26 February 2015
Over half of UK salons use chair renters and it’s a business model that works well for some. But many salon owners aren’t clear on how chair renting actually works. On the surface it’s all about saving money on employment costs and the hassle of managing employees. But there’s much more to it than that and mistakes can be very damaging to your business as well as costly.
The NHBF’s new guide sets out everything business owners need to consider before making decisions about switching from having employees to chair renting.
Hilary Hall, chief executive at the NHBF said:
The key point is chair renters are not your employees. They run a separate business within your salon so they decide how they run that business, including the hours they work, what they charge, the uniform they wear, the products they use and which services they provide. Their clients are theirs, not yours”
Paul Curry, the NHBF’s President added, ‘As chair renters aren’t employees you can’t impose restrictive covenants to stop them setting up on your doorstep. Neither can you invest in their training and you can’t use the same incentives as you would for employees. So how are you going to maintain salon standards, manage the client experience and build your brand?”
Salon owners treating chair renters as employees risk breaching HMRC employment rules and are liable for backdated employee benefits such as holiday pay or National Insurance contributions. Paul continued: “There is so much involved in chair renting. Having a proper contract in place is a must so it’s clear how shared services such as reception, laundry and refreshments are paid for. Knowing how to calculate what to charge your chair renters is also tricky.
“And if you’re thinking of moving an existing employee onto a chair renting agreement you need expert advice as there may be a redundancy situation. Members get free legal advice and chair renting agreements from the NHBF.”
The guide is available free to NHBF members at www.nhf.info/nhf-guides.