Rent a Chair Agreement
A 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.
5.0 (13 reviews)
Last updated December 18, 2024
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
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.
The Legal Risk Score of a Rent a Chair Agreement Template
Our legal team have marked this document as low risk considering:
- The agreement does not grant exclusive possession, which means multiple businesses could operate simultaneously in the same space, potentially leading to operational conflicts or disruptions.
- The licensor retains the right to assign their rights under the agreement at their discretion, potentially introducing new management without prior consent from the licensee.
- The licensee is responsible for all expenses and insurances required by law, which could lead to unforeseen financial burdens if not carefully considered and managed.
Rent a Chair Agreement Checklist
Complete your free Rent a Chair Agreement with our checklist
Ensure Proper Execution
Both the Licensor and the Licensee must deliver an executed original copy of the Agreement to the other party within 10 business days after the delivery of this Agreement electronically.
Verify Compliance with Terms
Regularly review and ensure that both parties are complying with the terms specified in the agreement, especially concerning the payment of Licence Fees and adherence to the permitted use of the premises.
Maintain Required Insurances
The Licensee must maintain all insurances required by law throughout the term of the agreement and provide certificates of currency if requested by the Licensor.
Handle Changes with Formal Amendments
Any permanent changes to the terms, such as adjustments to the Licence Fees or operational hours, must be recorded in writing and signed by both parties to ensure clarity and enforceability.
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.
Further information:
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