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Carts, Toppers, & Toolholders Salon & Barber SuppliesThe digs deep when it comes to member support. This time they�ve grasped the nettle of �rent a chair� with a warts and all guide on the realities and legalities of this popular barbering business model. Whatever the question, members get access to an expert that can help. Get the full picture at nhf.info. What you need to know � �rent a chair� employees are essentially running a separate business inside your business. They are responsible for their own NI, tax, insurance, business stationary, complaints procedures, equipment, products, training and more. Employers can�t dictate their hours, dress, price, behaviour, the products they sell or the services they offer. What you need to think about before you do it � employers benefit because contracts can offer flexibility and they don�t have to pay NI, holiday pay, sick pay, maternity or paternity or pensions contributions but they lose control over the standards, hours, price, service and brand.
What you MUST have � a legal watertight contract between shop owner and chair renter to clearly define responsibilities, finances and most importantly tax (the NHF offers contracts free to members). The contract must also include how long the chair renting agreement is to last, how the agreement can be ended by either party, what happens if things go wrong, and notice periods. Be detailed and include everything that�s included or excluded. How you should charge � it�s easy to lose money on renting chairs if employers don�t get the sums right. A blend of a fixed weekly or monthly rent plus service charges (license fee) along with a percentage of the takings may work well. To work out the license fee divide the rent and rates of the shop by the number of chairs. To work out the service charge add the cost of the services provided in the contract such as phone, laundry etc and divide that too. Add these two figures together and remember to charge VAT. These costs are the fixed cost per week or month.
Additional revenue will come from the employers agreed percentage of the takings from each client. How to manage it � the contract along with clear measures of control on how money will be taken and paid plus a shared understanding of the VAT and tax liabilities for both parties will ensure that �rent a chair� models run smoothly. Always seek professional advice. Picture credit: Courtesy of the NHFSection 1 of the Employment Standards Act defines an employee very broadly, as: Determining who owns client information depends on factors like who generates the clients and who maintains the records. Some hair stylists work under a “chair rental” arrangement where the stylist pays a salon a flat fee or a percentage of amounts charged to clients, and the salon considers the stylist to be self-employed. A stylist working under a chair rental agreement may actually be an employee. In order to decide this, the relationship of the parties is looked at, including the definitions of “employer” and “employee” in the Act and various common law tests developed by the courts.
These tests try to establish whether a person is in business for him or herself by asking questions relating to control of the business, ownership of tools, chance of profit, risk of loss, the permanence of the relationship and how integral the stylist’s work is to the salon’s business. Some questions that may be asked are: For further information, see the Employee or Independent Contractor factsheet. Deductions from wages: Employers cannot pass on business costs to employees. Employees cannot be charged for hair products and supplies used in the course of their employment; Training: A person being trained for an employer’s business is an employee and must be paid; Minimum daily pay: An employee is entitled to two hours minimum daily pay; Minimum Wage: An employee is entitled to at least minimum wage regardless of how wages are paid. If paid by commission, the amount of wages earned in a pay period must meet or exceed minimum wage when divided by the total hours worked during that period.
Requirements of the Act cannot be waived The requirements of the Act are minimum requirements and any agreement to waive them has no effect. Whether or not client cards belong to the stylist or the salon depends on factors such as who generates the clients, who keeps the records, and whether the stylist is an employee or not. The Act prohibits an employer from passing on business costs to an employee. This includes requiring stylists to pay for supplies they use. Business costs passed on to an employee are recoverable as wages. A person who is being trained for an employer’s business is an employee and must be paid. An employee is entitled to minimum daily pay of at least two hours wages if sent home for lack of work. An employee is entitled to at least minimum wage regardless of how wages are paid. Province of British Columbia This factsheet has been prepared for general information purposes. It is not a legal document. Please refer to the Employment Standards Act and Regulation for purposes of interpretation and application of the law.