Rent a Chair AgreementA Rent-A-Chair Agreement is an arrangement between a company (e.g. beauty salon, tattoo parlour, day spa etc) and a self-employed individual or freelance worker who is allowed to use the company’s equipment and to operate within the company’s premises.
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 business. 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 service provider 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.
Use a Rent-A-Chair Agreement if:
You would like to engage with an independent contractor and allow them use of your business premises or equipment.
You are any of the following: Salon Owners, Barber Shop Owners, Hairdressers, Barbers, Hair salons, Barber shops, Beauty salons, Nail salons, Day spas, Tattoo studios and wish to allow a freelance worker temporary use of your premises.
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 business’ utilities.
The payment arrangement for the payment of rent by the independent contractor.