Hello,
I Have room for another stylist but dont want to employ another haidresser, can you explain chair-renting and how it works.
Regards,
Sheila Gummer
Hi Sheila,
We'll put your question to HJ's legal features writer David Wright, for a forthcoming issue of the magazine - will get back to you with the date as and when I know. In the meantime,I'll see what I can find out for you...
Kate
Hi Foxy,
The good news is that I have got you an answer from David Wright, who advises Habia and a variety of salons. The bad news is that it doesn't sound like it is always the most straight forward thing to do.
Here's what he had to say:
Whilst renting chairs and profit share are common place ,when it goes wrong or the inland revenue get involved it can be very very complicated .I always think the issue is the person can p and go at any time and take the clients or do massive damage to the reputation of the salon thus my final few sentences .Let me know if you are happy with this then would you mind posting the reply
This is a complex and sensitive area. Many Salons rent chairs or space either charging a weekly rate or even saving some form of share of the takings. A survey in 2000 suggested 14% of Salons rented a chair or space. The Low Pay Unit in 2004 calculated there were 101,000 self employed hairdressers in the UK.
The attraction for the Salon owner is that they don’t have the costs and concern of an employee .For example there is no tax or national insurance payments, There are no concerns regarding the minimum wage., these are the responsibility of the person renting as they are deemed to be self employed. Similarly the potential headache of the person becoming pregnant or being absent due to sickness is also removed.
However on the other side of the coin, the employee will not be subject to your Salon rules and certainly can’t be dismissed .If they use the space well and make a large profit this could have been yours! In reality, whilst they work in your Salon they are an independent business and can be viewed as being in competition with you!
Renting a chair is commonplace but there are a number of potential pitfalls these primarily relate to the employment status of the individual.
The issue arises if you have a problem. for example you close the business or have a major disagreement, they may well claim that, in reality, they are an employee and then claim for example unfair dismissal, redundancy or maternity pay.
It is absolutely essential you have a written agreement with them; this is called a “Contract for Services” which may be for a fixed period of time. This will give you some protection but cannot be guaranteed to give you total protection .Whether someone is self employed is not a choice between the parties; it is decided by the terms and conditions of the working arrangement.
You should also be aware that if the individual decides to move and set up their own business you have significantly less power in retaining the clients than if the person was an employee i.e. the person would argue they were self employed and therefore the clients were theirs.
So let us have a look at some of the things that would be looked at to determine if the individual was self employed. The person must be responsible for their income tax and national insurance .They should provide their own equipment and be free to advertise their services. They have relative freedom to decide when and where they work (so insisting on fixed hours and wearing your uniform might indicate they were an employee). Similarly receiving a fixed income or hourly rate might also indicate they were an employee .They should be free to take leave when they wish as it is their business .Paying rent for a chair MAY imply less of a link with the Salon than if income is paid into the till and then a proportion is returned to the hairdresser
If it appears that the Salon provides work directly for the individual or can allocate tasks to the person then they are also likely to be seen as an employee. A key issue is whether the self employed person can delegate the provision of the services to someone else i.e. a colleague or employee of theirs. You can insist on the skills and qualifications but remember the individual is providing a service and this doesn’t mean that they have to do it themselves.
The individual should also be perfectly free to carry out their business at other sites and therefore other Salons.
Her Majesty’s Revenues and Customs as well as Employment Tribunals regularly consider cases to determine if someone is indeed self employed.
I am sorry this is a little complex. Clearly many thousands of Salons rent chairs without a problem. However it is important you look at the longer term issues for you and your Salon before going down this route.
As a final point, you could consider employing someone on a temporary Contract or on limited part time hours initially to see if there is demand in your Salon. Whilst there will be the cost of the wage, if you have done your research and there is demand then the profit will be yours.
Hope that this helps a little. If you've got any more questiosn about it, we'll do our best to answer them on here.
I think chair renting is being made too complicated, the reason for this in my opinion is that "HM Revenue & Customs are not prepared to make it easy incase they lose out, consequently they put the frighteners on small business," what thy should consider and encourage is that chair renting is done on a percentage basis the chair renter is then having to declaring a very true declaration of income,proven by the rent paid.
Should you wish to be relatively safe the NHF have a booklet on the subject, and contracts for salons renting chairs, they have obviously had to take advice from cases brought against hairdressers by HM Customs consequently they also seem to make chair renting complicated.
Do your sums work out what you want and Go for It.
Best of Luck & let me know how you go on.
Oldboy
Hi can anyone give me a guide as to what is reasonable to charge for chair renting?
Thanks,
Fran.
I remember when chair renting started in Stockholm Swedenin 1970. The manager-owner had to make pub style booths that could be locked after the stylist went home and everyone had his or her own cash register and their own telephone and they rented the service of the salon owner. The rent payed was a fixed sum every month. Every chair was a booth, about twenty if I remember rightly. It seemed to work well for some years but they where not a team.
When the owner wanted to bring in someone to do seminars for the company. Some wanted others did not. I remeber the christmas party was great.
Another salon in stockholm went on to have 70 booth renters in the one shop. It made lots of Money selling products to the clients as they came in or left the very large salon. If every stylist did ten cliens a day then seven hundred clients a day of potential sales was not so bad. It was the 70s and 80s
That later one was called Klippotecket. (Translates to Cutting discoteck)
I stand to be corrected.... but I think that in Harrods they had a floor called THE WAY IN and it could have been run on thees lines. Anyone know about that? They sold clothes rather than Haircuts but the floor had diffrent companys that worked all together in one shop without divisions. It could have made a precedent.
Fran,
This is not a question you can just say X too. Every salon would be different.
Very simply you should devide your salons running overheads (not including wages)plus a mark up for the salon ,between the number of chairs to rent.Split this up say,weekly and that is the chair rent,this is paid every week even if the renter is sick or on holiday.
i.e
Over heads £15,000
Mark up,say 33% £5,000
Equals £20,000
Three chairs £6666 per annum = £128 per week for each.
This is a very simple example just to give you the gist of how to work it out.
Wish you well,
Tel
Hi Tel
regarding chair renting,would you say the chair renter would supply own stock? or does the employer benefit from just asking a percentage from the renter?
What about making a "co-operative"? Do you think that could work for some.
I KNOW IM BEING SILLY BUT WHAT IS A CO-OPERATIVE?
Normal 0 MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";}
Sorry, maybe it’s an Italian thing. I am living in Italy so maybe it’s not so silly. In Italy I think it’s possible to do a co-operation with all the employees (Legal status) and they rent the salon and pay all the bills. So the owner of the salon is in effect renting the whole place to all the people that make up the co-operative but then in Italy it was impossible for two hairdressing licences to be closer than 100 meters from each other. Licensing was very strict. Hairdressers were not allowed to sell hairdressing products as that contravened local by laws. Sales is another licence that as a hairdresser, would be difficult to get. It’s been difficult to be a hairdresser here in Italy. With all the red tape that’s been going on since the war.
I was wondering if u did rent out your chairs and how you went on if you did?. Having a salon myself with a few spare chairs it is something i am considering.
Regards
to tel in south africa hi. it would be much simpler for owner to supply stock, as there would be so many other problems if they supplied their own.i.e they could sell there own products at a profit which you as owner would see no profit on.there brand could be in direct competion with yours in your own salon!you could face problems such as who stock is whos as so on. jason @headquarters reading uk
Hi Fireblade,
Obviously salon usage stock is covered in the rental,salon sales are best throught the salon with the renter receiving commission...thats the way we used to do it...
Hi,
Advice given to me on chair renting is to demonstrate the contracter runs an independent business.
I have an NHF contract.The NHF info booklet states the contracter is in competition with the salon owner.
I pay £350 per week. £200 per week while not in the salon.
I buy all my own stock, supply and launder all my own gowns and towels. Supply all my own equipment.
I have my own till, accounts and accountant.
I keep my own hours, the salon is open 9 to 5, Tuesday to Saturday, but I have my own keys and come and go as I please between Tuesday and Friday. I don't work Saturday, Sunday or Monday.
There is some help in the salon but I mostly book my appointments as if I have no help.
The salon uses Wella products. I use L'Oreal. The only common ground since joining the salon has been that we both retail Lamaur Nucleic products.
When I joined the salon, I sold all my own Nucleic stock to the salon to stop confusion and then recieved commission on my sales. I am the only person using Nucleic in the salon,(rather than saying it's what we use)!
Now Lamaur/Nucleic is being discontiued, I have started using Merlin in the salon. Next I have begun to retail Merlin. It is to this that I have encountered my first disagreement with the owner. He says I am competing with his retail sales. I am only prepared to use and sell what I believe in and up until now the owner has sold on the back of what I use rather than his under the counter supermarket cheepo backwash products.I am not allowed to display or talk about Merlin in case clients buy it instead of new Joico products in the window!
Any advice as to what the answer to this situation should be will be greatly appreciated. I will just add that I take a more technical approach to my work, telling clients what and why I'm using and "never" saying "do you want conditioner?"
Back to work tomorrow with all my retail stock locked in my stock cupboard- I need to start selling it-- HELP!
Best wishes,
Bertie.