own operations entirely. You should read this post and this post for more information.
I work in Virginia at a Salon as an employee. I missed a day of work helping my brother get medical attention. My boss says is reducing my commission when I come back to work. Is that legal?
If your employer is required to comply with the Family Medical Leave Act (or any state-level acts that are similar), it may be considered discriminatory and retaliatory on those grounds, but you’ll need to speak with a local employee rights attorney about your specific issue.
I work at a nail salon and I’m taxed as an independent contractor and I make 60% of my commission. Even though they get 40% of my commission they still charge me for some supplies like gloves even though that’s a thing that everyone uses. They supply me with some tools but they take the money for them out of my check so I pay for them and if I sell any products I don’t get any percentage of what I sell. I’m 18 and I’ve never worked at any other salon but I know people who do and they say they shouldn’t do these things. Should I pay to supply things myself and provide all my own tools when they get a percentage of my commission and I am taxed as an independent contractor? What should I do?
It doesn’t at all sound like you’re properly classified. I recommend reading this post and this post.
This site is awesome. Thanks for sharing all of your information. I have a question as a business owner that I am struggling with. First I am in the state of CT if that helps. I am a small beauty business specializing in eyelash extensions. I’m adding permanent cosmetics to my business. I have found 2 artist to start this new phase, however as the owner and as them employees I am making an investment with products, sets ups, training, etc. My frustration in the past is going out of my way to buy things for new employees to start them with everything they need and then they bail or don’t really take the job seriously, leaving me in a hole of dept and unused products. I have non-competes to not set up shop or take my clients within 6 months of termination, but what about contracting them to stay at least for a certain time and put the hours in to pursue their career before I keep investing? Thank you for you help.
That may be considered indentured servitude (you can read about that here and learn about alternatives to those kinds of arrangements that ensure you get compensated for the training instead of providing it for free). You should also read this post regarding non-compete agreements (because those documents really aren’t the best ones for your needs–more effective alternatives are outlined in that post).
Investing in your employees goes with the territory when you’re a salon owner, but as an employer, you should be expecting potential hires who apply to have the skills required to perform the job they’re applying for. I’m not sure why people in our industry think it’s okay to apply for a specialized job with the ridiculous expectation that the owner train them to perform those specialized, transferrable skills, but as owners, we need to stop enabling that bullshit. Either they’re qualified to perform the job and they get the position, or they aren’t and they get offered the opportunity to pay us for that training and maybe be considered for employment.
As an alternative, you can require them to seek outside training and certifications before you consider them for employment and offer them tuition reimbursement after a year of employment, but again, that’s totally up to you. It’s not our job to pay workers for specialized training they should already have obtained prior to applying for the position.
Can the salon I work at sue me for doing services at home if they do not offer the service in the salon, and we are not allowed to do the service in the salon?
If you signed a contract prohibiting you from performing services outside of the salon, they can sue you for a breach of that contract. Otherwise, it’s not likely.
Hello,
I have a question I am a barber in CA and a booth renter. The landlord has set up a work schedule on when he wants me there days/ hours is this okay for him to set in our lease agreement? I advised him that I would be taking a few days off knowing I’m still required to pay my rent and he said I need to find someone to cover me before I leave? I’m not sure all these rules are acceptable given I am a booth renter but I basically fill that if I don’t abide by his rules he will make me leave my space. Can you please advise on what I should do next an if I should get a lawyer an what kind of lawyer?
No. That’s not acceptable, particularly in California (which has stricter rules regarding self-employment and treatment of renters than anywhere else in the country). A lawyer likely won’t want to help you or won’t be able to (litigation is expensive and unless it’s worth it to you to spend at least $5,000 fighting this, they won’t touch it). You’re better off going to the EDD and speaking with them about your options.
Hi Tina,
I just came across this article as I was googling information on whether or not independent contractors and booth rentals are the same thing from a legal standpoint, and if being an independent contractor is illegal in New Jersey (where I work) because I know that booth rental is. I just graduated from beauty school and took my first job last week so I don’t have any other experience other than what I learned in school to base my experience on thus far. But I will say this, I think something is really wrong with the way my “boss” runs her business. She hired me knowing I didn’t have much experience other than working on clients that came for services at school, and she said that in the beginning while I grow my clientele my primary job will be answering the phone and scheduling appointments. She told me that I need to create an LLC, and that while I’m essentially being the receptionist she’s going to pay me $15 an hour plus 20% commission on services. Once I am regularly booked up, she’ll drop the hourly wage and pay me 50% commission on services and 20% on product sales. She tells me when to work and for how long, and she mentioned a uniform but I have’n’t actually gotten one yet. In addition to being front desk girl, she has me posting on the Instagram account, I redid the intake form (in my free time), and she wants me to create “marketing strategies” for her business. I started working a week ago, and she hasn’t mentioned any sort of contract, 1099 or W-2 form. She told me that she would pay me in cash until I get my LLC, which I haven’t done yet because I’m most likely going to quit. I can’t seem to find any information on whether or not being an independent contractor as an esthetician in New Jersey is illegal. Regardless, it’s obviously a very shady situation. I would really appreciate any sort of insight or advice you have for me. Mainly, I want to be armed with as much information as I can so that when I quit I’ll have a loaded explanation for doing so.
Yeah, that’s not a proper use of the IC status. You’re clearly an employee and need to be classified appropriately. You should NOT be getting paid in cash. If you’re going to quit, I recommend doing so sooner rather than later. This post provides more information on why you’re not classified correctly, as does this one. That should be more than enough information to arm yourself with when you have that conversation.
Hi I really enjoyed reading this article, so far you’ve answered a lot of my questions. I’ll start by saying I am self employed, I’ve been running my business out of a cool little salon in South Tampa Florida since September 2016. I rent out a room, I have a written lease agreement for one year with the salon owner, I pay weekly by check and everything else is up to me. I get my products, I pay for marketing, tools literally everything from beginning to end. The issue is the salon owner called me this Friday and told me that she is taking the salon in a new direction, told me not to take it personal, she wants someone that does microblading in there, and it’s just not working out…..Mind you I’ve been a good space renter, never paid late not even once, so I did take it personal because I’m not an idiot and I’m running a business here. And there is also another room that gets rented out by another girl who runs her own eyelash extension business, but she didn’t ask her to leave. So anyways, she told me I want to give you a couple of weeks to get your things in order and find another place to run your business. So you know I’m just a super positive person, if I’m not welcomed somewhere I don’t want to be there, I’m a hustler I’m great under pressure and I will survive, so I agreed I asked her to give me a couple of weeks and I’ll leave and she agreed to give me a couple of weeks, but also stated that she’ll be putting up an ad and having people come check it out. So long story short, I had a client come in, she’s has been the other tenants client for the last two years, this was my third time seeing her, I do her eyebrows and the other girl does her lashes. Anyways before she entered my room she happened to write a review about the salon owner. I was booked that day and she came in early and sat in the lobby and waited until her appointment time, which was in like 10-15 minutes, during that time she wrote the review. I get her back to my room and the first thing she says to me is “the owner seems stand off ish” and I asked her why ? She explained that for the last two years she’s seen her eye lash girl the owner has not ever once, greeted her, spoke to her, she felt like the owner was to high up and stuck up, it’s literally common courtesy to greet someone when they walk in the salon. Since we have a lot going on in there it doesn’t matter who walks in whether they are there for hair, eyelashes or a wax I greet every client and I always offer a beverage and let them know that someone will be right with them! Just plain old customer service, so that client just felt like wow this lady has seen me be a customer for so long and she couldn’t have the decency to just greet her. I was in the room with another client and the owner was out front. All she had to do was greet the lady, but apparently she wanted her assistant to do it and the assistant never did. So after the client leaves the owner is like that lady just wrote a bad review about the salon, and I was like totally confused because she never told me in the room that she wrote a review, she just said her piece and I apologized to her and we moved on from the conversation. So the next day the owner of the salon texts me, doesn’t even have the decency to call me and is like “get your shit out of my salon by today” “I find it really coincidental that this lady writes a bad review after me and you had a talk” and I totally get it, so I actually called her because this is my livelyhood, I’m not going to just text you. I told her straight up, this lady wrote the review while she was in the lobby waiting for me one, two she’s clearly feels some type of way she has been a client of (I don’t want to say her name) for the last two years, I can’t do anything about how she feels. I asked her to please take into consideration my business, and have just a little bit of respect for me, I told her I would do everything I can to move on with my business as soon as possible because clearly she doesn’t want me at the salon and I don’t want any issues with her I wanted to leave on a good note. This is my first business and I love what I do so I begged and cried and she agreed to let me stay for a couple of weeks until I find somewhere else to move my business. A couple of hours later she calls me and my heart sinks, she asked me to call the lady and see if she could take the review down. I told her two things, first off I’ve only seen this lady 3 times, she’s been a loyal customer of the other tenant for two years so maybe she should ask her, but mainly her issue was this you, the owner, so why don’t YOU give her a call, that seems like the best thing right ? Wrong, she completely shut it down, she was like no the lady is going to get defensive and blah blah blah, she didn’t want to reach out to the lady, she wanted me to so I was like fine, I’ll see what I can do. But I just said that to shut her up and leave me alone about it, the next day, who’s is today, she harrassed me early in the am asking if I spoke with the lady, I said I called her but she didn’t pick up, totally lying because no that’s not my responsibility, well she pretty much threatened me and said “I need you to get her to take down the review” as if I’m supposed to force this lady to take down her review. So she scared me into calling the client, I was very apologetic, she really is an awesome down to earth client so o felt comfortable talking to her about the situation and the first thing she said was “why isn’t the owner contacting me?” She told me to tell the owner to contact her herself. As she should! So I told the owner and she just fucking went ape shit, lost her fucking mind and texted me(I have everything documented) to tell the lady that of she doesn’t take the review down if she ever steps foot on her salon she will call the cops. First off why the eff would you say that ? That’s just nailing your coffin review down for life. But no that’s what she wanted to say so that’s where she effd up at! Shortly after I get yet another text stating this “what I’m going to need you to do is get all your shit out of my salon by Monday because I feel like you could have done more to get this lady to take down the review” so she went back on her word, at this point I’m speechless because all of this over a freaken review. I called her because again I’m not effing around this is my money, I’ve worked damn hard to just take this kind of craziness over a text. She didn’t pick up her husband did and I was straight up, like first off we have a written agreement in black and white, there’s nothing in there that says they can just terminate it at any time, there’s no clause, I have everything documented pretty much if I wanted to be an A hole I could stay until September. He threatened me with legal action and all this other stuff, I’m just mind blown at this whole crappy situation. Obviously I don’t want to be there much longer but I can’t just get up and leave. Do you any laws pertaining to this kind of situation in FL? I’m Speaking with a lawyer tomorrow. I’ve complied with everything in the written agreement, I have proof of every week’s check, there is a paper trail. I’m just upset, I want to throw up, I actually was already looking into another space but it won’t be ready for another month! So I definitely am leaving but not by Monday! She can’t do that right ? I guess I’ll be finding out soon. Just wanted to know some of your thoughts and I’ll take any input you can give.
You’ve done everything you can possibly do. She can try to stop you, but she’ll have a damn hard time doing it when you’re standing there holding the agreement out to the cops. In Florida, we don’t have laws governing the relationships between commercial tenants and their landlords, but the contract is what the courts refer to. In this situation, it sounds like you’re very much in the clear. You have documentation, you have the contract, you can prove this eviction was instigated by the review, and I’m willing to bet my left arm that client (and her lash girl) are willing to submit testimony in your defense.
You were entirely right. The owner should have made that call–not you. You’re better off getting out of there. I live in New Tampa, btw. If I knew of any salon landlords down that way who was worth a damn, I’d point you at them, but I don’t. 🙁
Hey what’s going on? I’m going to be renting out a building for a salon and letting people come in and pay booth rent for there businesses flat rate every week. My question is what paper work do I need to show that I am doing just that to pay my taxes back at the end of the year? Also do I need to have a Buisness licenses to do this? And is it considered a job for disability purposes?
If you’re renting out a building, you’re a landlord/property manager. I’m not sure how that would be viewed by any disability authority, so you’ll have to ask them yourself.
You do need a business license, since you are conducting business. You will need the renters to supply you with a 1099 every January, and you’ll use those 1099s to file your taxes and report your income.
I highly recommend obtaining professional guidance. The building will need to be licensed as a salon facility, which means you’ll have to meet state board guidelines and comply with state board regulations. There’s a lot more to it than renting the building to people. (Unless you rent the entire building to a salon owner and make all of that stuff their responsibility, which is also an option.)
Hi there,
My friend and ex colleague is opening a beauty salon and offered me to work with her. I don’t want to be an employee and she doesn’t want to be an employer. We agreed that we could share the rent and she will take a pourcentage of my treatments for the use of products and equipment. So what is a reasonable pourcentage for that kind of business? Also what are my rights? We both agreed that decision for the business will be make by agreement on both side (for new products, services…). Will I be considered as a self employee or a booth renter ? Do we need a contract ? My friend is a business owner but lease the place.
Thank you
I don’t advise that arrangement. Instead, you should share the rent. You run your business and she runs hers. You can purchase your products from her if that’s easier, but do not do any percentage arrangement. It won’t work out in your favor at all. In this arrangement, you would be a renter and she would be your landlord, and you absolutely need a written lease agreement between you.
Hi Tina,
I’ve been a booth renter for 6 years and I just moved out of state and have to rebuild everything. I’ve learned so much from reading all the q&a’s on this site.
My biggest concern with the place I chose to rent a chair at in my new state (Oregon) is that I walked into my salon the other day to my station being moved over (mirror and all) about 4 ft for her to cram another station In the already small area that I’ve been renting. I have never ever in my years have had this happen to me. I felt so disrespected and angry I almost started crying right then and there. There’s absolutely no way I can work being less than 2 ft away from the new station next to me. Is this even legal what she has done to my space that I pay her for?!
I know she won’t change it so I’m going to find a different salon to work, but I want to know my rights when I tell her I’m leaving
I hate when landlords do that, but there’s likely not much you can do unless the lease specified the square footage. It’s possible that the state board has limitations on how closely professionals can be put together (Florida has rules regarding that, but I’m not sure about Oregon). In this situation, regardless of the terms of your lease, I would think you’d have every right to terminate since the arrangement has changed so drastically, but if you can, stick out the rest of the lease term (or talk to an attorney about your options) instead of breaking it. In this situation, you really should explain to her that she lost a loyal tenant. It was a poor decision on her part, and poorly executed.
I just got hired at a salon that pays me commission on my sales, handles all the tender and booking, makes all the prices and I don’t pay any rent but they told me I am an independent contractor and so need to get a business license and my own insurance. I am doing all of that and just got my first paycheck which was just a personal check. I’m confused but when I’ve asked I don’t really get a straight answer.
P.S. They also give me a schedule I have to be available for, provide all products they ask us to use, but they do not have the salon rooms cleaned or have any standards for the technicians to clean their rooms. So it’s like we’re employees but independent contractors. If state board came in and saw anything and fined me, the salon wouldn’t get fined because I’m an independent business owner now. But is that legal to be paying commission to an independent contractor? Also, there was absolutely nothing signed. They just want your business license and social.
Do I have any rights in this situation? Can I get fired? Can I take time off when I want? Etc?
(I edited your comments into a single comment.)
If you read the article, you know you’re very likely misclassified. I recommend that you read this post, this post, and this post.
This arrangement isn’t appropriate, and the personal check thing, their request for you to get a business license, and their refusal or inability to answer your questions are major red flags.
Hi, after 20 years of running my business I’m looking to back away and let my girls (who have been with me since the beginning )take care of my baby. I want to convert them all into booth renters. My question is what is the correct legal way to sell gift certificates (we sell a lot).
You guys can totally still sell and accept gift certificates so long as the renters are doing so voluntarily. For these situations, the salon itself can sell the certificate and the renter can redeem it. The salon would just have to reimburse the renter for the value tendered.
Do booth renters have to declare themselves as independent of salon? When taking walk-in how would customers know. Do they need to know
What if renter choosesto use salon booking system but collects all her payments and c.c. transaction go straight to her private merchant account? thanks
If they choose to because salon is busy and about 60% of clients don’t ask for someone specific. Can I charge them fee to book appointments for them? Obviously they can book and give our their number anytime
Here’s an article that should help! You can charge for reception services, but use their phones and their scheduling systems.
Still no. You don’t want to merge their business assets (their clientele) or their operations (their schedule) with yours in any way, shape, or form. Never, ever use a central booking system with renters. It’s really inappropriate and not something you should risk.
They should absolutely define themselves as a separate business entity (this benefits you as much as them). Clients should be made aware that the renters are renting space–they’re not employed at the salon. You aren’t responsible for handling their client’s complaints or doling out refunds if they aren’t happy with the service the renter provides them, etc. Renters should not be wearing your uniforms or putting your branding on their cards or promotional materials either.
Hi Tina I have a question my boyfriend is it independent contractor in a barbershop the owner does not pay any of the barber’s taxes but dictate their schedule, tells them that they cannot take any breaks or lunch breaks, and tells them when they can and cannot take time off. She sets their dress code and makes them promote the shop name. Is this legal in the state of Washington?
It is not legal in any state. This post and the regulations discussed within pertain to federal laws, which apply to all states.
Hi Tina,
I am a salon employee who gets paid commission only and for my taxes I am a w2. My question is every week my boss charges us for color product. Every touch up, highlight, glaze we are charged. This week I had 250 dollars taken out of my pay. We used to be 1099 employees so we thought it was legal, but now that we are w2 employees we are wondering if this is legal? And if it isn’t legal how do we go about handling this?
Thank you!
She’s doing it wrong. You should read this post for more information.
Do you know what states do not allow (illegal) booth renters? I know PA is one but I am curious if there are others. I would love to know your thoughts on why this would be illegal, too.
Thank you!
I believe Texas is the other, but don’t quote me on that. Last I checked, there were two states–NJ is definitely one of them.
As for why, I also can’t say for sure, but I suspect it has to do with tax evasion and the abuse of the self-employed.
I’m a stylist in a salon. It’s 50% commission but she 1099 me at the end of the year. I’ve heard from a few people it’s illegal to do this. But I want to have facts before I go to my employer with this. I read your article about employers who do this to avoid paying the taxes on their end. Thank you.
I personally disagree with the “booth renter” basically can do what ever they choose ,in my salon . Let’s be clear , they are not business owners, they don’t own the chair, the station, shampoo bowls, the mat, the dryers nor leasing or own the building. They dont have a business license, no powe bill, water bill, cable, phone ect, tissue detergent, didnt pay for any construction that was done . They also have no rights to keys to the building. ..hmm mm why? Because you are renting a chair , to make your own schedule, handling of your own money and supplies. But If your are working in someone else’s established blood ,sweat & tears , there are Guidelines ,& Vision to follow accordingly. I’m pretty sick of hearing this theroy of booth renter do what they want in someone else’s business . Yes the rent a chair in a real Business Owner establishment but Oh you will have ediquitte to follow . And that not Illegal!!!! So please stop spreading that disrespectful information that is hurting REAL business owner , who are trying to pave the way for stylist to be independent (to a degree) to have a place to service their cents . It ju st make it haRd to have a structure business because of articles like this. If I ” a real business owner ” , whom leases a premises have to follow my “real Landlord” guidelines as to what I can and can not do. You better believe a booth rent , inside my established salon will have Rule and guidelines to follow . Point blank! I work to hard & invested too much into my salon, for stylist to come think they can ruin it by in titled attitudes because they are renting MY CHAIR, you have rule’s when you rent a car, house, or apartment right , he even homeowner have home owner association’s that in force how you cut your lawn, keep trash eCT !?! . So TRY SpreadING being a team player , no matter what position (renter or employee) especially, if your working in someone else BUSINESS!
This isn’t a theory. It’s fact. When someone is self-employed, they are self-employed. They are running their own business. They’re leasing space from you. To invalidate their businesses by stating that because they don’t lease the building the way you do–well, it’s a lot like the owner of your building saying you don’t own a business because they built and own the building.
Seriously, how dare you say that renters aren’t “real” business owners? Are you paying their taxes? Are you covering their costs? Are you marketing for them? Nope.
If you want a “structure” business, employ people. You can’t have it both ways. Learn the laws and your position as a landlord. It’s acceptable to have common area behavior guidelines, but you are not the boss of your tenants.
Hi Tina, I am an esthetician recently back to work since last year. I have been working on and off at a wellness center that provides facial and waxing services. When I first started a year ago, they were just in their first year and business was very slow. I agree to work for 30% on facials and 20% on product. Over the past year Business still has been incredibly slow but two weeks ago they handed me a W9 to fill out and I am very reluctant to do so. From what I understand from your blog, I have stepped over the $600 threshold for salary and that’s why they gave it to me. I have never worked in this capacity before. I have always been an employee of a salon and do not know how to proceed. My fear is if I sign the W9 with my information what little money I managed to make last year will be taxed at the 15% rate and that I have fallen into that “Independent contractor” no-mans land you were speaking of. My job is asking me today get to dedicate three days a week to be able to book me. Please advise.
Yikes. I’d tell the you’d like to be classified as an employee. They may not realize the difference between what they’re asking of you and what their fitness instructors and other *actual* self-employed associates do. (Sorry for the late reply. I go on hiatus each summer, so comments get backlogged.)
Hi there Tina, so I would like some clarification and knowledge! I am a new salon owner in Texas. I have a vision and it’s to have a uniformed salon. (Not clothing uniformed) it’s a lease salon, but I provide more than most salon for all stylist. Towels, back bar, station products, free quarterly education, in salon incentives, advertising and even pay en extremely high commission on retail sales. I have a stylist that isn’t a team player. She wants to “come to work, not sell retail and leave”. My question is with all the things I provide all I am wanting is a little help selling the retail. I am aware I can’t “force” anyone to sell anything, but what are my rights as a salon owner. They have no lease contract with me at all either. Any advice would be helpful.
P.s. I only allow the products I have chosen for my salon to be the only thing used, but I provide the station products also.
Yikes! You need leases. Definitely. Right now. RUN to an attorney and have them drafted immediately.
Anyways, once you’ve done that, you have to accept that you can’t enforce retail quotas or require them to use a particular product line. If you want to provide it, you can, but I don’t recommend it. The best you can do is provide strong incentives for performing the way you expect. Providing the station products for free will encourage the renters to use them, and high retail commissions will encourage the renters to sell them. Additionally, you should be launching a strong retail game yourself by keeping the selection current, maintaining a mailing list clients and customers can sign up for through your website where they can get news of upcoming releases and product sales, and providing them with incentive to buy from the salon.
Definitely stay away from the quotas and expectations though. It’s a scary gray area. Good luck! 🙂
I was working at a salon And the owner made us file as ID’s. She paid us 30% commission on services and made us clean around the salon. I just now realized that she was not following the rules while reading your website. I just quit about 2 weeks ago and I asked her to mail me my license and my last paycheck. She said she would have it in the mail. It never came and I have been texting and calling all week with no reply. I’m not sure how to get my license because the salon is very far from where I live and she is hardly ever there and I don’t know her schedule anymore. I can’t go pick it up. I’m not sure why she wont just mail me the license and check. What should I do?
Well, you have two options.
1.) Send a certified letter requesting they be sent (being sure to cite any wage statutes that apply–and there likely is one). Warn her that should the check and license not arrive in 15 business days that you will be filing a wage claim with the state authorities.
2.) File a wage claim with your state authorities and order a replacement license from the state board.
If I were you, I’d do those things in that order.
Hi Tina can you please tell me which law states that a salon owner can not dictate dress code guidelines for an independent contractor. I’d like to know specifics as it comes up frequently in arguments. Thank you!
Hi Danielle! There’s no statute that specifically states, “salon landlords cannot dictate dress codes for independent contractors,” but rather a series of factors that outline behaviors that are considered an inappropriate degree of control. You can find those factors and a detailed explanation of them here. Additionally, common sense should be applied. Ask the salon owner if their landlord (the property manager or owner of the building they lease) has the right to dictate to them what to wear, how to behave, and how to conduct business. The answer, of course, is no. Even in other sublet facilities (where multiple tenants–CPAs, private practice attorneys, and counselors–run their businesses in a shared office space), the landlord does not concern themselves with how those tenants do business. Common area conduct aside, self-employed professionals are free to do business how they please.
Hi Tina,
I work for a corporate nation wide salon that pays their stylist an hourly wage for blowouts plus whatever tips we get from each client. Their booking system is through a call center for every salon so the actual salon does not deal with booking at all. This creates an issue with scheduling because we never know when clients will cancel or book through the call center until the system is refreshed by the receptionist. When it happens that the book is slow, they let go of some of their stylist early to save on labor wages which is perfectly fine. But sometimes, when they know the book will get busy at a later time (could be an hour, two hours, or people can suddenly book at any moment) they will have the stylist clock out on break until they are needed. They say they don’t require us to stay in the building and we can do what we want for that time, but we are not allowed to go too far as they can need us at any moment. For someone like me who lives 30 minutes away, I can’t go home or do what I truly want during the time I’m clocked out….which in my mind makes me feel I’m being held hostage to stay in the area without pay. Is this legal? I’ve been told that in PA that there is no law on the amount of hours they require you to go on “break”. There are even times they have us clock out for an hour, then clock in to take a client, then clock back out for another hour (or two) until it gets busy again. Just to keep the ratio of labor based on client intake low. They say if I don’t agree with the way they do things in this salon, then I can quit at any time.
Please let me know if this is lawful. If so, maybe I do need to find another place to work that does this to their employees. From what I read from the US State Department of Labor Laws, if the employee cannot use their time the way they want and must stay close in order to be “on call” then I’m entitled to be paid. But I may be misinterpreting the law? Is it different in PA as they said? I would appreciate some clarity on this issue. Thanks so much!
Hi! You’re correct. If you can’t use the time for personal purposes, you are likely being “engaged to wait.” Any time you are “engaged” by your employer, you’re required to be compensated. It is NOT different in PA–this is federal law. Here’s a post about being engaged to wait. The FLSA Fact Sheet that contains the information pertaining to the topic is linked there (but it sounds like you already found it).
My sister recently joined a hometown salon that is paying her hourly. The employer keeps all cash and credit card tips and uses them to pay her in her check. An example would be if she made 5$ in tips in one hour and the minimum wage is 9$, then her boss would pay her 4$ to add up to the 9$. Is this something that can be done in a salon?
Tip credits are legal. Here’s more information about how they work. As an employer, I’d never utilize them. They’re complicated and I find it insulting that employers expect licensed, educated beauty professionals to earn server’s wages plus tips.
I recently performed a service as an employee of the spa that was on my schedule… later in the day after I had left the client returned demanding a refund because they were not happy….. I found out later that my employer went into my pay and deducted back out the commission I had earned performing the service….. is this legal? I was there performing the service that was put on my schedule, and now the employer says because the client didn’t pay ( they were refunded) I don’t get paid
It depends on your employment agreement. If–at the time you were hired–you were guaranteed commission earnings with no contingencies for instances in which clients are refunded, the employer would be obligated by that agreement to compensate you the way they promised, otherwise there’s a possibility they’d be in trouble for deceptive hiring practices. However, if you have no agreement or if the agreement says nothing about refunds, your employer is only required to ensure you’re earning the prevailing wage for each hour you work. So long as they met the prevailing wage obligation, it may be legal.
Hi, thank you for your response… however I’m not sure what a prevailing wage means… the only type of payment I receive is commission from services I perform, I receive no hourly pay for any reason, so the service was put on my book as an employee and I performed the service as expected… if the money is taken away that means my time was free?, I also did not sign any contracts when I was hired although I do receive a w-2…. sorry to comment again I’m
Just confused
The prevailing wage is the federal or state/city minimum wage–whichever is higher. To determine whether or not you were compensated in compliance with the prevailing wage laws, all you have to do is divide your paycheck by the hours you’ve worked in the pay period. If the amount exceeds that prevailing wage number, your employer was in compliance. If not, they weren’t and you’re owed those wages. Many states allow deductions from wages, but they’re typically very heavily restricted. For instance, the employer can only deduct taxes, employee benefit contributions, and court ordered payments (like child support). In the states that allow deductions from wages for things outside of those listed, they generally require employees and employers to have signed agreements. Here’s a post about it.
Hi I left a salon over 2years ago now but just noticed they have used a picture of my work on there page !!! Is this allowed or do they need my permission…. HELP
It depends. Did they take the image from your profile or website or did they take the picture while you were working with them?
Have a question I’m a 1099 at a salon and I’m an esthetician I’m the only esthetician on a busy salon, the owner after 1 year is bothering me with things like you are taking too much time off, if I have no clients I leave is that acceptable? 3 of my co workers have complained the oil diffuser is making them sick so now can’t use it? I’m getting annoyed and feeling out of place can I give my notice and leave?
If you aren’t a renter, you aren’t truly an independent contractor. I recommend reading this article and the others linked in this post for more information.
Hi, I have been a booth renter for the last 9 years and recently we had a change of ownership. We really haven’t established any rules or what she’s expecting of independent contractors and booth renters since she took over. A few months back she asked me if I would help out with a wedding party and I agreed. The wedding party came in and I did 2 updos. The new owner was collecting the money in after the clientele left she gave us our money when I counted mine it was only half of the profit. She then informed me that if a wedding party is booked thru the salon that I will only receive 50% of the money. With being a booth renter I am using my own products and supplies do you think this is right?
I don’t know if you agreed to another split previously, but in the future, you need to do the following:
1.) Get everything in writing. Those weddings are contracted jobs. You need a written agreement that clarifies the terms.
2.) Determine your rates in advance and have the owner agree to them in the contract. You’re allowed to have terms. You’re a business owner. Set your price for the event–and I highly recommend you do a day rate versus a percentage of the sales. After all, if you’re at the wedding all day, that’s an entire day of lost revenue for your business. Charge for the time and revenue lost–not just the services.
When the salon does coupons, are you legally required to pay commission on the discounted or regular price?
Absent an employment agreement that specifies otherwise, there’s no legal requirement beyond the assurance of the prevailing minimum wage for each hour worked in the pay period, so if you divide your paycheck by the hours you worked in the pay period and the number falls below the prevailing wage, the owner would need to make up the difference. However, if the number meets or exceeds the prevailing wage, they’re in compliance–UNLESS your employment agreement or offer letter guarantees you commission on the pre-sale service prices.
Is it illegal rent a both to a hair stylist and charge her commission on (our) clients only? She has a big following, and she keeps 100% of her clients revenue,but she does great work so (our) clients want to go with her
I highly advise against doing that. If the clients wish to see her, they should become her clients. You’re putting yourself in a position where you could be determined to be her employer, as the commission split structure would require her to report earnings to you. In that scenario, you’d be the one accepting all the risk. For me, the reward wouldn’t justify it.
My ex salon boss/owner is threatening to sue me over my profile pic that I am using online that was taken in his salon by my friend/co worker’s phone (that has also left the salon). His salon name is not in the pic (just taken next to product shelving) does he have just cause for a lawsuit against me?
I highly doubt it. He didn’t take the image originally and has no ownership over every photo taken in his facility. The person who may have grounds to take action would be the photographer, but even then, the whole thing sounds flimsy. Ignore the ex-boss. Don’t reply except to say, “Please stop contacting me.” Once you’ve said that, block him if you can. If he continues to bother you, contact the police and have them warn him of the consequences for stalking and harassment.
This broaches copywright law. If you were an employee there is a work made for hire doctrine which makes the picture the his. If independent stylist odds are you own it or it falls under “Fair Use” and you both have rights. We are working out our policy for our salon right now and this one is a little tricky.
There’s no breach (or broach) of copyright law here, and nothing tricky about this, especially if the professional is self-employed. It’s not a corporate authorship issue, as the professional in this situation isn’t producing images (or the artwork used in images) for hire. If the employer were hiring and compensating the professional to produce an image the planned to sell (a work prepared by an employee within the scope of his or her employment), then the image would constitute “work made for hire” and unauthorized use of that image by the employee would certainly be a problem. This is an image of the professional taken by a third party–an image that happened to be taken inside the facility. The employer has zero ownership over the image and no grounds to take legal action as it doesn’t meet the standard of the work made for hire doctrine.
Could you please clarify the difference of Independent contractor vs Booth renter?
Isn’t a booth renter an independent contractor?
Thanks you
Here’s a post that explains the definitions in more detail, and another. To put it simply, booth renters and independent contractors (freelancers) are both self-employed. Booth renters may occasionally work as an independent contractor (for instance, on a film production or at a fashion show), but independent contractors (freelancers) work almost entirely on a job-by-job basis for a wide variety of businesses that have nothing to do with the job the contractor performs. Do you know any professional MUAs who work on photoshoots, movies, and fashion shows? Or platform artists who demonstrate for a wide variety of brands at trade shows? They are legitimate independent contractors. Each job has a contract. Each company (the ad agency commissioning the shoot, the production company facilitating the creation of the movie, the event planning company organizing the fashion show, the product company that makes and manufacturers the hair color) are not in the business of providing professional beauty services. They require the skills of the contractor to attain a result–then leave.
Hi Tina,
This just happened in California:
https://probeauty.org/docs/advocacy/2018/dynamex_brief_06_2018.pdf
It’s a game changer for sure. Thank you for your blogs, very informational, and you are so objective, which makes it good for the salon owners as well as the stylists. What really shocked me were all the questions and comments from stylists who were being paid via ‘highly creative’/illegal compensation methods. I’m a salon owner who has a labor attorney advise me on how to do what an employer is supposed to do, because I really want to take the best care of my team. So I’m 100% compliant with the law, which changes regularly, so I need to check in and be sure I’m still doing the right thing from time to time. Now this new ruling is basically going to render independent contractors and booth renting illegal in California, which means all the salon owners who had hybrids or one big booth rental salon are going to have to employ their stylists, and they won’t know what to do. It’s super complicated. The state wants to be sure stylists are classified correctly and paid properly. Based on the questions and comments on your blog, so many stylists are NOT being paid legally or properly, but they think they are.
I hope you’ll consider writing a blog post about the new ruling, because the only independent contractor hairstylist that will be legal will be in a suite, since the ownership of the suite is only in the Real Estate business, not the beauty business. Thank you again for the service your blog provides.
“I’m a salon owner who has a labor attorney advise me on how to do what an employer is supposed to do, because I really want to take the best care of my team.”
AMEN! (See everyone? We DO exist!)
I’m so glad you suggested this, because I’m currently working with attorneys in California to make sense of the ruling and to determine the best way to advise salon owners through a blog post. It’s taking time because I’m also building a listing of trusted attorneys and HR firms to contact. I promise it’ll be published, I just can’t commit to a firm date yet. 🙂
Hello Tina,
I have read your articles and they have been VERY helpful. My situation is rather messy and I don’t know where I fall on the independent contractor/employee spectrum.
I signed a contract stating that I am classified as an independent contractor. I work full time as a nail technician on my own schedule but I “technically” can’t come and go as I please. I am paid a 49% commission rate on a weekly basis, but I also get an hourly wage that meets minimum wage requirements if I don’t make enough in commission that week. I am responsible for paying a self employment tax and I am given a 1099. When the business started, we were on W2. Taxes are NOT taken out of my check at all, but I only get 49% of the money for the services I perform. We have no PTO, workers comp, or unemployment options.
I perform services that are specifically ordered and commissioned by the company. (the company is an LLC.) The owner provides our tools for us as well as the products we use. We are not allowed to do certain things or perform certain services like using an electric file. We wear uniforms and adhere to a dress code.
I feel strongly that I am being misclassified but I am not sure what I am getting myself into by talking to my boss. She is a genuinely good person and I don’t think she is doing this intentionally. I know that the IRS and Labor Board does not discriminate against people with good or bad intentions. I spoke with my states Labor board representative and he told me I could file the tax form to the IRS or file a complaint with them. I want to let her know what is going on first before I even consider taking legal action.
My plan moving forward is to talk to my boss immediately about what I learned and to let her know what she is doing is possibly illegal. I love my job and I don’t want to lose it because of this. I would really appreciate your advice on what I should do and if I am being misclassified. Thank you!! 🙂
You definitely aren’t an independent contractor. This article explains why in extreme detail. Your boss likely isn’t misclassifying you intentionally, which is why I highly recommend reading this article also and following the procedure outlined there. Good luck! 🙂
I’ve definitely been misclassified and now the owner is turning us into hourly workers with a fair wage, however she wants us to sign a form releasing her of any responsibility related to our previous misclassified independent contractor contracts. She said we can’t work there anymore if we don’t sign this waiver and she is offering 200$ as a signing bonus. Is this a total sham?
She has also taken five percent out of our tips to cover credit card fees is this legal?
That’s a typical way to handle a transition to a legal system, but you have to decide whether it’s worth it to sign. If you feel you’ve lost a whole lot more than $200 (which you likely have) and you would gain more through a lawsuit or through a formal complaint process (which you probably would), it may not be a smart choice to sign. Talk to an attorney about your situation.
The 5% off your tips likely isn’t legal. Some states (not California) allow employers to deduct the processing cost off credit card tips, but they must only charge the processing fee for the tip itself (not the fee on the whole transaction, and not a penny more than the processing fee–which likely doesn’t come anywhere near 5%).
Hey I was wondering if it’s normal to be paying $50 a week for booth rent and also 20%-30% off of each service I do?
Your rent should be a flat rate–not based on a percentage of sales. You’re self-employed, so you’re paying 15.3% of your income to the federal government for taxes (plus more if your state has state employment tax). So you’re paying $50 a week, plus 20-30%, plus 15.3%+ in taxes, plus your business expenses? You’d be better off working retail at that rate. After all that, I’d be surprised if you’re making more than minimum wage.
Although I’ve read the article and lots of helpful comments I’m still a bit foggy on the Independent Contractor situation and how it relates to my situation. I was offered a part-time Esthetician position at a spa, Sundays only. She asked that I provide her a list of my services and that she will “give” me a service I can advertise & sell and I will get 70%of that service but I provide those products – she calls it a niche service. I assumed I’d be an employee since she specified she needed me for Sundays, Mondays & Wednesday but when she mentioned percentages I got mixed up. I asked her if I’d be an employee or contractor – she said contractor but I’ll get 50% of regular services, 40% of her specialized oxygen facials, 70% on my niche services, and 15% on products I sell for her. Are those reasonable percentages for a contractor? Also, do independent contractors have to provide their own tools & machines (towels, cabbies, steamers) in addition to products or does that just apply to booth renters? I haven’t signed anything or seen any paperwork, but I’m meeting this weekend and I want to be sure I have as much knowledge beforehand so I know what questions to ask & what to look for before walking in there. I don’t know what I don’t know and I don’t want to get taken advanatge of because I’m new to the industry.
It doesn’t sound to me like you are an independent contractor. I recommend reading this post and this one. It should give you a stronger understanding. It sounds to me like she probably doesn’t know what she’s doing and is just following whatever she considers “normal” for the industry. Are they “reasonable?” Honestly, I have no idea. You’ll be paying 15.3% of your income to the federal government for self-employment taxes, plus whatever state income taxes apply in your situation. No arrangement that allows an employer to treat a worker like an employee but skip out on taxes is “reasonable” to me. :/
Tina if a shop owner takes checks made to her and runs Thur her personal account and not business is this legal? Shop owner only excepts cash and checks doesn’t take credit cards does this sound shady.Has 11 booth renters never has give them a receipt for booth rental they all pay her cash all 12 only take cash for there business also.shop owner works daylight till dark 6 days a week and says total earnings around 38,000 collect no tax on products sold or services.booth rent is 375.00 month for 11 renters which is over 45,000 a year not counting she does over 50,000 for her services.is all this legal?
It likely isn’t illegal, but it’s highly suspicious. The renters need to be giving her a 1099 at the end of the year for rent paid (so they can claim it as a business expense and the owner will be forced to claim it as income). As far as I’m aware, all states have sales tax the owner of the business must collect and remit. It sounds to me like she’s evading taxes and the IRS wouldn’t have a hard time proving so.
Hi Tina!
Thank you for all the info! I am currently a booth renter. My salon owner has just told me by law in California I have to become an Independent Contractor and get my own insurance. He also told me he can no longer pay me commission for retail sales, provide towels or back bar. Towels and back bar have always been included in my rent. Does this all sound ok?
Tell him he’s wrong. The independent contractor classification is not to be used in salons. Even rental is on shaky ground in California with the recent Dynamics decision. You need to be a properly classified employee or a clearly self-employed renter. You are not and will never be an independent contractor in the scenario you’re currently in. It’s perfectly fine (and honestly, a smart move) to make you responsible for towels and backbar and to remove the retail commissions (at least until the state clarifies how Dynamics will affect beauty salons).
Firstly, thank you a million for all your info! Secondly, I am very new to this… so let me see if I am understanding correctly. Here’s my current situation, (I would SO appreciate your opinions and advice!)
I am 23, just obtained my LE & my Certified Medical Esthetics certification… My aunt runs her own business, a medical skincare office, she has two. I saw the business was lacking so many things, and I really wanted to work with/for her. So I busted my tailed, created all this social media for her to get the business growing a little more.
(most of her clients have been so for 20+ years, and all new clients are word of mouth, but there’s so many potential clientele in our area she was not reaching…)
So after proving myself and my work ethic, she has decided to hire me.
I am currently taking two full days a week, and this could pontentially turn into more time… I have been given set hours, I have been provided with all I need to complete my services, (besides waxing, I am bringing this new into the office and have supplied my own things.) I have a large clientele that I am allowed to pull from, but it seems that it will be MY responsibility to sell/fill my books.
(I don’t know if that matters,)
I am paid on commission, (50% commission on any and all services I preform,) and it has not been made clear if I will need to carry my own insurance or if I will be covered under the business. She has told me that I am responsible for my own taxes, as they will not keep track of those things?
What should I do in this situation?
I am an extremely hard worker, VERY passionate about what I do, it has always been my dream to work with/for her as she is my inspiration in all of this. I am just very concerned that I will struggle with taxes. I have NO idea how all this works, and it makes me very nervous.
Is she responsible, by law, to take out taxes and cover me under their insurance?
Thank you so much! I really appericate any and all advice!
Tell your aunt that you need to be classified as an employee, or you need to be paying a flat rental rate and running your own business in the salon. You’re not an independent contractor, and by classifying you (and others) as such, she’s at significant risk. She is required to not only contribute to half your taxes but to cover you under her company’s professional liability insurance policy. She is also required to ensure you make the prevailing wage for each hour you work–which I doubt she’s doing if she’s compensating you 50% commission.
I recommend showing her this article and this one.
You should also tell her that at 50% commission as an IC, you’d probably be better off working retail at minimum wage, or at a corporate salon that complies with the law. That 50% sounds great at first, but she has no incentive to ensure you’re busy if she’s not compensating you for your time (as evidenced by the fact that she’s making you responsible for filling your books–if she were paying you $15+ an hour, that would most certainly NOT be the case). Your 50% shrinks down to 34.7% once federal taxes are accounted for. It shrinks even further if you have to pay state employment tax. It shrinks more still if you’re supplying your own product. So ask her: what incentive do you (or anyone) have to work for her at that rate? You’re not an employee, so in addition to not being eligible for prevailing wage or overtime pay, you also lose access to worker’s compensation, unemployment pay, and other programs and protections.
Personally, I consider this arrangement unacceptable, but it sounds to me like she’s following “industry standard.” Inform her that the industry has moved on and that owners are increasingly being held accountable for their ignorance of the law. She needs to make changes immediately.
I would love your feed back on how I am running my salon. We are new and I want to follow the rules and do right by the stylist. I did meet with two lawyers to get advice . They both said kind of the same thing but honestly what they both said didn’t seem like it was in the best interest of the stylist and seemed like I was trying to get free work out of them. Both lawyers told me this was the normal way salons and barbershops worked in Michigan. Just because normal I do not think makes right. So I have researched blogs like this and tried to research the laws. with all this said this is how I have decided to run the salon.
All of my stylist are independent contractors.
I will give them a 1099 at the end of the year and my accountant will report to the IRS the stylist pay.
They all are paid 50% commission.
There is no hourly pay. However we usually give a Thank you for sitting here bonus at end of day if they had no clients.
They take their pay home nightly.
If on a credit card I pay them the whole amount that is theirs. I do not with hold any on the credit card processing fee from them.
There is signing bonus and other bonus threw out the year. They get one week paid vacation after a year. This is figured out by taking average weekly pay over a 3 month period.
They set their own schedule. They do have set hours that they choose so when some one calls in we know when to schedule them if that stylist is not there the day of the call to set appointment themselves.
If they have no clients they are free to leave but also can stay for walk in clients. I do ask that at no time anyone be there alone. If that is the case I will go sit up there.
I provide all the products, towels, towel warmers, laundry detergent, washer and dryer , ect everything except their main tools. I pay for all products plus give a commission off products sold. If Im at the desk and sell the products I give the commission to who ever the client sees.
They have to provide their own tools only
They have to keep their stations clean.
We do not have a dress code however a few rules. No shirts with political racial religion profanity nudity or drugs. Pretty much nothing that could offend anyone. At promotional events like our grand opening I did require if they participate they wear our company shirt with logo but they also keep 100% of any service they provide.
I provide the software, they picked their own business cards and I paid for them. I promote them on Fb on the business page and boost ads. we do a lot of marketing and I pay all of it. They are never asked to pay for anything unless something they would like to do on their own.
I will never do a non compete or any other contract like that however our rule is if a walk in the first time in they belong to the salon. The second time they come in if they ask for the same stylist that client now belongs to the stylist. If the stylist leaves they are more then welcomed to take clients if the client wants to follow. My opinion is the client has every right to see who they trust no matter what. If that client chooses to stay at our salon that of course is great but they should have the choice.
I do request them to answer the phone and greet walk ins. I do not ask them to clean up anything except their stations and around the wash bowls. Make sure all towels are in the hamper. Of course clean up own mess in the kitchen. Maybe check on bathroom to make sure they are clean of paper towels ect. They do not clean them but keep them from clutter if I am not there.
Is this how a true independent contracted stylist should be treated in the salon or am I doing something wrong or illegal? I have worked my whole life for others and have been ripped off more then once by employees. This is my first business and I want to treat anyone who comes in to work there fairly. I also want to follow all the laws.
Absolutely not. This arrangement isn’t legal and would put you at significant risk. You need to legally employ them and compensate them in accordance with the federal and state laws or present them with leases and make them renters. You’re trying to have the best of both worlds, and frankly–there’s a reason why that isn’t legal. If you want to follow all the laws, do so. Nothing about this arrangement is legal or in the best interests of you or your workers. Proceed this way and you’re asking to be audited, fined, and possibly shut down (depending on how seriously your state takes wage theft and misclassification). I’ll be happy to explain to you the many reasons why this isn’t legal and help you determine how to do things properly, but you’ll have to arrange for a consulting appointment by emailing me at letstalk@thisuglybeautybusiness.com.
I work for a commission salon. The salon is very nice, and high end. However, business is very scarce, like all the time. I was hired as a nail technician, (currently the only one). The problem is this. I work in a family owned salon where the daughter is a cosmetologist, the mother is the spa owner, and the aunt is the receptionist. After being hired, and doing very well bringing in business, specifically pedicures, the daughter decides that she does not want to pursue hair, she wants to do pedicures. Because I am not a booth renter, I do not have control over appointments, marketing, or anything of that nature. Since her decision, business has slacked off, and I have only been able to get a few service appointments, mainly manicures. One day, I just happened to have been standing at the front when someone calls and wants to get a pedicure, my book has been open, and I rarely ever get appointments. I realized that she has been getting every single pedicure appointment. When she isn’t available to work, It just so happens that I have no issues getting appointments. I have a lot of skill and ability, I even post, and market the business on my own time. She does not. I don’t believe that this is right, and I feel that It is time for me to go. I thought id reach out to you , just for the purposes of your opinion. Thanks in advance
Are you being compensated for all this time you’re sitting around, doing nothing in this “commission” salon? If so, they’re violating wage laws. It sounds to me like this may be the case—if so, it’s a huge problem and you need to get that money back by filing a wage complaint with the relevant state and/or federal agencies.
I also object to the fact that she’s getting preferential treatment with regards to walk-ins. You aren’t a backup; you’re an employee. They are responsible (to a degree) for your welfare. If they don’t respect you enough to allow you to earn a living, why would you stay?
I am a new salon owner. There is a booth renter who is hostile toward me and is loud and gossipy, sometimes just poisoning the atmosphere of my salon, which I have worked so hard to make serene and beautiful. I do not want her in my salon any longer. Our contract reads that either party can choose to not continue the contract at any time. So can I legally just tell her that I am no longer renting the booth to her and I will be renting to someone else?
Generally, if the contract gives you the right to terminate without notice, you can. Few states have commercial landlord/tenant laws.
Hey! I am a booth renter considering hiring an IC and paying commission per service. Can you point me in the right direction as far as what I need to do legally, contract wording etc? Thanks!
No, I can’t. I believe you’d be using the IC classification incorrectly, especially if you’re paying a commission per service. (To do that, you’d be violating several of the 20 Factors. Read more about those here.) As for contract wording, if you aren’t an attorney, I highly advise against acting as one–even for yourself. You would need to go to an employment law attorney to advise you. I suspect they’ll tell you the same thing I’m telling you, which is that the IC status wouldn’t be appropriately applied to your situation.
Should you decide to move forward, despite my warnings, be aware that you’ll be giving that “IC” the power to do a lot of damage. For you, this is a high-risk, low/no reward scenario. All it will take for that “IC” to detonate your life will be for her to file a form with the IRS and file a complaint with the state. I’m frequently contacted by professionals who accepted misclassification and brought every government agency they could contact down onto the salon owner the second the two had a disagreement. :/
I’m in a salon working commission but I’m switching to booth rent, the owner wants me to pay a month in advance for rent starting sept 1st. I’ve never heard of this. Is this normal?
It is normal. Some salon owners will allow professionals who they believe to have potential to work as employees for a while to build a following, then transition them to booth rental. However, the words “working commission” usually are synonymous with misclassification and wage theft, and those arrangements certainly are not legal.
Hello, I’m a both renter or independent contractor,
I’m rentin a both in this salon/barbershop for about 5 month, when I start here they let me to bring my stuff (makeup suitcase and equipment suitcase) I storage those at the back because I don’t use them an less I have to visit a customer (they designate that place for my stuff) they were organizing the area recently and pull my stuff out telling me that I need to take that home, my question is, as a renter do I have the right to have a designated place for my stuff? I don’t use my mekeup bag to much but in case someone ask me for that service I will like to have it with me instead of storage at home.
And my general question will be, as a renter what I have right to have? In space, services, and what not, inside of the shop I rent. thank you in advance for your answer this site has help me a lot already with all kind of information.
Your rights should be outlined in your lease agreement. If you don’t have one, you should insist on getting one. It will tell you how much space you’re leasing, the rate of rent you pay, and when the rent is due, along with penalties for late payments and how terminations are to be handled.
I rent a spot for my salon and have 2 booth renters. If I feel like they are undocumented workers, can I be liable for them renting booths from me if they are undocumented?
I don’t believe so. Employers are expected to obtain citizenship verification when hiring new workers, but renters aren’t employees. As far as I’m aware, there are no consequences for leasing to undocumented immigrants.
My friend is a booth renter at a huge salon. All stylist (all booth renters) are required to do towels. They are also required to pay the owner 50% commission when taking a walk in client. Is this legal?
The salon owner can’t require renters to participate in a chore schedule or control them like employees in any way, so that’s definitely not appropriate. The 50% thing may be legal, but it skirts a very questionable legal line. The requirement to report earnings and sharing in the profits of the sale constitutes an inappropriate degree of control. If the owner were charging a flat fee for the referral, that would be one thing, but 50%, in addition to being excessive, is inappropriate.
Hi Tina!
I tried to read through this whole thread to see if my question had been answered so I apologize if you have referenced this before. I work in Texas and I’m a 1099 hairstylist with a verbal contract/lease agreement. I sent my boss a text asking why we couldn’t use a certain color to which he got very irate about and then told me to “pack your sh*t and get the f**k out” the following work day. He has now reached out to my book of business and offered them a 20% discount to try another stylist. Keep in mind we are all 1099. My question is can he keep me from finishing out the month there since I’ve already paid for my spot for the month? Am I legally allowed to show up and work? Does he owe me a written notice to vacate the premises? Does he owe me the prorated amount of my rent back for the rest of the month? Can he withhold the money from me until he decides he wants to give it back?
He also has everybody missclassified as contractors when they are in fact employees. I plan to move forward with that as well. Hopefully I’ll get some money back. He apparently didn’t pay taxes on the 60% he took from me for 2 years and the IRS came after me for it because on my net and gross income it showed I made the money. He just wrote my paycheck for less. He is also operating without a license. The crazy part is that he’s probably the most talented and popular hairdresser in our state. Just a horrible businessman and a vile human being. Can’t fix everybody I guess.
All of this depends on the lease agreement you signed. Very few states have commercial landlord/tenant laws, so you have to go by the contract. Since you don’t have a physical agreement, trying to prove you had any rights at all will be difficult at best.
Typically, if you signed for the month, the space is yours for the month, but you don’t have an agreement. The best you can hope for is that the state recognizes the arrangement as a common law lease. He should never have had access to your client book to begin with. In the future, never allow someone who isn’t paying your taxes to have access to that data.
Proceed with the misclassification and wage theft reporting. If you can, consult with an attorney ASAP about your situation regarding the eviction. They’ll know better than I will about what recourse you have. 🙂
Can a salon owner require a booth renter to wear a specific dress code? For example our contract reads “must wear professional attire.” Now the owner decided this means only wearing white, gray and black. This is no where defined in the contract. She states she will terminate our lease if we do not follow the dress code. Is this legal?
Typically, this is considered exercising behavioral control, which is generally considered unacceptable, however if you’re in an open air booth rental salon, the landlord’s ability to assign common are a rules overlaps with your autonomy. While not explicitly illegal, it’s inadvisable to dictate dress to renters.
I’m trying to find out of a booth renter is legally supposed to keep their scheduling book. I’m in Florida thanks!!!
Yes. You’re self-employed. You run your own business entirely. As I said in the article, the landlord has no right to control your schedule or anything about your business.
Just looking for my comment well question about if legally in Fl does a booth renter have to keep for any reason my paper schedule. Like legally for tax purposes?
I’m not 100% sure what you mean by “paper schedule,” but I don’t know of any legal requirement in Florida that requires renters or landlords to keep schedule records of any kind.
Someone i know has been workin on commision. Today his boss gave him a booth rental agreement and wants him to become an independent contractor.But she wants to keep doing commision. Can it still be commision? Also wants to keep the same rules like tell them when they get to work how much to charge and to pay the register.
Also he pays for the shop hand which gets the place cleaned up every night. Does he have to pay for cleaning of the entire barbershop?
So, his boss wants to evade taxes but still control the worker like an employer? Lol. Yeah, no–that’s unacceptable and not legal. I’d advise your friend to immediately seek a new job, preferably working for someone who isn’t a tax-evading, wage-stealing scam artist.
Hello Tina;
I have a question, but first thank you for creating this website as I see some things I need to fix with how I run my salon. My question is how, if it’s even possible to have stylists who rent work part time, or pay half for a chair? For years I didn’t have a problem with this option, now I have stylists that opt for part time rent and work all day into the night and double book themselves essentially squeezing a full day into a part time rate. I don’t want to make the others suffer for a few that I’m struggling with but I’m really at a loss as to what to do. If I have to raise the rent on all the part time I will have empty chairs as I live in a city with a high concentration of salons in the downtown area. I’ve looked through your website and am not finding the answer.
Thank you
Hi Desiree! It is possible! I’ve actually consulted for several apps that connect salon landlords with renters who can rent by the day (or half-day). I recommend considering half-day rates or even looking into those apps–one is ShearShare.
My sister (& I) just opened a dog grooming salon and boutique in Florida.
I posted an ad to rent a “table/space” in the boutique and man o man did that stir up a hornets nest!lol
I want to charge a flat rate as rent, we supply the electric, water, cable, dog tub, washer/dryer and they supply their own table, equipment, towels, shampoo, supplies, charge and accept their own payments from their clients (if their clients choose to buy from the boutique it is rung up separately in our system) and they keep 100% of the money they make grooming. They set their own hours, come and go as they please (our boutique is open 6 days a week from 9-6), so even giving them a key is optional.
As a bookkeeper for 20+ years that to me is an independent contractor. I’m being told otherwise….
There would only be 1 direction coming from myself/sister and that is there will be absolutely NO abuse towards any animal period (happens more than people realize). This situation is indeed an independent contractor correct?
I want to be 100% above board and inline with the law and the people I posted the ad on now have me second guessing myself!lol
So long as they’re setting their own prices as well, that sounds pretty self-employed to me too. As a landlord, you have the right to set certain standards. While you can’t exert managerial control, your lease can absolutely prohibit illegal activities (including animal abuse) without constituting an overstep.
I just want to state that this article has provided a great deal of information. I’m a booth rental myself, and I pay weekly booth rent. I signed a booth rental agreement that doesn’t end until next year 2019. Thus far signing the agreement has been the worst thing I have done. I’m not making enough money in the salon to even pay the booth rent most weeks. The question I have is that the Booth rental agreement I signed is addressed for the current location we are at now in N.C. . The salon is about to relocate at the end of the month to a different address then what’s on my booth rental agreement. We have not yet to signed any new agreements with the new address. I wanted to know is this my way to break my agreement and not owe the salon owner? I really want out of there!!!
You’ll have to talk to an attorney about your specific situation. I’m not a contract attorney.
Hello, I’ve been working at a massage business for a little over a year (right out of school) and, for that entire time, have felt like something is not right with the situation. Okay, I am paid a commission of 47% on every client I see. I don’t pay booth rent. Taxes are not withheld from check. I provide all my own supplies and equipment, do my own laundry at home, and receive a 1099 each year. The business owner requires us to split credit card fees with her for every client act uses a card to pay for their service. Prices are set by the business owner, though she does allow us some wiggle room if we want to give a discount. Hours are dictated by the business owner, though, again she allows us some flexibility in that area (but she recently chastised me for taking every 3rd Saturday off so I could stay home with my children while my husband works). Both the business owner and the other therapist that works there have referred to our position as “independent contractors” countless times. Just something is not adding up. Can anyone help clarify this for me?
This article does clarify it pretty clearly. You’re misclassified. I recommend reading the linked articles in this post and the comments in both.
Okay so I’m a nail tech. I was working for a company that claimed I was an independent contractor. I filed a 1099 and I was paid commission 60/40 and I was having to supply my own product at least over half of it. When I first started there, I didn’t have to supply anything but after being there at least a year I started having to supply more and more. I was under the impression if I pay them 40% they are to supply everything I need. I recently quit this job about a month ago due to harassment because the owners boyfriend wanted to get up in my face because I wanted to leave at my designated time to leave. I was required to be there from 9 a.m. to 6 p.m. . The owner told us we were allowed to take a 30-minute break but we didn’t always get it. What can I do about this? I know that I no longer work there but I still have friends that work there. Can I contact labor board? Will it do any good? Maybe the IRS?
File an SS-8 form with the IRS. They’ll direct you from there.
My question is..
So I work for a specific company. I charge clients their prices (because I have to), I do their specific services, I make my own hours, they bring in the clientele, and I get paid 50% of the cost that was charged to the client. I’m questioning wether I’m an independent contractor because if I need to leave early or come in late, my boss gets irritated. If I need a day off, he said I can’t take days off in short notice because the holidays are busy. They don’t schedule me a lunch so I barely have anytime to eat. I did sign a no compete contract so I can’t do lashes out of my home and my boss says I’m a 1099 employee.
There’s no such thing as a 1099 employee. You’re misclassified.
If you are employed by a salon and business is slow can you also get a part time job at another salon in another town to help things along or is that conflict of interest ?
It depends on the policies of the employer. Some will allow you to work in other salons, so long as they’re located elsewhere, but most won’t allow it no matter how far away the other salon is. Personally, I recommend working and building your clientele and reputation in one location. If you need additional income in the interim, seek a part-time job in an outside industry. Certain positions may actually help you expand your clientele (for instance, cashiers, bartenders, and waiters meet a lot of people during their workday).
I was booked on Monday is my normal day to work. I am a full time booth renter. The owner of the salon made me cancel my day because she was having a guest speaker. I was upset. It’s december my busiest month. And I had to give up a busy day so she could host a class. Do I have any rights. I feel I was wronged. She said she can schedule guest speakers in her salon and I cannot work those days. What are my rights. I read all comments and didn’t see my problem
I would consider that a violation of your rights as a self-employed business owner, but if the lease permits it and your state doesn’t have any commercial landlord/tenant laws, there may not be much you can do about it except insist that you get an agreement from her in writing that her “guest speakers” won’t interfere in your business operations–and that if they do, you’ll be reimbursed the difference in rent.
I work 1099 for a shop. My boss used to take 50% of our credit card tips. Now because she lives above her means takes all of them. Dhe wont say that.
She claims she puts it on our checks at the end of the week but thats not true and we never get pay stubs.
How can i prove she is stealing out credit card tips? I have no proof but my own records and those are hand written.
Your records should be sufficient. I recommend contacting your state labor department (if you have one). If not, go to the Department of Labor’s Wage and Hour Division and file a complaint with them.
I work at a business on a W2 but i get paid commission on each customer i have. Question is…. If i have no customers til 12 noon do i have to be at work at 9am when we open? to be there for 3 hours and not get paid because i have no customers til noon. Are my employers in the right to have me come in at 9am for 3 hours with no customers and NOT pay me for the 3 hours i am there waiting for my first customers at noon?
If they are complaint with prevailing wage laws (meaning that they’re tracking your hours and ensuring your paycheck meets or exceeds the prevailing wage plus any applicable overtime for each hour you worked in the pay period), then yes. If not, they’re in violation of wage laws, which calls into question your “obligation to obey” as an employee.
I am a renter in FL, I am up to renew my rental agreement, I am looking for a standard termination clause with a notice of course, as I do not want to be legally bound to a rental space. Owner says they won’t hold me to the contract, but I know if I sign it they will. Is there a standard clause that you can recommend that would allow me to terminate my rental agreement?
Typically, I’d recommend bringing this to an attorney, but really, that’s the landlord’s job. You don’t need to put in anything official. Strike anything you don’t agree with and red pen it–“Either party may terminate the lease without penalty with X weeks’ written notice.” Make sure the landlord initials, signs, and that you BOTH get a copy immediately. I also recommend that both of you initial every page so nobody tries to slip anything in there later.
Hey!
If one of my renters for the salon is busy enough she wants to hire her own assistant. What does that mean for me? If the booth renter responsible for her liability and merchandise insurance ( I make all booth renters have both) I am in FL.
It doesn’t mean much of anything for you. The renters’ insurance policies should cover any employees she hires, and so long as she understands that her continued adherence to state board regulations will be a condition of her lease (meaning that she should never, ever be utilizing that assistant in ways she knows violates our state board guidelines), nothing really changes for you at all.
Okay I’m here looking for advice but this comes with lots of tea and is a little long.
I started working at a booth rent salon back in July. I was fresh out of school and I was very excited. They had just moved into this big new building in May with lots of promises of how many things were going to be done to it.
Fast forward to September when no improvements had been made but also the electric company had come in to shut power and water off due to the bill not being payed. The salon owner (let’s call her Amanda) paid exactly enough to keep the power on. Sent a screenshot saying “idk why they’re there but I paid” and on the screenshot you can see that day’s date as the date of payment. Amanda comes up with a story about how it was the previous tenants balance. Anyone who pays their electric bill knows that’s not how it works. And not that many months later. I know people who work at the city electric company and they have told me that the salon is a serial last notice address. Many months behind.
Also in Sept I came to find out that there was no facility license for the building until August 31, 2018. We were all working in a building that had no facility license. Yikes.
In all those months, the power had gone out many times. If two people had a blow dryer running, the power would shut off and we’d have to go outside to fix it in the breaker box.
There are only two shampoo bowls to 12 hair stations.
Amanda went to coffee with another stylist. That morning before coffee, Amanda was fine with me. I was getting call in clients, she talked to me a lot. About an hour later when they came back from coffee, her attitude was completely different. Has only given me ONE call in client that didn’t call to request me.
In November I found out that not one permit had been pulled on the building. Not a change of use permit when it went from retail to a salon. Not a permit to rewire the building like she had done. Not a permit to change plumbing like she had done. There’s still not a sign on the building. Why? Because you need a permit for that. Which means no city inspection has been done. There is not adequate ventilation in the building for the hair and nails that are done there.
Dec 31, I put my notice in. Amanda takes me off the website. Jan 3, I announced on Instagram that I was moving salons. Jan 4, I ask her to put me back on the website (screenshot attached) and she called and told me that she took me off because I confused all of my clients and a lot of them called when I announced I wouldn’t be doing one booking in my space. Note I didn’t announce until 3 days after she took me off the website. I explained I’d be happy to fill my clients in more and requested she put me back on. She agrees but with an attitude on the phone.
I come back from 10 days off and my rolling cart that I keep near my station out of the way is moved to the back with people’s dirty bowls and foils on top. I move it back out to where it goes. Amanda asks today if I can move it back to the back. I said “okay” because I was caught off guard. Well multiple other people have extra items out by their stations including: a bench, a rolling tray, a rolling cart, and an ottoman. So I sent a text explaining why I thought it was okay to have out and asked if there was a better place near my station for it. (Screenshot attached). No response. However, she has moved my cart to the back. Again.
The place I’m going is down the block. We were told that we cannot point to the new space from inside the building. We have to go outside to do so.
I was not presented with any contract. There is not a signed contract. Can she keep moving my cart? Can she tell us not to point in that direction? What can I do other than leave when I’m leaving?
Without a contract, she really can’t do much of anything. I mean, she can try, but it’ll be real hard to argue that she has the authority to enforce any of those policies without you having agreed to them in writing.
I don’t know that there’s anything you can do other than leave, but honestly, you likely won’t have to as it sounds like she’s doing a fine job of drowning herself, lol. It may not be worth the effort to even attempt, as incompetent owners like this tend not to last long after their luck runs out.
I figured this may be the case. Thanks so much for responding. She has threatened to “fire” me and when told she couldn’t fire me she lost it yelling at someone and said she’d fire all of us. The new space is being built and will hopefully be finished sooner rather than later
Hello,
Love, love, love all your site, so very informative. Had a question… If I am renting a chair to a stylist, can I rent it by the day to two different stylists as long as they have access to it 24 hrs the days they rent it?
Absolutely! A lot of salons are moving to more of a “drop in” model, where renters can book chairs online by the day, week, or even hour. If the arrangement for this station is meant to be long-term, have them settle on the days they want the station reserved for them, then ensure the chair is available to them on those days. It’s completely legal.
I have a simple question (I hope) regarding 1099 vs. employee.
I am an esthetician and am considering leaving my spa and going elsewhere. There is a yoga studio near me that also has an independent massage therapist renting a room there. she is not allowed to sublet to me based on her lease, but she IS allowed to have someone working under her company name. I would use the room when she is not there, so we would figure out a schedule. She wants me to run ALL transactions through her business, and she will take a pre determined commission of all sales (my services plus product sales), but with a monthly cap on how much she can take. I will provide ALL equipment/products myself. She will place me on her website as an additional service offered, and appointments can be booked that way as well.
Is this a legit setup for me being a 1099?
Thank you.
No. The degree of her financial control over your business is too high. There’s no valid reason for her to be having you run payments through her processor or giving you a commission on your sales. While the cap helps make the argument that you’re a renter, there’s a requirement to report that I would consider too risky to even attempt. The central booking element is also absolutely inappropriate. I recommend asking her to set a flat rate, agree to the days you’ll each utilize the space, formalize the agreement in writing, and each of you run your own business completely independently of one another.
I’ve been searching all over the internet as well as contacting my states cosmetology board on this question and have been unable to find an answer. I am a booth renter and recently I accidentally let my my independent contractors license lapse and was fined by the Ohio state board. In accordance with the law my salon was also fined. One of the owners recently confronted me and said I was responsible to pay the fine levied against the salon as well. My question is do I have any leagal obligation to pay the salons fine as well. As far as I know there is no stipulation for this is my contract for renting the booth. Thanks in advance for the input.
You likely will, as it will be difficult (if not impossible) to defend the position that you are not responsible for their fine, should you end up in court. Additionally, should you not pay it, the owner would be within their rights to terminate your lease–especially if the contract made your continued tenancy conditional based on your compliance with state laws and regulations. If the contract does state that, your failure to renew the license would be considered a breach and might lead to further legal consequence.
Also is it common practice for a booth renter to pay the salon fine?
It depends on the state board regulations and the lease agreement. In some states (and I’m almost positive my state—Florida—is one of them) salon owners are responsible for any fines booth renters incur. If you’re in a state like that, the owner may be required to pay it, but that likely won’t stop them from taking you to small claims court for it and/or terminating your lease as a result.
Hello, here is my question: I have worked as an independent contractor the past 14 months located within my friend’s business. We had a verbal agreement that I would make a set commission. Fast forward to last week, she abruptly approached me, stating that “she isnt able to grow her business because my commission is too high, and effective immediately, we must change to me being an employee and reduce my commission by 20% (side note- she already reduced it by 10% for the same reason). I know – veryyy stupid of me to not get our agreement in writing from the beginning. Lesson learned, believe me. But I want to know, is what she is proposing legal?
Thank you for your time.
Lol, this is actually extremely typical around tax season. It sounds to me like she got herself a CPA or a tax professional who knows a thing or two about worker classification and told her that you were not actually an independent contractor and need to be immediately reclassified as a proper employee. So, it’s legal. What she was doing before very likely was not. I’m willing to bet that what you’re seeing is her attempt to become complaint and hoping you won’t notice and hold her accountable for the last 14 months.
Before I forget, I want to mention that as an employee, you must be paid the prevailing wage for each hour you work. So, the legality of the arrangement depends on that as well.
Thank you for your quick reply. Yes, we share the same accountant and they advised her to reclassify me as an employee and cut my commission by 50% (30% is what she’s proposing instead) to “put back into the business.” In turn, she would not require me to pay rent any longer and is suggesting benefits such as funding my future trainings. What rights do I have, if any? Am I allowed to negotiate my commission? I assume there’s not much I can do since it was a verbal agreement, but I wanted to verify that.
If we want to get really technical, you were not actually making 70%. As a self-employed person, you were paying the entirety of your own employment taxes. So, 15.3% came out of your pocket to cover those taxes, reducing your cut to 54.7%. If you have state employment taxes, you were paying the entirety of those also. On top of that, you were paying rent, right? Mathematically, this likely doesn’t substantially change anything except now you are guaranteed income (hourly plus any applicable overtime), will be covered by worker’s compensation insurance (assuming your state requires her to carry a policy), will be covered by her professional liability insurance policy, and will have access to unemployment benefits if you ever need them.
You have the ability to negotiate, but 30% in an employment-based salon is pretty competitive. Operating costs in salons are extremely high. (I wrote about that in a lot of places on this blog, and there are several posts where I actually work the math out line by line, this post is one of them.) Legal compliance is costly. So is product, rent, insurance, licensing, labor, software, marketing, bookkeeping, and the hundreds of other costs that all add up. I can tell you for certain that your friend, if she’s offering you up to 30%, does not fall into the category of “greedy salon owner.”
Structuring compensation and pricing constitutes about 90% of what I do as a salon management consultant. I strive to keep payroll at or below 30-35% of gross sales because anything in excess of that tends to be unsustainable, except in extremely rare circumstances. (For instance, when the owner actually owns the building they operate in outright.) If the math–the paycheck–doesn’t add up for you personally, that’s one thing. She likely won’t have much room to negotiate because, as I said, 30% is reasonable and anything above that puts the salon at a massive financial disadvantage, so don’t take it personally if negotiations fail or result in you guys needing to part ways. For the salon to survive long-term, she’s going to have to make the decision the math forces her to make.
Thanks again for your explanation. It all make sense from a business standpoint. However, what’s difficult for me to swallow is that she stated from the beginning that she was not trying to make money off of me. I was there to work with her, not for her. She had already renovated and had been working in her salon when I moved in. We agreed she would cover the cost of supplies (she estimated 20% of my services), and I would pay our rent. Now here we are 14 months later and she says her “profit” off of me is not enough to put back into the business. I could see her needing to do that to employee the others, but because that was never the plan we had, I feel confused and blindsided.
That’s understandable, but I think your friend was likely being more generous than she could afford to be from the beginning. I’m willing to bet this is hard for her to accept also. That said, you really should have known from the beginning that if you weren’t a formal business partner (by a written partnership agreement), you weren’t her partner. The odds of her being able to grow the business at all when she “was not trying to make money” are slim to none, since she’s essentially having to grow it from her own pocket alone.
Like I said, don’t take this personally. It’s not a personal decision. She’s not complying with the law, so changing your status is an absolute necessity that neither of you can reasonably argue with. Part of this change in status also requires a change in management. If she’s paying half your employment taxes, she is your boss. As such, she will be responsible to an appreciable degree for your financial success. Now, it’s HER job to make sure clients are coming into the salon. It’s HER job to make sure you have everything you need (including the training) to perform well. It’s HER job to pay you for your time; not just your services.
If she’s the one with the majority invested in the business–meaning she took out the loans, she pays the bills, and her name is on the hook when it comes to liability–then she deserves to see a profit. It’s not fair for you or anyone else who invested and risked nothing to act as if she’s not entitled to it.
You friend sounds like an extremely generous person who was probably taken advantage of by bad salon owners in the past. Owners like her often extend absurd offers, especially to their friends and family, only to find out that the offers weren’t legal and/or financially sustainable. I consult for people in the same situation literally all the time and they’re always heartbroken when they realize that what they were doing was wrong or mathematically impossible to keep up. They usually feel terrible about having to go back on their word. I don’t know if that’s the case with your friend, but if it is, please, PLEASE don’t make this harder on her than it already is. Either accept the new deal and agree to give it a shot, or part on good terms as friends.
If you sincerely want to partner with her in the business, I highly advise against it, but be prepared to have the money to invest and the funds to secure an attorney to draft a legal partnership agreement. Should you go that way though, I think you’ll discover really quickly that 80% of gross sales was a completely insane system. Those numbers tend to hit you harder when it’s your money and your assets on the line.
The owner of the salon i am working at pays me 60% commission and takes 40%, doesn’t pay me hourly, but requires I work scheduled hours and provided me a 1099. She said it is because She doesn’t take taxes out of my pay and I am responsible for my own taxes. I said that it I am an employee I should receive a W-2, she will now not talk to me about it.
At what percentage commission are you considered independent? Aren’t employees 50% or below?
How much you are compensated and by what method you are compensated has absolutely no bearing on your employment status. The amount of behavioral and financial control determines whether you’re an employee or self-employed, and in you are most certainly misclassified as an independent contractor and need to be transitioned to a proper employee. If she’s unwilling to comply with the law, you have options. I recommend starting by reading this post and filing an SS-8 with the IRS.
Hi Tina!
So I’m going to try and keep it short and sweet, I work in a salon in a small town, private owner, there are 8 girls. I started as an employee, then moved to being independent and pay rental for my space. But my question is we are required to pay the “salon” a commission of 40% on any walk in or not requested client that comes in. Is this legal? We are in WA State.
Technically, this practice is legal, as there are no laws explicitly prohibiting it. Salon landlords are not required to supply renters with clients of any kind, and those who do typically charge first-time fees for the clients. I consider 40% to be excessive, but there are no laws against it, so the percentage can be as egregious as the owner likes.
I currently work in a salon that the salon owner considers “booth rental”. However, not a single employee has a written let alone signed contract. We all pay a monthly rental fee whether it be for full time or part time. The cost of rent has only been confirmed by word of mouth. As more conflicts arise we have strongly advised her to create a contract for everyone protection. We have also asked to have a team meeting so that everyone involved in the salon is on the same page about what the expectation of the salon are. The owner has briefly stated that she has talked with a lawyer about her “rights” as a salon owner. She has said that not having a contract is actually better. Some of the issues that have been prominent in the salon are
1) not having a signed contract with clear expectations of a rental agreement
2) not being able to wear the clothing we prefer (jeans to be specific)
3) what the cleaning expectations are
4) our schedules (which I will eventually get into greater detail)
As of right now I pay $300 for part time a month. She has chalked that up to basically that I am there 3 days a week per month. The days I normally work are Tuesday, Wednesday and Thursday. She has stated in the past that it did not matter what 3 days we worked (which after reading your blog she has no control of which days I am there if I am paying her a part time amount). Up until recently she told me that because I was there 3 out of the 4 Saturdays in January I needed to pay her more. I then proceeded to tell her that do to the weather and New Years, I did not work those 3 days and made up the work on just a different day. I her words “you are scheduled Tuesday, Wednesday and Thursday, so anything other than that you will need to pay extra.”
I also am the only stylist left scheduling my clients by pen and paper. Everyone else has moved to online booking and I do not plan on every changing. I do this because I am the only one I want in charge of my schedule. I put my personal cell on my business cards so clients can call or text me directly. If someone calls the salon and wants to book with me, I asked that who ever takes the call just take a message and let me schedule it myself since I do not leave my book at the salon when I’m not there.
I am at a turning point in my career, I don’t know whether to try to help her better her business and work environment or just leave. I along with almost all my coworkers are tired of not being treated the same way, being told different things and ambushed with things that we have no contract saying otherwise. I want to know what our rights are as “rental” stylists and legally what I am entitled to be able to do. I love the salon and location but feel like we are being treated like an hourly or commission based stylist.
Not having a contract is only better for her, since it makes it much harder for any of you to prove a breach and allows her the freedom to change the rules at will. If you had written leases, she would have to propose those changes in new contractual agreements.
Her argument that you agree to specific days and pay extra for additional days actually isn’t unreasonable or illegal, so long as you decide on the days ahead of time. A lot of part-time renters are required to choose their days at the lease signing so the landlord can lease the space out to another tenant on the days the space isn’t occupied. However, she did give you freedom to choose your days when the arrangement was made. She can’t change her mind after-the-fact without renegotiating the deal.
None of those renters should be using her online booking system, or any central booking system the owner has control over or access to. You’re doing the right thing there, for sure.
Whether you should stay and help or move on is up to you, and will largely come down to how much you value the salon and the owner. If you feel it might be salvageable and that she’ll be receptive to the assistance, go for it, just know that it isn’t your job to teach her how to do her job. It isn’t our responsibility to enable anyone else’s success. As far as I’m concerned, you and your colleagues have already done a whole lot to try and get her to listen to your concerns and make changes and from what I’m hearing, she has shown no interest in actually doing that, which indicates that she doesn’t have any respect for any of you.
As far as your rights, they’re all outlined in this post and those that are linked within, but essentially, it comes down to this: you rent a space, she leaves you the hell alone so long as you’re paying your rent on time. Anything aside from that, you need to get in writing. If she’s unwilling to do so, consider that a red flag and run for the hills.
Hi Tina!
Right now I am making 60% commission and she takes 40%( no hourly pay). I have to send her a 1099 and pay all my own taxes, liability insurance and business license with the city, yet I feel like Im being treated like an employee.
I have to abide by her dress code, I have to use her supplies and wants me to be a brand ambassador for her company and promote them. I can only use her branded products and sell her retail. My clients fill out her company intake form so she has all their information.
I can make my own schedule and I’m not required to stay at the salon if I don’t have a client, but I’m not allowed to take the same days off as the other girls because somebody always has to be at the salon. We have no receptionist but check all our clients out at the front desk and use her booking system and payment method. (The payment method is a credit card machine that is connected to my personal bank account so money goes directly to me). Every week I pay the salon my so called “rent” but it’s actually a commission split.
I want to move towards a flat rate rental and provide my own supplies, products, sell my own retail and have my own client intake forms.
We have talked about this and they agreed to flat rate but they want any new clients of mine to fill out their client intake form and sign their consent. (Btw I plan on having my own form for my clients) Also every week they want a client report spread sheet of my clients name, address, phone number, and email. This seems old to me as a renter that they would want to keep tabs on my schedule and want all that client information. Also there are cameras and microphones in every room. As a renter can I ask to have privacy in the room?
I would love your thoughts on this situation, thank you!
WOAH. What the actual fuck. Okay, so I’m going to point out some things, then I want you to read this post. I don’t think any authority (federal or state) would disagree with my assessment that you are misclassified. I’m a specialist in this topic and soon will have the credentials to back up my statements (so no salon owner will be able to even attempt to argue that I don’t know what I’m talking about when it comes to this subject), but yeah, this is really, REALLY bad for them. If they were my consulting clients, we’d be working with attorneys to immediately correct this and settle out any potential legal issues.
Financial Controls
“I am making 60% commission and she takes 40%”
“We…check all our clients out at the front desk and use her booking system and payment method.”
“Every week I pay the salon my so called “rent” but it’s actually a commission split.”
“…every week they want a client report spread sheet of my clients name, address, phone number, and email.”
Behavioral Controls
“I have to abide by her dress code, I have to use her supplies and wants me to be a brand ambassador for her company and promote them.”
“I can only use her branded products and sell her retail.”
“My clients fill out her company intake form so she has all their information.”
“I’m not allowed to take the same days off as the other girls because somebody always has to be at the salon.”
“…they want any new clients of mine to fill out their client intake form and sign their consent.”
“Also there are cameras and microphones in every room.”
Read that post I linked above and go over those 20 factors. Compare them with the facts of your arrangement right now. The cameras and microphones likely aren’t legal, depending on the state you’re in.
Tina,
My wife is a booth renter, however she signed a contract (that I’m trying to get a hold of but haven’t see yet) that basically required her to sell $XX dollars of the owners product. If she sells under that amount in a month her rent goes up for the following month. I told her even though she signed the contract its null and void because 1. They cant require you to do anything (more or less) and 2. the value of the space she is renting does not change monthly. On top of that a few weeks ago they told everyone that the sales goal has gone up another $100, although that part was verbal, nothing in writing. She does get commission for what she sells, but I still believe they are in the wrong. The reason its become an issue is because she missed her sales goal last month for the first time and they left her a letter telling her that both rent would be $10 more per week next month.
What do you think
I think, for starters, that it likely won’t be null and void (assuming there is a written contract that your wife signed that details that the rent amount is contingent on sales). While the landlord can’t require any renter to do anything, they can incentivize renters to contribute to the facility’s boutique sales by offering lower rent to those who make up the difference in retail. That isn’t an uncommon or illegal arrangement. It’s considered a way to offset the tenant’s rent. Tenants who choose not to participate are typically given higher rent rates than those who do.
That said, the owner needs to put those increases and changes to the program in writing, as that essentially constitutes a raise in the rental rate. Those types of changes need to be agreed to before they take place, so the renters will have the opportunity to negotiate it or find a new place to rent.
Hi Tina –
It’s become very popular that Salons are running their business housing both commission and booth renters that are hair stylist? When they do that, are the booth renters 10-99? Also, it’s that even legal? Also, what are the rules for selling products to the clients of those booth renters?
Salons have been renting and employing in the same facility for as long as I’ve been in the industry (probably longer). The booth renters in those salons are NOT 1099. No renter is 1099, anywhere. The renter is self-employed and must supply the landlord they pay rent to with a 1099 at the end of the year. For the renter to be receiving the 1099 indicates that the salon landlord is collecting and controlling their revenue, which isn’t legal or appropriate.
As for selling products, there are no laws. You have to depend on what the terms of your lease agreement state. The salon owner cannot force you to retail products or tell you which products you can/can’t use, but other than that, they can offer you lower rent amounts in exchange for selling retail from their boutique. They can also prohibit you from selling products that conflict with those they sell through their boutique. Those practices aren’t illegal.
Hi there,
I’m wondering if booth renters are entitled to advertise their business name and services outside on the store front.
That depends on the terms of the lease agreement. If the person who owns the rental facility allows it, you can, but you aren’t legally entitled to by any federal law. Commercial landlord/tenant laws are largely nonexistent, so you have to rely on contract law–specifically the agreement you signed.
For the last 6 years I’ve worked as a commission stylist. I get 40%, the owner gets 60% and she takes out a backbar fee. Our services are broken down as “parts and labor” the back bar being the parts. If a service is $100. There’s a $5 backbar fee. Leaving the service at $95. That’s what we split the commission on. We are required to be at the salon set hours. For the majority time that I’ve worked there I have received a w-2 and a 1099. My tips were on my 1099 and the w-2 was my commission. This year I stopped receiving a 1099. All tips are now cash only and need to be reported. We recently were also required to clock in and out. However I don’t see the point as we are compensated on our hair services. The rule at the salon is you’re paid either commission or hourly depending on which is higher. Well our commission is always higher than our hourly. But I’m still obligated to stay I’ve without a client. Technically I am clocked in. But I never see that money since my commission always exceeds my hourly. Is this illegal, or just sketchy?
The way the product fees are accounted for is legal, but if you’re a W-2 employee, employers are required to pay taxes on your tips (so those tips should never have been put on a 1099 to begin with). This article explains in detail why you’re required to clock in and out, but you can find more information here. Your situation isn’t just legal, it’s SUPER legal. So long as your employer ensures prevailing wage compliance (which they are), you’re required to obey their directives or forfeit your position.
I have a kiosk at a mall in NJ, and the health inspector closed it saying I need a license. I only offer eyebrow threading services. Can they close my kiosk? And what happens if I open it again without a license?
You need to immediately read NJ’s cosmetology regulations and learn what you need to do to get your business in compliance. Consequences for violation can be extremely severe and may include fines, misdemeanor charges, and even imprisonment. DO NOT reopen that kiosk. Jersey, in particular, has strict regulations to ensure public safety. You really don’t want to try them.
Do you have updated information on the laws on Booth Rental in California? I’m a new salon owner and would like to provide new estheticians information on it no longer being okay. Thank you in advance.
You can find the post about Dynamex here.
My one year lease with Sola Salons does not state anything aout me terminating the contract early. It also does not state any fees if I do decide to terminate the contract early. All in all, there is NOTHING in the contract we both side stating any information about early termination on my side.
There is a part of the contract that states Sola can terminate our contract early if I were to violate any rules.
What do I do if there isn’t information about me terminating the lease early? Am I obligated to pay any early termination fees that aren’t stated in the contract?
If it’s not stated in the contract, it can’t be enforced. In order for you to be held to the terms of a contractual agreement, you have to a.) be informed, and b.) actually agree. Since you’ve done neither, they’ll have a very hard time enforcing a nonexistent termination fee rule.
Hi there!
I have a mixed salon, employees and currently one booth renter. The booth renter is wanting to have a sandwich board outside the store front with her business name and contact information. She’s quite adamant about it. Should I allow this? My concern is that it would be confusing to potential customers to have two different business names outside as well as people coming in to inquire about her services when my staff are not trained to talk about them. I’m also concerned if I end up having more booth renters, how many signs am I to allow outside. Should I let her have some form of advertising at all outside the store front or in the windows? I’m just looking to be fair and for some reason cannot think about this clearly.
Thanks very much!
You’re not obligated to do anything, legally or otherwise. As a renter, it is her responsibility to acquire her own clients.
(Really, if she felt the need for a sandwich board, she wasn’t ready for rental to begin with.)
Personally, I would not allow it. Your offer included a space to do business from. That’s what her rent pays for. She isn’t paying for frontage. It sounds to me like she doesn’t understand what rental entails. Self-employment means being your own boss and taking ownership of your business. If frontage were that necessary to her, she should have negotiated for it before the lease was finalized.
Is it legal for an employer to take a 10 percent “house fee” off the top of your earnings before applying your commission rate? This fee is said to cover costs of running the front desk, housekeeping, and assistants. It doesn’t sound like it from what I read but at still unclear.
Are you a renter or an employee? If you’re a renter, the landlord (who is not your employer) should not be taking anything from your wages. If you are a legitimate employee, so long as you were made aware of the deduction before you accepted the position and/or performed the work, it is legal so long as your paychecks meet or exceed the prevailing wage for each hour you worked in the pay period.
I am a salon owner with booth renters. Do you have any advice or links that deal with the “common area”? And as far as not setting up cleaning duties, what would you say to a renter that leaves dispensary area dirty, never helps with washing and putting away of the towels, etc…. Is this something that can be addressed in the lease agreement at all? So far I haven’t needed lease agreements but maybe they could help if these things could be addressed.
You can (and should) address common area rules in your lease. That doesn’t represent an overstep of your authority. Because those areas are shared, it’s reasonable to expect the renters to clean up after themselves and leave the dispensary as they found it. You cannot require them to participate in other chores (like the facility’s laundry, cleaning/stocking the bathrooms or reception area, etc.).
Hi! I’m living in wv and my boss does half booth rental/independent contractor but I believe someone would need to see the “contract” I haven’t signed yet but am supposed to sign before I sign it and I don’t know what to do please help I feel that a lot of this isn’t legal
You need to speak with an employment law attorney in your area before you sign anything. I’m not qualified to give legal advice, and even if I was, anyone who isn’t your attorney can’t be relied upon to give you personalized legal help. The odds are good that the situation isn’t legal. This site provides more than enough information for you to verify that for yourself, but if you need further help, you really do need to find someone qualified who knows your specific situation and your state laws to help you on an individual level.
Hi, I am going to be leasing a salon & want to hire people to rent chairs. My question being new to running a salon is, how do you have set salon hours where legally renters can come & go as they please. I want to make sure I start out on the right foot & am not unknowingly doing wrong by my renters. But I also can’t wrap my head around how I would know when I would have people working in the salon & at what times. Would I just be limited to appointment only based hours? Or is there a way of legally writing in the lease agreement what hours they are willing to work? & during the salons operating hours. I understand I couldn’t dictate when they work but just am confused on how to make sure the salon is occupied/staffed for business on a schedule.
Hi Reena!
First, it’s critically important, as a new salon owner, that you train yourself to use the correct terminology–always. For instance, you can’t “hire” renters; you “lease space” to renters. You also don’t “run a salon,” you run a rental facility. Because you’re new, I’d recommend downloading The Salon Landlord’s Toolkit. It will help get you up to speed on what facility ownership entails and has a tool to automatically calculate your rent, along with some other resources you’d definitely benefit from.
As for the hours, landlords have no authority to require renters to commit to a schedule in advance, nor require them to stay during those hours. Because they’re self-employed, they’re completely autonomous and can come and go as they please. To ensure coverage, you’ll have to hire someone to either manage the front desk (to intercept clients walking in) or keep a professional on staff, but keeping the salon staffed isn’t your responsibility. Your job is to ensure the facility is safe, compliant with local regulations, and available during the hours stated on your lease agreements. It can be hard for new landlords to understand, but the salon’s clients aren’t your customers–the tenants are. Your job is to serve them. Their job is to serve their customers.
When you have time, I also recommend reading all the posts I’ve written for salon landlords and microsalon owners. We also have a community now, where members can post questions and/or read other discussions. It’s super brand new, so there isn’t a ton of content there, but both The Community and the VIP areas are being expanded daily.
Hi, New to your page and was showed by fellow stylist. I was recently working at a blow out bar and was hired as a free lancer. We are paid hourly, I had to sign a non compete agreement, they have us on a consistent schedule and if we block our self out because its slow or we have and emergency we get written up.( we have to ask permission to leave early) i was asked a few time not to block myself off for lunch breaks (even on day i offered to work 11 hours) Is this worth reporting?
Btw love your podcast already after listening to the first one, you keep it real<3
Thanks! I actually have a ton of overdue episodes going up today, and now that my last book has been published and a ton of other big projects I was working on (like online courses and our membership club) are done, I’m going to be releasing episodes more routinely. Previously, it was the last thing on my list of priorities, lol.
As for reporting, it’s worth it. You were clearly not a true freelancer, and as someone who was exploited by an employer, you have nothing to lose by filing an SS-8 with the IRS and letting them handle it from there. You shouldn’t be paying self-employment tax when you aren’t self-employed, and salon owners who violate tax and labor law deserve absolutely no leniency, as they make it harder for us that do comply and work hard to provide valid career opportunities to compete.
Hi Tina, first of all THANK YOU for such an amazing website! What a godsend!
My question is this: can a salon owner/business publicly refer to the self-employed, chair-renting stylists as “staff”? And in general, refer to all the stylists as if they were employees (even if the actual word “employee” isn’t used)? If not, how do I go about reporting this?
Furthermore, the issue this relates to also includes the verifiable fact that no contract was ever drawn up for the stylist in question (the salon owner said so in texts). So the public statements made about a “staff member” referred to someone who never signed a contract at all, for anything. Is this in breach of law, like fraudulent misrepresentation? And how does one report it/file against it?
Personally, I HATE when salon landlords do this. I’m constantly correcting them when they refer to their renters as their “team” or “staff.” While it might not rise to the level of breaking an actual law, it definitely is a misrepresentation of that renter’s relationship with the landlord, so I would say something about it to both the salon landlord and any clients who bring it up. I’d also remind the landlord that while I’m paying her to rent a space within her facility, I am her customer, and she’d be well advised to remember that a.) the relationship we have is purely transactional, b.) that she has no authority over any of her tenants, and c.) her attempts to represent the situation as anything other than what it is will very likely result in her losing all of the customers (renters) she relies upon. This isn’t 2005 or even 2010 when renters didn’t know any better or have many choices. They do know better and they have a TON of choices, so landlords like her need to get with the times and fall in line.
Hi Tina,
I love your articles and was wondering if my friend, who owns her own Aesthetics business, should be a tenant or an independent contractor if she has her business in a room inside of a salon in CA?
She is a tenant. Independent contractors are self-employed freelancers who perform one-time, contracted jobs. If she’s renting space within a salon and operating a business from it, she is a self-employed tenant. These are federal laws and apply to all states, but *especially* California and/or Canada (CA could mean either)—both have stricter worker classification laws than our federal statutes.
Hi Tina,
You have been such a help clarifying the difference between an employee and being self-employed. I am a booth renter at a barbershop. This article and a couple of your other ones have made it very clear what rights I have as a booth renter and what my “boss/landlord” can and cannot have control over. My “boss/landlord” 100% things he is my boss. I pay him Rent weekly. I pay all of my federal and state income tax myself, I have my own commercial liability insurance, I buy my own product and Backbar, and pay my own sales tax for the product that I sell. I am responsible for running my own business. But I don’t feel like I’m getting all of the luxury of running my own business that I should be. Here’s a bit of back ground info. There are only 2 barbers in the shop. The owner. And myself. We live in a small town. Him and I take care of all the clients that walk through our doors. He allows me to take walkins, and he allows me to take appointments for myself over the phone. Really, he needs me there because he is fully booked and I am taking the overflow of clients that he can not. We work well as a team. I know that he is being more than generous by doing this. But he does not allow me to make my own schedule or take time off if and when I need to without asking him for permission. He doesn’t ever want me to change my scheduled hours. I want to create the schedule that I would like. I would like to book my own clients, give out my own phone number, manage my own book and manage my own hours. I do not want him to book me appointments, I would like to book appointments myself so I can create the schedule that I would like even if that may change week to week. He wants consistency, he does not want my schedule to change week to week. I’m afraid to tell him “tough shit you are not my boss” because he gives me the clients that fill my book when he doesn’t need to, being just my landlord. And just to top it all off we do not have a written contract. I’m nervous that me, being a renter, I might screw myself in being able to fill my book like I do now, if I try to have my cake and eat it to by asking to create my own schedule. The very first thing you said in this article is that you can’t be “half” anything but that is exactly what we’re doing. It’s a very messy and I don’t know The right way to approach my coworker about this. Please help! And thank you so much for your time in advance!
I recommend having a frank conversation with him where you explain your role and his, and why it’s in his best interests to release some of that control. You aren’t his employee or his business partner, so you can’t be obligated to obey his commands or serve his preferences. It’s also in both of your best interest for there to be a written agreement, so I’d have that conversation in conjunction with the reminder that, while you’re happy and wish to stay, you’re not paying rent and self-employment taxes to be dictated to like his minion.
Ok this is very helpful. Should he or I be the one to write up the lease agreement?
Really, it’s best if a qualified attorney with experience in commercial landlord/tenant law writes it, but you can each outline your terms and get negotiations finalized before submitting it to the attorney–that way, you cut down on the time (and expense) required to get the agreement written.
Hi Tina. It’s been a couple months. I had the meeting. I put my foot down. I was waiting on a writer contractor that the owner said he’d have to me by June first. Things were fine. Till tonight the owner of the barbershop called me and “firer” me over a phone call. He told me he has spoken to a lawyer and he does not need to evict because we don’t have a contractor. I need to get my things before the shop opens get out or he’s calling the police. What do I do!?! Is this legal? Does he still need to legally evict me even though there’s no contractor. Hope you can get back to me soon. What a night mare. ~Marisa.
LOL, I doubt he actually talked to a lawyer. Even in the absence of a written contract, you have established an ongoing common law lease agreement. By paying him rent and being provided the space, you established an arrangement that doesn’t get treated any differently than a formal written agreement (at least, not in any state I’m aware of). I would recommend calling an attorney of your own–someone familiar with either employment law or commercial landlord/tenant law–and getting a consultation. You cannot be “fired,” and the sudden eviction may not be legal in your state if there are laws prohibiting it.
Thank you for your help again.
Hi, I have a few questions for you. I own a tanning salon in San Diego,CA providing uv/spray/custom airbrush. I am owner operator so its just myself in here 7 days a week. I have a room that I have been renting out to an esthetician who provides facials/chemical peels and eyelash extensions. I am located 2 blocks from a military base with an amazing location for my store front. I have thousands of customers that are all walk in and no appointment necessary. With that being said she has been here for a year and gets a full clientelle base off of MY customers which i’m ok with but I’m very new to having an independent contractor in here, so I’m not sure on what I should be getting from her or expecting her to have. Shared expenses as far as rent/electricity/bills not related to JUST my business are over $7,000. per month and for the past year she is only paying $150 per week. Again MY customers have filled her clientelle base so she has not needed to do any type of marketing and has up in the range of 30 plus appointments per week and only works 4 day. What should I be asking for rent? My monthly CAM charge for the location just went up last month $1,000. on top of rent as well so clearly I need to be collecting more.
If you know your square footage, dividing up your rent and expenses so she’s paying for her portion of that space shouldn’t be difficult. She’s renting out a room–not the entirety of your space, so keep that in mind. Her rent should be proportionate to the area she’s occupying. I’d say she’s paying far less in San Diego than she would be paying elsewhere, so I agree that a rent increase is due.
I am a newly licensed esthetician. I was just hired at a place that knows this. They told me that they are going to pay me an hourly wage but I will be off the books and I will have to get my own insurance(not health) to cover me while working in their establishment. They are going to be training me as well.I know that it is illegal to be off the books. They told me that their accountant said they are “almost there “ and that they will soon be able to put their employees on the books. The owners are registered nurses(husb and wife) and I’m concerned with being taken advantage of and also if I’m going to get stuck paying taxes at the end of the year if they give me a 1099. I’m not to savvy on that stuff. I need some help I don’t know what to do . They are also telling me that I would be working the open to close which is 10a-6/7p shifts 4 days a week .
I would recommend telling them to tell their “accountant” to get their ass in gear, and not working for them until that’s done. I don’t know of a single actual accountant who can’t manage to get W-4s and put employees on a payroll within hours (even an entire team of them), so I don’t buy their excuse.
Hi Tina, through a business group a fellow therapist left your information in my post. I’m so glad they did and grateful for your years of knowledge base. You have helped and advised so many! I am a massage therapist. Recently I have been approached by my chiropractor. His massage therapist of 10+ years abruptly quit giving him a weeks notice. Without knowing my current rental situation. He has offered his available massage room and briefly discussed his prior agreement he and his massage therapist had. She was an independent contractor with a 50/50 split, his receptionist scheduled her appointments, collected all payments, they were to refer clients to one another and laundry service were outsourced at his expense. Also the option would be available for him to bill insurances for massage therapy services. All she had to do was complete soap notes. Following he did state that he was open to any other offers. The massage room would be furnished with table and artwork. Unsure about linens and assume all other equipment used I would need to provide. My current lease is looking to end within the week. I”m not really looking to relocate my office, but would be open to contracting services within his office as an independent contractor. 50/50 split as you know is more 35%. I assume the split is on all clients seen in his office. What I’m asking is in this situation what would be a responsible counter offer and to make sure I’m being treated as and independent contractor.
It sounds to me like he doesn’t understand the role of a proper self-employed professional, or he wouldn’t be bent about the short “notice” he was never legally entitled to. From where I stand, that’s a big problem, as there are a ton of control factors in this scenario that shouldn’t be happening.
If you’re in California, no arrangement with this chiropractor (other than gainful employment) would be legal. If you aren’t, I’d advise you to decide on proper freelance terms (which probably aren’t practical in that environment). Honestly, it sound to me like he needs to just hire a massage therapist or rent the room out. He’s wanting to have and eat his cake, which isn’t how that works.
Thank you so much Tina. I was thinking the same thing too. I wanted to see if there was a way in which free lance could work within this situation. Similar to contracting services with a company for chair massage. I agree, I had thought about renting as an option as well. I know I have worked with chiropractor’s in the past like this and they had paid me a flat rate fee.
My salon Owner recently has decided to go all commission after 8 years booth renting in this salon. I understand her reasonings for wanting to go all commission, i definitely see the benefit for her… but for me im not so sure. She hasn’t really prepared anything for us to review showing us the benefits we will be receiving. She has decided she will make the change in 1 month July 1st. Im having mixed feelings with this whole situation because i just got established as appt only and don’t really know how i f eel about having to wait around for walk ins again for 60/40. i have spent the last 10 years building my reputation as a self employed booth renter…by switching to commission she is requiring 4 days a week minimum, 2 saturdays and month and 1 monday. (i love my mondays) Being that i have been self employed i often work on many (off days) because i work with a lot of brides already, that being said what happens when i schedule a bridal party for myself? would that even be aloud? would i have to give her a percentage, or would that even be able to happen if i was an employee?? Im just not sure if this is the right step for me. this is the only salon i have worked at, but maybe this just means its time to branch out on my own. Help
She needs to be informed that “all commission” isn’t legal. She should also be made aware that this arrangement will lead to her established renters (like yourself) walking out, especially if she can’t demonstrate any benefit to them. I can’t speak to the terms of the arrangement regarding bridal parties and working off-site (because there’s no contract yet), but I’d advise you to find another place to rent. If she doesn’t plan to compensate or classify anyone legally or provide them with the kinds of benefits that make employment appealing, the arrangement likely won’t benefit you much at all. You’ve put in serious time and effort building a reputation and a clientele. I wouldn’t be handing that hard work off to anyone without serious assurances.
Thank you so much Tina! I actually printed this whole article out and gave it to her! I felt like she needed it for her own benefit. I’ve already had 2 other offers and I’ve been really looking into my next move! This article has helped so much and been so informative! I’m still waiting on her full offer before I make any moves, I’ve been there a long time and would love to keep our friendship whatever my decision is, I have to do what is best for me ultimately! Thanks again for all of the info and advice!
So today I had a sit down discussion with my salon “landlord” after a mandatory meeting. Yes, I’m a renter and am being told to go to mandatory meetings as well as do salon cleaning chores (I have my own room but she wants the whole salon done). I originally was using the salon booking app but realized that was mistake having my client info on there so I switched back to the one I’ve been using years before I switched to this new salon. She didn’t like that very much. Which is why I wanted to have a discussion with her. She also has “independent contractors” there who are also told to go to mandatory meetings, clean, and adhere to a schedule. So I wanted to present her with the facts that you’ve laid out and hopefully fix these issues. The salon has been open for two months so I figured she was just a clueless new salon owner. Nice individual who just doesn’t know any better. Well, I was so wrong.
So I approached the situation in the way that you outlined in the How to Hold others accountable’ post. And then that nice, clueless new owner, got really pissed haha
I laugh but honestly I’m feeling pretty defeated right now. Rather than listening she just proceeded to make fun of me. I tried for nearly an hour to get something through but all she was interested in doing was belittling me. Eventually I had to leave the situation because it was obviously a waste of time and quite frankly I wasn’t interested in the abuse anymore.
So now I’m not sure where that leaves me. Obviously I need to start looking for another place to rent (she didn’t give me a notice but I def want to get out and give her my own notice as per our termination agreement in my lease as soon as I find a new place) but what about holding her accountable? I understand I can file the ss-8 but isn’t that generally for employees who are misclassified as independent contractors? The other girls who are not renters are definitely being misclassified but I can’t file on their behalf can I? There’s also the form 3949-a and I can report for withholding I guess but I’m not sure how that even works. Make a complaint with the DOL maybe (I live in Tennessee). I don’t want to be petty either but I also don’t want her to get away with the flsa noncompliance and while I’m there I’d like some quiet enjoyment of the property I rent. Should I walk away and take the L at this point or is any of the above actions (or any I may have missed) worth pursuing?
Sorry about the long post Tina, by the time you read all this it’ll be goodbye tummy hello mummy time 🙂
I’ve been on maternity leave, so I’m sorry for the late response! (You’re right. I had my baby on the 30th, so I was *just* out of the hospital when you posted this. The recovery has been unexpectedly rough, but I guess passing five people out of your body in the span of six years will do that to you, lol.)
“And then that nice, clueless new owner, got really pissed haha”
This made me laugh out loud because it is so very, VERY typical. Ugh. I’m sorry that happened to you.
All of the things you outlined–do them. I recommend filing complaints with anyone who will take them. You’ve done your due diligence. You gave her a chance. She can’t fake ignorance now.
As for the SS-8–you were being told to go to mandatory meetings, required to do salon chores, and she objected to you moving off her central booking system. Whether or not it continued, at one point, you were being treated as an employee. You’re just as eligible to file that SS-8 as anyone else.
i have been working in a barbershop on and off for 35 years. 7 years ago it was taken over by a new owner. there is absolutely no contract that have been signed. he tripled the rent. (after he told me he would always keep my rent what it was) he has made the shop into a two shift shop so i can only use my station for 6 hours on the days i work. if i need to come early i cant. so he is getting double rent on the space he is leasing. he also charges people double rent for various stupid reason. if they aren’t in dress code which he shouldnt be able to dictate either. so if there is no contract can he just tell me i can no longer work.
Landlords are legally empowered to change the terms of their rental agreements however they like, so he’s not doing anything illegal.
In the absence of a written contract, you would have a common law lease (typically). When you exchange money for space, the landlord generally must provide you with the space for the duration of the term, or evict you. Should they evict you, they’ll have to either allow you to work out the remainder of the term or refund any excess rent money. While your area may not have any local landlord/tenant laws in place for commercial arrangements, you’d have grounds to pursue him in small claims for theft if he didn’t return the money.
Hi Tina, I’m so glad I found this page! I am a salon owner in Tennessee. In my salon I have renters and commission stylist. We are an open area salon, (not separate rooms) and share the common areas. I think am good on what classifies them as booth renters. They come and go as they please, all have keys, and charge their clients whatever they want. I do ask that they clean up after themselves on the floor and in the common areas. I do supply all of the salon equipment, mirrors, station, stylist chair, etc. Not their personal equipment. We do handle their book at the desk, but it’s their option, I do not handle their money. They choose to let have the front desk handle the phones. They of course can and do make their own appointments when a client contacts them. They pay me 15. a month to have our booking app on their phones (optional) because I get charged for it based on the number of people using it. They also use my backbar and my towels which I supply and launder. So they use my receptionist, backbar, equipment and towels,etc. I also clean the salon myself which does include their areas. I don’t wipe down their stations. They pay 250. a week with one week free for vacation. Which is the norm for my area. I pay 15% retail commission and ask that they not sell their own. So I think I’m good with classifying them as renters, right? My biggest 2 concerns are, 1 renter is commission based 70/30 because she wasn’t sure about the commitment of 250 a wk and the commission offers her a safety net, I do not handle her taxes. And the commission stylist, they have the option of being paid 50/50 and using the salon’s color supplies or 60/40, (them 60) and using their own. Some of them prefer a different color line than I use, thats why it’s a good option for them. I supply all the backbar. They come and go as they please, take off when they want as long as they let the desk know so clients can be contacted and they all have keys. I do their payroll which includes collecting their tips, (I don’t keep any of the tips) and I pay my part of their ss. .0765% They get 15% of the retail they sell. They do supply their styling products, again because they all prefer something different. I ask them to use what we sell and for the most part they do, but some have other products too. I also have someone that sweeps and does the laundry so they (we) don’t have to and can just attend to our clients. (That goes for the renters also.) We have a 3 receptionist to cover the 6 days a wk we are open. So none of them have to answer the phone unless the receptionist runs to the bank or something, never more than 15 minutes. I did not know that the commission stylist were suppose to make minimum wage and/or commission. I haven’t done that before, most of the stylist easily make that, but a couple of the younger ones, who choose to only work p/time, don’t always. Also they all pay the 15. a month for the mobile app but it’s optional. That and the fact that they supply their own product is what I’m concerned about. There are 7 renters and 6 commission plus myself and I have always tried to run the salon like a salon I would want to work in, (yes I know you hear that all the time) thats one of the reasons for the freedom of their schedule and the support staff.
I have owned this salon for close to 30 yrs, the 1st 15 we were much smaller 5-6 of us. Then I moved to a much better location and had many more stylist wanting to work with us. When it was smaller the salon paid for everything with no charges to the stylist period (the product waste was unreal) and the pay was 60/40. I knew I couldn’t afford to do that with up to 9 commission stylist, thats why it evolved to the way I pay now. I work behind the chair and thats my paycheck with any other money after payroll going toward the salon overhead, so I’m definitely not getting rich! I have never wanted to be greedy so I want to know what you think. Have I been by them suppling their own products and paying the 15. for the app? I know now I need to start tracking hours and will do that asap. Although I really think 99% if not 100% of the time they all make at least minimum wage. I do want everything to be legal and fair!
Thank you in advance for any help!!
Hi there!
It sounds to me like you’re doing almost everything right and the vast majority of your professionals are legitimately self-employed. All of the additional amenities you offer (book management, reception, the app, etc.) are not mandatory and are charged for. Supplies like towels and backbar are considered practical amenities that most salon landlords include in their rent, so that’s also totally fine. Like you said–they aren’t required to use them if they don’t want to.
You’re also within your rights as far as the retail competition is concerned, as well as the common area requirements (cleaning their stations).
As far as the commission renters go, I’d recommend changing the terms of that arrangement a bit. Instead of a straight 70/30, 50/50 or 60/40, cap the rent at the weekly flat rent amount. (So they’d pay a percentage OR the weekly rent amount, whatever is lower.) I’d also recommend putting a time limit on that offer–a max of three months. This makes the offer a proper incentive and ensures that the renters are the beneficiary of the arrangement. While you’re walking in a gray area, you’re unlikely to be penalized for this, as you are clearly not exploiting the self-employed professional.
The renters you’re paying taxes for and compensating like employees–I’d recommend either fully employing them or stopping that practice entirely. That’s crossing over the gray area into a place that looks a little too much like misclassification. While you’re likely in compliance with the federal wage laws where those workers are concerned (since it’s pretty hard to make less than minimum wage in Tennessee), you probably wouldn’t get a pass when it comes to federal worker classification laws. Sometimes renters like to have their cake and eat it too. In this situation, you’re taking on all the risk for very little benefit. I’m sure they’re grateful, but I personally wouldn’t put myself in legal peril for anyone.
Do I have to be licensed by the state (FL) to be a freelance nail artist if I never work in a salon?
Yes. It is illegal to perform nail treatments of any kind for compensation if you aren’t educated and licensed by the state.
Hi there, i live in VA and I recently became aware of misclassification between w2 and 1099. I work at a salon, receive 1099 subcontractor, but to my knowledge that’s the same thing as an independent contractor? I do not have a business license, my boss/owner says her business license for the salon covers all of us and she pays for that and those taxes. I only receive 44% commission, but am expected to be there 30mins-1 hour prior of my first client, and even then if i don’t have anyone. Im all for a call in or walk in but it’s very rare. We also have things we have to do like cleaning, and inventory. We also run to the hair store for products, like colors and etc. Now I’m wondering if this is even legal, and if so how’s she’s doing it. After doing my research, even if it’s legal, i don’t think it’s right or fair? I don’t get any taxes taken out and get paid via check for the owner.
It isn’t legal. She’s following a very typical industry practice that most salon owners (even those with good intentions) don’t understand the illegality of. I recommend reading this post.
Hi! I’m a booth renter, and this week has been stressful. The woman who rents us the booths has us paying rent weekly, we always pay her full and on time but this week is end of the month and she failed to pay rent for the salon as well as failed to renew her contract so the salon was closed and we were not able to work. Do we booth renters still have to pay the week’s rent?
No. Do not pay the rent. You are paying in exchange for a space to work. If your landlord isn’t capable of fulfilling her end of the deal, you aren’t obligated to fulfill yours. I’d also highly recommend finding a new place to rent, ASAP. Preferably somewhere with an owner who is responsible enough to pay their damn bills.
Hi Tina,
I’m a booth renter (I pay weekly booth rent) in CA and was recently “fired” without reason or notice a week ago. The owner stated she didn’t need to give me a reason or notice and claimed her contract with me proved that. It was not in writing either. She brought her husband and they cornered me in the middle of the salon in the middle of the day like some criminal they had caught doing something awful, which I am in no way at all.
Her “contract” /lease agreement is such a mess and is from 2015 and I never received a copy despite asking for one repeatedly until the day I was forced to leave. In it she has a code of conduct, dress code, mandatory salon meetings and has me mis characterized as an independent contractor as well. She has tried to force me to answer phones even if I am super busy with clients so she can not hire a receptionist and when I respectfully refuse she gets angry, she has tried to forbid me from being able to answer my cell phone while in the salon (I’m a single mother with kids at home) and she over the past year has harassed me endlessly about using a giant dust collector she bought, stating it’s “mandatory” to use it. She loves to tell me everything is “mandatory”. She “fired” me in my opinion because I know she can’t force me to do these things and I respectfully refuse and so she thinks I just have a bad attitude. She also forced me to use and purchase business cards with her logo on them. She’s now spreading it around that I’ve been let go “due to breach of contract”. While still never telling me what I ever did wrong or what I possibly “breached”. Which if I’m not mistaken is slander.
I’m having a hard time finding the labor laws that prove this contract is invalid in Ca and I want to be able to show my former coworkers that are now afraid this can happen to them… I’m not crazy here right?! This contract is completely invalid right? Now it’s right before Christmas and I’m thrown out of a salon for literally knowing my rights and saying no to things she was trying to force me to do. Not to mention having my integrity smeared all over town. I’m so stressed and frustrated. What’s your advice?
By the way, your website is a godsend and we are all so blessed to have found you and all your hard work! Thank you!!!
Hey Christina! My first recommendation is to contact the DIR (you can do that here). They’ll be able to advise you on next steps–but you’re entirely correct. Your salon owner exerted an inappropriate degree of control over you, and people like her are partially to blame for the new slew of laws in California restricting the use of the independent contractor classification–laws that nearly illegalized booth rental there last year. (If you’d like to find the actual laws, start with that post–then Google “California misclassification” and check the headlines. This is a HUGE topic in California. New developments happen almost weekly, but it’s needless to say that California has absolutely had enough and is ready to knock all this shit over. You can also read their own guidelines for the beauty industry here.)
Hi! I’ve been at a barbershop for about two and a half years. I am 1099, but definitely treated like an employee. I get a certain percentage of the haircut, but there are dress code rules, certain ways we have to perform the service, we have to clean if we’re not busy, we can’t leave if we don’t have a client, we have to arrive 30 minutes before the shift to set up, and stay about 30 minutes after our shift to clean up. The owner is very stingy if we take time off. We’re expected to work more to cover the hours that we’ve missed if we take a day off. We do however get access to our backbar, with a certain percentage with the products we sell. We use one booking system for all of our clients. I understand not soliciting to clients, but when I’ve been cutting their hair for 2 and a half years, are they technically mine? I’m wanting to leave the shop, but I’m not sure if I’m able to take these clients with me.
It sounds to me like you’re very clearly misclassified, which renders the solicitation argument moot, since you aren’t an employee of the salon to begin with (you’re a self-employed business owner, according to how they’ve classified you). They can’t evade employment taxes and expect you to obey and behave with the loyalty of an employee. It doesn’t work that way.
Hi Tina! This website is AMAZING, thnx.. anyway
I think my boss isn’t paying me all the money I made, but I can’t prove it because there is no way I can see exactly how many services I’ve done, how much retail I sold etc.. is this legal? Shouldn’t the employees be able to see that information at any time?
Absolutely. I wrote about that here and here. I *highly* recommend keeping records yourself as well, demanding detailed pay stubs, and cross-checking to ensure accuracy.
Hi Tina,
So I work at a spa in IL and I have filled out a 1099 and the owners have classified me as an independent contractor. I think that they are misclassifying me. I have brought it up to them but they brushed me off. I will most likely be moving forward in my process with the IRS and DOL filing the SS-8. But I have another question for you. So we started to sell packages. For example a facial series of 3 for $555. Now I have recently been selling these and all my clients have tipped me on credit card. I received a $200 tip from selling one package. On my next paycheck I did not see that tip. When I went to the owners and asked them why the tip was not on there their response was this. “We are going to hold on to the 200 and distribute it the way we see fit.” “Every time the client comes in for that series you will receive a portion of your tip.”
I am just a little confused as to is this legal? Can they just decide when to give it to me and how they will give it to me? They said they have every right to decide when I get that money. I asked them what the reasoning was behind this decision. They told me that because its a series it works different. If I do 2 out of the 3 and then I decide to quit and another esthetician has to finish the series then they will give the rest of the tip to them. They said they are assuming that the client will not tip every time they come in for the facial. So kind of like tip pooling in a way. But we never signed anything saying we would agree to this. What should I do? say nothing and let them decide what to do with my tips? or say that this is illegal and they have no authority over that tip. HELP! 🙂
Thank you! MEAGAN
I agree with your assessment that you’re misclassified. It doesn’t sound to me like you’re properly self-employed–at all.
With regards to the tip distribution, things become a bit tricky. Normally, they would not be permitted to hold tip income like that, but because the tips are intended for the service provider (who may or may not be you when they come around to redeeming the package), it likely is legal for the salon owner to hold the tip until the service has been rendered. After all, you weren’t tipped for selling the package. The $200 was meant to cover the service provider’s tip upon redemption. This isn’t tip pooling–it’s prepaying. Each time the client visits to redeem one of their package services, they can determine how much of that prepaid tip to distribute to the service provider who executed the service.
If you strongly feel that the client intended to tip you the $200, I recommend contacting them directly and asking them: Is the tip for the service provider who executes the service, or for me–the person who sold you the package? I’m willing to bet that they didn’t intend for it to be for you exclusively, but it wouldn’t hurt to check.
Edited to Include: Not that this is entirely relevant, but prepaying tips is extremely typical when customers purchase gift cards or service packages. In these cases, the prepaid tip is not the property of the employee who sold the gift card or package since that wasn’t the client’s intention. It doesn’t become the property of an employee until the client specifically assigns the money to the employee.
I have a question about gift certificates and booth renters. I currently booth rent at a salon in MT where we are not allowed to sell our own gift certificates. Instead, we are supposed to sell the Salons Gift Certificates. It actually says in my contract that I am not allowed to sell my own Gift Certificates. The problem arises when when a client books a service with me (booth renter) and uses a Salon Gift Certificate to pay. The salon owner refuses to reimburse my directly and instead insists on deducting the gift certificate amount from our booth rent. So if i have a Gift Certificate heavy month, I might not have to pay booth rent, but I also don’t make any money. For example, My booth rent is $400 a month. I had $600 in Gift Certificates. Salon owner uses $400 of my redeemed Gift Certificates to cover booth rent but does not give the remaining $200 to me. She says she doesn’t want to write checks every time a Gift Certificate is redeemed. ALSO, she doesn’t give us the full amount redeemed. For example, Someone buys a gift certificate for $100. I do services on the client worth $100 and turn in the Gift Certificate to the Salon. The owner then takes something like 3% off of the $100 because “she had to pay a fee to swipe the clients card.” so i really don’t get paid $100…I only get paid $97. I hope that makes sense.
My other issue is that her contract requires Booth renters to carry “Independent Contractor Insurance” along with the liability insurance I already carry. I asked the salon owner why I would need that type of insurance and she said she “just wants us to be protected if we go do any bridal parties outside of the salon.” I can email you a copy of my Booth Rental Contract if that would make answering my questions easier. Any advice on the Gift Certificate and Insurance situation? Thanks
Yeah, no. That’s not how gift certificates are supposed to work. While there are no direct laws that specifically talk about this exact type of instance, I can tell you that her processing fees aren’t your problem. You’re a self-employed salon owner renting a space from her. When you perform a service on a client who redeems a gift certificate, the salon owner is basically holding those funds to eventually compensate for a client’s service. She needs to be paying each dollar due–not choosing to deduct from it arbitrarily to cover HER cost-of-doing-business expenses.
While the way she credits the money to your rent also likely isn’t outright illegal (since nobody writes laws for this kind of fuckery), I would argue that it constitutes an inappropriate degree of control over your business finances, which isn’t how self-employment works. (Then again, a contract law attorney may argue that you signed a covenant agreeing to those terms, so there’s no wrongdoing.) Not giving you the excess money is wrong also. Since you’re a business owner, let her know that in the future, you expect payment to be made full upon the service being rendered.
My advice is to speak with an employment law attorney, as they’d know best how to advise you. This is one of those areas where an owner is doing bonkers shit that falls into a murky gray area laws aren’t quite equipped to address. When it comes time for you to renew your lease, renegotiate the terms so that you aren’t required to participate in her gift card idiocy–and if you will be required to, that she pay you what she owes you with actual dollars and let you decide how to manage those dollars (since you are an actual salon owner and she is nothing more to your business than a landlord).
Ugh, this type of thing annoys me so much. I hope you’re able to work everything out, and if not, that you find a landlord who knows how to stay in their damn lane.
Hi! I was recently approached by my salon owner and her husband (new husband and part business owner) unexpectedly after one of my evenings af work. She said they had looked at their video surveillance cameras to look into another matter and overheard a conversation I was having with my client about my dislike for the new salon decor and the recent ups and downs of sharing a booth with my owner. They were very mad and planned on having me pack up my things that very night. From what I’ve read she has no basis to kick me out. I have not violated lease agreement. Can I be evicted for other reasons? Say just pissing her off?
Were you made aware that your conversations were being recorded? Did you consent to it? If not, recording your conversation could have been considered illegal wiretapping. You can be evicted for any reason, so long as your lease agreement doesn’t state otherwise, but I’d argue they’d have a hard time defending themselves in this situation.
Hello how are you? I have a question I just started a new job and I had to sign a contract where it states that if I leave or get terminated I can’t work anywhere nor start a business that’s in competition with their business within a 35 mile radius for 3 years starting after I leave. It states other things as well, but one is that I have to build my own clientele on top of what they bring me. Is this legal in the state of Georgia? I read your post and realized that Somethings applied to
me. Meaning, I’m classified as an employee not an independent contractor, so I shouldn’t have to bring in my own clients, nor should I have to commit to a schedule if I’m not being compensated for the hrs when I’m not doing anything, also she keeps my money tips during the week, but pays all of it to me at the end of the week and I never filled out a W4, so my money isn’t being taxed and that means I’ll have to pay on my own taxes at the end of the year! Do you think that with this knowledge I can get out of my contract because she’s running her business illegally?
It sounds to me like you actually are not employed. If your paychecks aren’t being taxed, you’re being paid under-the-table and are misclassified. While this contract very likely won’t stand because it’s not reasonable, it could, depending on the circumstances. Because of this, you should never, ever sign anything you don’t plan to abide by. Georgia, surprisingly, takes misclassification and employment abuses seriously. Enough about this sounds wrong that I’d argue she’d have some serious explaining to do if she were reported to your state labor authority. I can’t advise you about your situation because I’m not an attorney and haven’t read your contract, but I highly recommend you contact an employee defense attorney for a consultation ASAP.
Oh I definitely signed the contract planning to abide. I just felt deep down like something wasn’t right and I shouldn’t sign it. I just needed a job and still do, so like a fool I did. I came across your blog and learned a lot from reading because unfortunately a lot of employers do this and people like me don’t know that’s it’s illegal and wrong, so we go along with it just to feed our families and it’s not right! I really appreciate your quick response.
Thank You!
You’re a saint for being willing to stick to those kinds of terms. Dear lord, if someone presented a contract like that to me, I’d make them eat it. It’s totally understandable though, because you’re absolutely right. This kind of thing happens all the time, so it’s hard to recognize how unreasonable the terms are when you’re so accustomed to seeing these kinds of arrangements being treated as if they’re normal and acceptable. I really hope everything works out! I’m sure it will. You’re in a strong position in a state that really doesn’t like when employers attempt to evade taxes and abuse their workers, nor do they like it when anyone tries to stifle competition.
I lease a station at a barber shop and pay self employment tax every year. The shop owner thinks he can dictate my prices and hours despite me telling him several times he cannot. I know a bit about independent contractor law and I know this is illegal. I have owned my own shop in the past and have had independent contractors lease from me. They all had the right to work their own hours and charge their own prices. Is there any IRS paperwork I can show him or an IRS number I can call? I don’t want to have to resort to legal action if I don’t have to but I have a right to protect my business. I’m also concerned with him retaliating by letting me go even though I know by law he is required to give me 30 days notice. I’ve worked hard to build a large clientele and I don’t want to have to move to another shop. Please advise. Thank you
Hey Gary! The IRS has a ton of information to help explain how self-employment works, but in my experience, salon landlords like the one you’re dealing with generally aren’t interested in being educated because ignorance benefits them. A lot of them are willfully ignorant, so they know they’re doing something unlawful and exploitative but don’t care (usually because they think they won’t get caught and/or can’t be prosecuted if they play stupid).
Your best strategy is to follow the steps in this post. Just do so with the understanding that the recipient of the message will almost certainly want to continue what they’ve been doing. After all of the national news coverage regarding the abuse of the independent contractor status, this kind of boundary stomping from non-employers is more likely to be a deliberate choice than an accident.
Hi Tina
If you know can I have verbal rental agreement with independent contractor? or I need signed agreement and needs to be submitted to any government agency?
Thanks
Hi Krina!
In the US, you can have a verbal agreement (commonly referred to as a common law agreement), but I highly advise having a professionally written lease drawn by a qualified attorney with experience in commercial landlord/tenant law. It costs far less to have it done right than it does to attempt to enforce a verbal agreement.
Hi Tina,
I was wondering with this pandemic ongoing…how should i go about applying for assistance…and am I consider as self employer/independant contractor?
Currently renting a booth and not working for commision
Not certain if i should contact current landlord and cancel my booth.
You’re considered self-employed, so you would likely have to file for unemployment (since self-employed people are also eligible) and a PPP loan (if that’s something your financial adviser recommends for you). Just understand that the PPP loan IS A LOAN, not a grant, as most self-employed professionals won’t be able to fulfill the requirements for forgiveness. If you’re a renter, you’re easily able to close and reopen when things improve, which might be the best option until we have a vaccine or reliable treatment options.
Interesting article to read and quite informative too. Thanks for sharing such a wonderful article.
Hi Tina, are you still on here? I have a question. I’m a salon owner with booth renters. Two of the stylists are going to be leaving and opening their own salon and told me as of June 1st they will be giving me their 30 days notice. It is in their contract that they must do so. But instead of doing that they I heard from the grapevine that they are planning on not paying June rent and leaving. I am understandably upset about this. 1, can I sue for breach of contract? 2, can I legally pack their stuff and put it outside?
I’m here! (Just super busy and trying to catch up, lol.)
Since they’ve signed a lease, you can rest easy and let them violate it. Only then can you do something about it, and IMO, you sincerely should. Don’t trust the grapevine. Trust that you’ve got a contract and the law. If I were you, I’d sit them down and explain what you heard, then make sure they understand that you wouldn’t let it slide. If they have been considering ripping you off, that should make them reconsider.
Can a spa you work for as a 1099 contractor simply give a refund to a customer and thus remove your pay for that?client received a full service including two add ons and tipped, but called the next day saying he didn’t like the pressure.
I wasn’t contacted and instead the receptionist simply gave a full refund so now I won’t get paid. Am I just being petty and wrong for feeling frustrated or is this truly unfair?
Also, can they dictate what You wear? They specify a color but then come back and say no skin showing while other women show big cleavage but that’s okay? I suspect some behind the scenes drama…
Thank you, looking Forward for some insight. Great website!!! Blessings!
If you’re truly an independent contractor, you should be collecting payment yourself. If the work agreement allows the client (in this case, the salon owner) to collect payment, your pay should be clearly stated in the agreement. In any case, it’s not the salon owner’s right to issue a refund out of your pocket. You aren’t being petty or wrong. I recommend making it clear to the salon owner that you expect to be paid for the work you did. The business owner also can’t mandate a uniform for non-employees that isn’t required by state law. (For example, they can’t tell you that you must wear black. If the state board requires closed-toed shoes to be worn, they can require you to wear closed-toed shoes.)
I’ve been a hairdresser for years and had no idea the difference between being an employee, independent contractor, and booth renter. This post is eye-opening and I’m so grateful for the detailed information. It’s sad that the beauty industry is often shrouded in confusion and lack of support for its workers. Thank you for shedding light on this important topic!