Legal implications of chair rental

Shop floor square-footage is more expensive than ever, so it's absolutely essential your salon makes the most of every inch. One solution that's popular among salon owners is hiring out spare chairs to independent stylists. Not only can it provide extra revenue for the salon through regular rental payments, but having a stand-alone enterprise running from your premises can also make a positive impact on retail sales. For the stylist, setting up a separate business within a salon can be an excellent way to learn about the commercial side of hairdressing, along with the creative side.But there is a lot more to it than just taking a seat, according to Ray Seymour, general secretary of the National Hairdressers' Federation (NHF). He says: "Employment law, taxation law, national insurance, VAT, liability, health and safety regulations and basic landlord and tenant legislation can all come into play."

Legal Considerations

The Contract - The main point to bear in mind is that a hairdresser renting a chair is effectively running their own business, and should deal with the legislation accordingly. When it comes to employment law, the salon owner and the would-be renter need to work with their solicitors to come up with a self-employment contract, rather than an employment agreement. Each party then has clear control over their own business and finances - including tax, and one isn't responsible for or in charge of the other. This also means the independent hairdresser can decide when they work, how often they come in, and what prices they want to charge their clients. In terms of arranging payment for the rental of a chair, there are no hard and fast rules - it's up to the salon owner and the stylist to come up with a mutually agreed fee. Insurance - This is a legal necessity for any stylist hiring a chair, and to cover every eventuality it's likely more than one policy will be needed. If the self-employed stylist damages a client in some way, legal action will be taken against the hairdresser, so they need a public liability insurance policy. Insurance is also available to protect independents in case they fall ill and can't work for a period of time.

Client Considerations

The clients also have to be considered. As Ray explains, it's important to make it clear to them that an independent hairdresser is just that - independent, and separate from the main business. "In the case of a new client entering a salon, they must be made aware that the salon has a mix of independent stylists and employees, with different price tags," he says. "One of the best systems I've seen in place is to have a sign up at reception with photos of everyone working within the salon - employees and self-employed hairdressers - along with details of their specialist areas and prices." Clients also need to know exactly how and who to pay following an appointment with an independent stylist. There's no reason why payments can't go through the salon's main till, but it's essential to keep the system clear by ensuring receipts stay separate. And someone running their own business from the salon's premises is entitled to take home anything they've earned at the end of a working day. "Keeping a clear paper trail is very important so accountants acting for both the freelance hairdresser and the salon owner know exactly what they're dealing with," Ray adds.