Chair rental legislation is one of the hottest topics in the hairdressing industry. Our latest HJ Insider surveys suggest that nearly half of the people working in hairdressing are self-employed, with many of those working as chair renters.
While chair renting works well for some salons, there’s a lot to think about as a salon owner. If you get it wrong and HMRC decides that your chair renters are actually employees, you risk having to pay backdated employer tax penalties and facing claims for unpaid holiday pay, unfair dismissal, maternity benefits or discrimination.
Helpfully, the NHBF has written two guides to clear up any confusion – one for salons owners considering chair renting, and the other for chair renters themselves.
The guides set out the advantages and disadvantages of chair renting, and who is responsible for what. NHBF Members also benefit from free chair renting agreements.
The NHBF says: “The key point for salon owners is chair renters are not your employees. They run a separate business within your salon, so they decide how they run that business, including the hours they work, what they charge, the uniform they wear, the products they use and which services they provide. Their clients are theirs, not yours.”
“As chair renters aren’t employees, you can’t impose restrictive covenants to stop them setting up on your doorstep. Neither can you invest in their training and you can’t use the same incentives as you would for employees. So how are you going to maintain salon standards, manage the client experience and build your brand?”
“Having a proper contract in place is a must so it’s clear how shared services such as reception, laundry and refreshments are paid for. Knowing how to calculate what to charge your chair renters is also tricky. And chair renters themselves also need to know exactly how the arrangements are going to work and what they are responsible for.”
The government recently reviewed employment status in the wake of high profile court cases involving companies such as Uber, Deliveroo and Pimlico Plumbers. Are the people working for them truly self-employed or are they really employees? It matters because self-employed people have no rights at all while employees have a much wider range of rights – which come at a cost.
Salons using chair renters therefore have lower costs than salons with employees, which many see as unfair competition. The NHBF is actively lobbying for clear criteria to help salon owners (and chair renters) determine employment status and the rights and responsibilities which come with it. The guides are available free to NHBF members here. Thinking about going freelance? Here's what you might want to consider first...