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Why Salon Owners and Apps Deserve More Scrutiny

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Let’s assume a beauty pro has a valid license in good standing, no current or pending disciplinary actions and no unpaid fines, and wants to work in a salon. When applying to be employed or to rent space, the beauty pro will assume the burden of proving themselves worthy to the salon owner, depending on the situation, either through their work history and technical skills, or their credit history and ability to pay rent.

Rarely does a beauty pro require the salon owner demonstrate their worthiness and history as a legitimate business.

If you were contemplating working in a particular salon, what proof would you require to verify an ethical workplace? How do you know the owner holds the proper licenses, maintains adequate insurance and pays their taxes? What’s the financial condition of the business? What about compliance with applicable laws, like those for client safety, worker safety and employment?

Why doesn’t our industry hold salon owners and apps accountable for their business practices when promoting work “opportunities?”

Time and again, salon owners will use the word “hiring” to describe a station or room for rent. And it’s always wrong. Let’s not confuse a renter with an employee. When owners don’t understand and respect the differences between employment classifications, they reveal how unqualified they are to have anyone working in their salons. Don’t bother applying with an incompetent salon owner, no matter how beautiful the salon looks. While lease terms vary and can be negotiated, you should not agree to any terms that prohibit operating your business independently within the salon. Never sign a lease agreement without legal advice from a professional whose practice includes commercial leasing law.

When federal and state employment laws make clear what’s legal compensation or not, describing an employment position without indicating the compensation model is shady. Why don’t more salon owners list the model (hourly plus tips, hourly plus tips and product commission, etc.) in the job description? The actual rate of pay can be based on experience and agreed upon through negotiation, but the model itself should not be negotiable. Employment, tax and worker protection laws place the burden of compliance on the employer. Any salon owner who complains that their employees “force” them to misclassify or compensate illegally should not have employees. Again, never sign an employment contract without consulting an employment law professional.

Up to this point, this discussion has focused on working in a salon, a fixed physical location, in either the capacity of an employee or a renter. Now that apps offering on-demand beauty services have proliferated, beauty pros need to require even more information to verify the legitimacy of the business.

Whether providing services or workspace, the existence of an app does not make the business model legal.

Technology may make scheduling services more convenient for clients, but any beauty pro considering registering with an app should consider the following:

Is it legal to provide services outside of a licensed salon in your state? If you don’t know the current laws and regulations, research the specific language on your state board’s website and get your questions answered in writing to clarify anything you don’t understand. What restrictions, if any, does the state board impose? What additional permits or licenses must be obtained?

Do you need a business license from each of the cities where you’ll work? Whether working mobile or on a short-term rental basis, don’t presume that local governments will be cool with you making money within their jurisdictions while not paying for the privilege. Contact the business licensing department before doing any work.

Does working through the app create an employer-employee relationship? We expect apps to deny any such relationship exists, but the IRS and DOL make that determination based on the extent to which the app controls your work, not what’s written in promotions or terms of service.

Who determines what services you can offer, how they’re performed and what they cost? Beyond restrictions the state board imposes, does the app limit your services and dictate pricing? Who supplies the products and tools?

How and when are you compensated? Does the app take a percentage or pay a flat rate? How does the app handle tips? What about travel and wait time? What happens if clients complain?

Does the app require that you have liability insurance? Who’s liable for any negligence or other professional malpractice? What happens if you have an accident in your vehicle on your way to or from a client?

Does the app require licensure, verification of your identity and a background check?

Who’s responsible if you’re cited and fined for health and safety violations?

Ultimately, what’s the benefit if clients “belong” to the app?

Ask more questions; The Answers Matter.

 

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