Commercial Director James leads Account Management, Sales and Marketing at Neathouse Partners.
21 September 2024
If you’re working as a hairdressing or salon professional, it’s likely you will have heard of rent-a-chair agreements. Under such agreements, a salon can hire a hairdresser as an independent contractor, so they can work with their own clients in the salon, and use the salon’s equipment and chair. Basically, the hairdresser runs their own business, while using the premises of another salon. The hairdresser simply rents the salon chair, and pays the salon owner for the rental. This could either be through a percentage of their earnings, or a fixed amount per month. Rent-a-chair agreements can work well for both salon owners who want to offer more stylists to clients without having extra employees, and freelance hair stylists who don’t want the costs and responsibilities of running their own salon. That said, in legal terms, they can be complex agreements to navigate in terms of whether a stylist renting a chair is a contractor or employee. In essence, they go far beyond simply offering a contractor a salon chair. HMRC is in fact cracking down on employees that are ‘disguised’ as salon chair renters, with employers not paying them in PAYE, and without national insurance and holiday/sick pay. It’s therefore important that salon owners know how to create and enforce rent-a-chair agreements while staying on the right side of the law. Here’s a simple guide to rent-a-chair agreements in salons.
Salon chair renters are not employees – they are contractors and self-employed. This means that they are running their own business and providing an independent service, and are not working directly for the salon they are renting the chair from. Both the salon owner and contractor have ultimate control over their own businesses. If a salon owner enters into a rent-a-chair agreement with a contractor, and they are renting the salon from a landlord, the agreement could complicate things legally between the salon owner and that landlord. This is because having a rent-a-chair agreement could be seen as ‘subletting’ part of the salon, which could be restricted under any lease agreement the salon owner has with their landlord. Before entering into a rent-a-chair agreement as a salon owner, it’s very important to check the contract you have with your landlord and the terms of your lease. You may need approval from your landlord to ‘sublet’ any part of the salon space, or negotiate an agreement that makes it profitable for them. If you own the salon property outright yourself, this isn’t an issue.
Renting a salon chair in the UK typically means that a person is self-employed, as they’re essentially paying for the space and operating independently within it. They’re responsible for managing their own clients, operating hours, schedule and finances, and there will be some flexibility as to when they offer business within the confines of the salon’s policies. However, it’s always a good idea for both the salon owner and the contractor to be completely clear on the specific terms of the rent-a-chair arrangement, so both parties are familiar with their responsibilities. In being self-employed, a contractor hairdresser hiring a chair at a salon doesn’t have to wear mandatory uniform or follow any other rules that are followed by salon employees. This can be tricky for some to navigate, which is why both parties need to be clear that the contractor has their own authority. Independent contractors typically bring their own supplies. In rent-a-chair setups, the salon owner may decide not to let the contractor use products that their employees use in the salon. If a salon has exclusive partnerships with specific brands, it’s prudent to notify them if contractors opt for alternative products. Additionally, should contractors wish to use a salon’s products, the salon owner may consider imposing supplementary charges, as the contractor is a separate business. In terms of day-to-day operations, independent contractors in rent-a-chair setups can determine their working hours, client load, and are not mandated to accept assignments from the salon. Independent contractors are also responsible for managing their own bookings and finances as they effectively run their own businesses. While this autonomy can be an advantage, it can introduce unpredictability into a salon’s operations. It may be useful to salon owners to state in the contract that contractors must adhere to standard salon opening hours, and offer services during those times. However, caution must be exercised to avoid overstepping legal boundaries in terms of control, because the contractor isn’t an employee. If relinquishing control is a concern, hiring regular employees may be a preferable option for a salon owner.
By covering the above in a clear contract, the rent-a-chair agreement can establish clear expectations and responsibilities for the salon owner and the independent contractor.
Whether you need help drafting a rent-a-chair agreement or have a conflict with a contractor who is using one, our team of professionals at Neathouse Partners can help you to stay compliant with the law.
Get in touch by calling 0333 041 1094 today or use our contact form.
