A hair salon independent contractor agreement is a document that acts as a binding agreement between a salon company or owner and an independent hairdresser or barber for space and other resources provided in exchange for payment. The hairdresser or barber is an independent contractor that is self-reliant in sourcing for their own customers. The Salon owner, therefore, makes available booths, tools of work and necessary equipment, and the required training. The hairdresser or barber in return pays a set percentage of the sales they make to the salon owner.
The hairdresser or barber utilizes the space to provide professional hair care services such as hair treatment, haircuts, cosmetology, and color processing. The hairdresser or barber becomes an independent tenant and not an employee of the salon owner. The agreement is meant to protect the interests of both parties by ensuring they meet their agreed-upon requirements
The agreement can also be referred to as a:
- Salon Independent Contractor Agreement
- Hairstylist Independent Contractor Agreement
- Hair Salon/ Barber Shop Agreement
- Salon Booth Rental Agreement
A Salon (Booth) Rental Agreement is usually used when only the booths or chairs have been rented out to the hairdresser in return for a (%) of his/her sales.
Salon (Booth) Rental Agreement is used when a salon functions such that it only charges the hairdresser rent for using their chairs and booths.
What is Included in the Contract
The hair salon independent contractor agreement is an official document that is legally binding. It ensures there is transparency by eliminating any doubts between the salon’s owner and the hairdresser.
Since the agreement is a binding contract, it should contain the names of both parties; the salon company or owner and the hairdresser or barber. The duties and responsibilities of each party such as property protection and repairs, paying for utility bills, and cleaning the workstation are written down to ensure there is clarity on what is expected from them. It must be noted that the hairdresser should not be assigned responsibilities like an employee.
The period of the contract must be clearly indicated by stating the start and end dates. The rent or lease rates should be indicated, as well as the how regularly the payments should be made, either on a daily, weekly, bi-weekly, or monthly basis, and if it should be a fixed rate or commission-based.
Service terms are indicated to protect the privacy and interests of the salon owner. The hairdresser has a right to the basic information required to run their business, but it is expected that they should not reveal or use that information at the expense of the salon owner, Service terms aims at protecting trade secrets of the owner.
If there is a need for the hairdresser to carry insurance obligations, then the minimum amount must be indicated. Apart from setting the date of terminating the contract, a method of doing the same should be decided on so that both parties can have a smooth transition. Provisions for signing the agreement during its termination should be included.
Pros and Cons of the Agreement
Entering into a hair salon independent contractor agreement has its advantages and disadvantages. The provisions of the contract that might be favorable to one party might be unfavorable to the other, and so it depends from whose side the agreement is being viewed from.
The salon owner is relieved off some duties such as paperwork and dealing with clients as would have been the case if the hairdresser was an employee. Instead of paying salaries, the salon owner is paid rent by the hairdresser. The burden of health insurance and retirement benefits on the part of the salon owner is eliminated. The hairdresser will strive to bring in as many customers as they can, which translates to more profit to the owner.
The agreement tends to make the salon owner having a feeling of losing control of the operations of the premises. It is attributed to the fact that the hairdresser is an independent contractor, and cannot be controlled like an employee. When there are several hairdressers at the owner’s premises, the environment tends to be more competitive as opposed to being collaborative because each hairdresser works towards outdoing the others. Teamwork may be negatively affected.
Drafting a hair salon independent contractor agreement can be an engaging process, Time and effort should be invested towards its drafting to ensure that no crucial details have been left out, or have been wrongly stated. The process can be made easy by using the agreement template that we have provided.
What about Retailing
The salon owner can have a paragraph included in the agreement that prohibits the hairdresser or barber from retailing products that compete with their own products. The salon owner should be aware that they cannot force the hairdresser or barber to sell products for them, but the owner can come up with a strategy such as a competition, whereby the hairdresser or barber with most sales of the owners’ products is gifted or gets their rent discounted.
Who Is Accountable For Setting Prices And Collecting Money
The hairdresser is an independent contractor and should, therefore, set their own prices, collect payment from their customers, and ensure the business books are updated and well maintained. The salon owner does not have to issue a paycheck, or request payment from customers on behalf of the hairdresser.
What is considered as Salary and Hourly Rate of contractor Hairdresser
A hairdresser’s salary and hourly rates is not constant because it is dependent on the workflow, location, expertise level, and the variety of services offered to customers. High-end locations attracts higher charges, which translates to more pay to the hairdresser. They can also supplement their income with tips from customer.