It’s the first official episode of This Ugly Beauty Business, and we’re going to spend it going over the basics. Are you a booth renter, independent contractor, or employee? What is the difference between an employee and someone who is self-employed? Why are so many beauty professionals “1099?” You have questions, and when you’re done listening to this episode, you’ll have answers.
Know Your Rights: This is the article this episode is based on. In it, you’ll find a ton of useful links. Every statement made in this episode is cited here with links to the federal statutes. (Keep an eye out for underlined dark teal text.)
The 20 Factor IRS Test: Want to find out if you’re really an independent contractor? Here are the 20 factors the IRS uses to make that determination, and why they likely don’t apply to you.
Be Your Own Boss: Learn what it really means to be self-employed, and why your landlord doesn’t owe you a damn thing other than square footage.
I absolutely loved this. This independent contractor title is totally out of control in Austin, Tx.
Love, love. Love this- as a Licensed cosmetologist and licensed educator!! You’re amazing and thank you for all you do!
Please tell me how I have not known about you or your work sooner. I’m not the most (or the least) computer savvy person out there… I’m sure through some digging I can get tons of info right here on your site. I have been a salon owner since 1990. I am 49, have a booming thriving business and am completely self taught in business. I’ve managed year to year, doing my best while working behind the chair as well. There almost doesn’t seem to be enough time in a year to stay on top of all the new rules and laws. I believe I best resemble a booth “rental salon” doing my best yet operating in the gray and RED areas. It seems confusing to say the least to know everything I am supposed to. I feel like I may need a a consultant or tutor of sorts to help me dial everything in. Do you have recommendations? I am in California. I want to know what I “NEED TO DO” to get this right and not so much of what I shouldn’t be doing or what I am doing wrong. Does that make sense??
Hi Linda! I’m actually working with someone in California right now, transitioning workers to employees from a “gray area” situation. If you’d like help transitioning yours, you can book an appointment with me using my online booking system here. I’m just getting familiar with the new “piece rate” law in California, and I do have an employment law expert and an HR firm in California I can refer you to.
I really appreciate all the hard work you are doing to make this information available to us. I’m sharing this with all of the ladies that a went to school with.
Thank you, Thank you, Thank you! This is wonderful! Going to find your book and buy it! I agree with Mia, Texas is off the hook!
I am 1 week in a salon. So confused and overwhelmed already. My salon says I’m an independent contractor and I will receive a 1099, however they also give me 50% commission. From what I have read here I am being ripped off. I like the salon and others in the salon. What is a fair % to ask for if I’m getting a 1099 and salon supplies me with everything I need?
That doesn’t sound like an appropriate use of the classification. You should read this post, this post, this post, and this post.
I’ve been an “independent contractor” for the last 3 years. Receiving 50% commission. The reason for the commission is said to reserve my spot in the salon and help pay for product cost. I do not supply my own materials. I’m required to have a lot of availability. I am open 9-5:30 Monday through Friday. The owner has access to my scheduling and books clients when she pleases without notifying me at times. Has business card with her salon name and my name as her employee. She books me for things and at times has my availability wrong and yells at me for not marking out my schedule. Sat me down and made me think I would be fired for not being able to accommodate her clients. Has scheduled me without notice when she goes on vacation and made me deal with rescheduling the clients. Has me clean her salon and doing laundry. I pay my own taxes, liablility insurance, continuing education. I’m told I’m not allowed to use my own products and when I asked to purchase my own products her response was “ well, then how would that benefit me?” I believe it’s pretty clear that I have been miss classified. I’m not paid for meetings that she’s late to, or for any downtime that I’m there. She also told me If I wanted to perform microblading in her salon that I would have to pay for new flooring in her salon room that I use. When I asked her about me having to pay her portion of the employee tax her response was I’m doing you a favor because you get to write everything off.. but I don’t understand what I would “write off” if I’m not purchasing my own products. I also found that the cost of rent is way lower than the amount she’s making from me monthly and this was never brought to my attention as it stated in her contract that I would be approached if booth rental would be a better option for me. When I asked if I could get certified to do microblading her response was you should stick to lashes while she went and got certified for herself.. I decided to sign up anyways because I would be the one to pay.. although she paid half of the other esthetician’s cost to become certified. On top of all the laws she’s breaking she wasn’t very kind to me at all. I laugh now at “contract” … she made me believe I was her employee. I’m now looking at a salon who is commission based but feeling nervous about making the switch.. would booth rental be the ultimate goal to support myself in my career?
If you can’t find a salon owner who can comply with the law, rental is the only smart option. In both scenarios, you’re paying self-employment tax, but in a rental arrangement, you’re setting the prices and retaining the control necessary to ensure you make a profit (instead of allowing a so-called “salon owner” control those things). Stay away from “commission-only” salons. You need to find a salon that pays legally (which means hourly PLUS or hourly VERSUS commission). Your paycheck should be as guaranteed as your bills, so never work for someone who makes your pay conditional upon their ability to market and manage their business.
Thank you! The commission salon is offering to pay for continuing Ed, handle all booking 50%, w2, pay for all product and materials, pay for additional training that I choose .. and I spoke with her briefly about the laws and she was actually aware of them so good signs! But I’m going to look into booth rental somewhere also! Thank you !!!