I am writing this article in the hopes that I will keep at least a few of you from making the mistakes that often lead you to this blog (and often to my email inbox). Recent graduates, read up. This is your bible to navigating the salon and spa industry. Great owners are out there, this article exists to help you avoid the bad ones.
1.) Change the way you look at job interviews. A lot of you out there (particularly the recent graduates) see job interviews as personal obstacles. You walk into the interview believing that you have to prove yourself and sell yourself to the owner. This is the wrong attitude to walk in with.
You are at the interview to present your qualifications and experience and communicate your expectations. The owner needs to present their requirements and expectations of you. The two of you then decide whether the arrangement is a good fit for both of you. If your mutual terms, conditions, and expectations do not match harmoniously, it isn’t meant to be.
The owner is meeting with you because they are interested in possibly hiring you. If they weren’t, you wouldn’t have an interview. Remember that the interview is a two-way process. You are interviewing the owner and her way of doing business as well. Don’t be afraid to ask questions or bring up any concerns you have. Do not blindly agree to everything. We’ll touch on this more later.
2.) Ensure that the owner will classify you properly. Too many owners classify employees as “independent contractors.” Too many industry professionals do not have a clue what the difference is.
The owner might tell you, “This is better for you since no taxes will come out of your checks.” What they are NOT telling you is that at the end of the year, YOU will be solely responsible for covering your employment tax since you are technically “self-employed.” This means that at the end of the tax year, you will be paying 15% of your total earnings to the IRS. If you were a W2 employee, the owner would be responsible for paying half of that. As an “independent contractor” you also are not entitled to government employment benefits like worker’s compensation or unemployment, since you are not paying into them.
Clearly, this arrangement is really only benefiting the owner and is not “better for you” at all. Those taxes will have to be paid eventually. It is always better to have them come out of your checks than to be stuck with a substantial IRS bill at the end of the year.
Independent contractors are considered by the IRS to be self-employed. This means that they do not adhere to a schedule. They don’t wear uniforms. They don’t attend “mandatory meetings.” They aren’t exclusive to one salon. They can’t be bound to a “non-compete” agreement.
A true “independent contractor” is an on-call staff member. For example, a salon that doesn’t have a strong enough facial clientele to justify hiring a full-time esthetician may establish a pool of four or five on-call estheticians to call on when a client books an appointment. When the client books, they contact the on-call estheticians and determine who is available. That esthetician comes in, does the service, and leaves with cash or check in hand. At the end of the year, the owner provides the esthetician with a 1099 and the esthetician files her employment taxes, paying the full 15% herself.
That extra 7% a year is the sacrifice an independent contractor makes for the freedoms they are supposed to enjoy as a truly self-employed person. If you are paying 15% but you are being “managed,” you aren’t self-employed. If the owner wants to dictate your schedule, tell you how to do the services, require you to clean, force you to attend mandatory meetings, and require you to wear a uniform, they need to legally employ you as a W2 employee and pay half of your employment tax responsibility. Do not be afraid to call a potential employer out on this. If you need physical proof that this is against federal tax and labor laws, go to this article, print out some material, and provide the potential employer with it.
In a lot of cases, the owners have no idea what they’re doing is illegal and can bankrupt them.
Then again…in a lot of cases they know exactly what they’re doing and simply don’t care.
If you somehow stumbled on this article and discovered that you are being improperly classified, read this article to figure out what action to take.
3.) THOROUGHLY READ ANYTHING YOU’RE BEING ASKED TO SIGN.
This should really go without saying, but too often I’m contacted by people that wrote their names on agreements they DID NOT agree with, looking for a way out. If you sign something, you are agreeing to comply with whatever the terms are, regardless of how unreasonable they may be. If you don’t agree with it or have no intentions of following through with what is expected of you, DON’T SIGN.
Unreasonable agreements will never hold up in court, especially in this economy. For example, an owner that requires you to sign a non-compete that restricts you from working in any beauty-related field within a 50 mile radius of her salon for a period of three years will have her agreement struck down by a judge. It is overly restricting and unreasonable. However, you can expect to be blasted by opposing council (or the judge…or both) for signing the agreement to begin with.
You’re an adult. Nobody is holding a gun to your head or threatening physical harm against you for not signing the documents presented to you during an employment negotiation. In the worst case scenario you may not get the job that’s being offered to you, but if you have to sell your soul for the position it’s unlikely to be worth the trouble anyways.
Remember that all contracts are negotiable. You do not need to accept the terms as they are. When a potential employer presents you with a contract, take it home. Bust out a red pen and make changes where you see fit. Arrange a meeting with the owner and present YOUR terms. If they don’t accept, find employment elsewhere.
6.) KEEP COPIES. Ensure that you are given correct copies of every document you sign or are presented with. Keep them safe AT HOME…not in your station at work. Any changes made to them during negotiations must be kept as well.
7.) Never assume that “nothing will go wrong.” Just because your potential employer seems amazing and the two of you really hit it off does not mean that you have found your professional home for the rest of your life. People change. First impressions are rarely ever accurate. Remember this when the owner presents you with a document that requires you to pay out thousands of dollars if you quit before a specified period. (Yes, I have seen in employment contracts.) If it doesn’t “sound right” or “seem fair” it isn’t.
8.) Unless you are a booth renter, the owner is responsible for product costs…not you.
A lot of owners are charging employees for backbar and color expenses, using what I refer to as the “mechanic analogy.” I’m not sure what message board all of these silly broads picked this policy up from, but the analogy doesn’t translate. Basically, owners compare product cost to car parts. They claim that the client is charged for the product (the “parts) and the labor. The problem with this is that our “parts” are almost impossible to quantify accurately, so they’re charging exorbitant fees (which are removed from the stylist’s paychecks) across the board. This almost always ends up equaling more than they’ve paid for the product and creates a potential tax issue for both them and you.
For example, your do a $50 root retouch. You use 1/2 ounce of color and 1/2 ounce of developer. The salon owner deducts $5 from the $50 service fee for “product” and pays you 50% commission from $45 for “labor.” At the station next to you, your coworker is doing a root retouch on someone who has the exact same color that your client has. She uses 2 ounces of color and 2 ounces of developer. Because her client’s hair is more dense, she charges an extra $20. The salon owner deducts $5 from your coworker’s $70 service total and pays her 50% commission on the $65.
You are getting shafted. You used significantly less product and paid the same price as the employee that used more. In addition, the owner is the one getting the tax deduction for the business materials. You are not, even though you and your coworker have cumulatively paid more than the owner paid for the product. So, the owner is not only making at least $10 for a tube of color (which averages $4-6), she’s also getting a tax deduction for it.