Under a Rent-A-Chair Agreement, the hiring party retains the title as an independent contractor and is not treated as an employee of the salon. As such, the hiring party is not entitled to receive any employment benefits that would arise from a traditional employment contract with the salon.

Is the hairdresser an employee or a contractor?

The implications of treating an employee as an independent contractor so as to avoid paying for employment benefits faces serious ramifications and is referred to as a sham contracting arrangement under the Fair Work Act 2009. The sham contracting arrangement provisions of the Fair Work Act 2009 provide that an employer cannot misrepresent an employment relationship as an independent contracting arrangement, threaten an employee into such an arrangement and knowingly make false statements to influence an employee to become an independent contractor. Serious penalties can apply. This agreement assumes that the hairdresser is a contractor and sets out a commercial relationship consistent with that assumption. However, a court may consider certain treatment of a hairdresser to overturn that assumption, regardless of what the agreement says. If you are unsure about whether to classify someone as an employee or contractor, seek legal advice.

What does a Rent-A-Chair Agreement cover?

• The term of the arrangement.
• The rights and obligations of the salon and the independent contractor.
• Information regarding what the independent contractor is permitted to use within the salon for the duration of the agreement.
• The independent contractor’s contribution to the salon’s utilities.
• The payment arrangement for the payment of rent by the independent contractor.

Further information:

• What is Sham Contracting?
• What's The Difference Between A Contractor and An Employee?