One of the most important aspects of managing your beauty career, managing your finances begins with ensuring that you receive all you’ve earned. From a legal perspective, your professional license authorizes you to earn compensation for performing beauty services. Whereas compensation can take multiple forms, money remains the most popular and useful.
How you receive compensation depends on your employment status.
Working alone in your own business keeps things simple. You perform services, collect money directly from clients and bear the responsibility to report your income and pay taxes.
What if a client refuses to pay for your work? State laws criminalize this behavior as “theft of services,” shifting the burden of protecting your business on to state government. For example, a recent update to New York law specifically applies to the beauty industry:
“A person is guilty of theft of services when: …
12. With intent to avoid payment for services rendered by a barbershop, salon or beauty shop, he or she avoids or attempts to avoid such payment by unjustifiable failure or refusal to pay, by stealth, or by any misrepresentation of fact which he or she knows to be false.”
Based on your state and cost of the service, criminal charges for theft can range from misdemeanors to felonies and be punishable with fines and jail time.
Working with or for others complicates matters; whoever owns the business assumes responsibility for properly classifying and treating workers as independent contractors or employees. Do you know the difference between working as an independent contractor and an employee? If not, blame our industry for failing to educate students about their workers’ rights and to hold salon owners accountable. Employment and tax laws protect workers from misclassification and wage theft, but this industry resists the general label of “workers” to our detriment.
“Exploitation. Now, there’s a word that has been scrubbed out of the poverty debate.” – Matthew Desmond
What if a salon owner refuses to pay for your work? Professional licensure does not exclude beauty workers from protection, nor does it exempt salon owners from accountability. Sadly, many salon owners refuse to accept the legal and financial responsibilities of having workers, and as a result, commit wage theft.
Regardless of license type, beauty workers routinely tolerate various forms of wage theft:
• misclassification as a “1099.”
• commission-only pay.
• a daily rate instead of minimum hourly wage.
• no pay for cleaning, training or time between clients.
• no pay during a “probationary” period.
• reduced pay for services paid with gift cards or coupons.
• stolen tips or tip sharing with owners and managers.
• product charges or having to supply products.
• deductions for credit card fees or service redos.
• no tax reporting, withholdings or payments.
• no wage statements.
• no unemployment or workers’ compensation insurance.
• no meal or rest breaks.
• no overtime.
Sound familiar? It’s both common and criminal. Whether due to misinformation, misfortune or mistake, misclassification serves as a euphemism for stealing money. Learn more about the difference between independent contractors and employees with these government resources.
An earlier version was published by Beauty Cast Network.