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If you run a hair salon, you'll no doubt be familiar with a rent-a-chair agreement. As the name suggests, this agreement lets you rent out a chair in your salon to a freelance hairdresser, boosting your income and bringing in new clients.
But where can you find a rent-a-chair agreement template and what information does your contract need to include? Keep reading to find out.
What's in this guide?
- What is a rent-a-chair agreement?
- Get a rent-a-chair agreement template
- More on where to find rent-a-chair agreement templates
- How do rent-a-chair agreements work?
- When to use a rent-a-chair agreement
- What does this type of agreement typically include?
- What should I watch out for?
- How do I write a rent-a-chair agreement?
- Do I need to use a lawyer?
- Find customisable legal templates online
What is a rent-a-chair agreement?
A rent-a-chair agreement is an agreement between a hair salon and a self-employed hairdresser, but it is also commonly used in beauty salons, nail salons and a range of other businesses. This legally-binding agreement allows a salon owner to hire the self-employed hairdresser as an independent contractor. Essentially, the agreement lists the expectations of both parties and details the terms and conditions of the working relationship.
From the salon owner's point of view, you get to earn extra income without having to pay employee entitlements like sick leave and superannuation. For the hairdresser, they get to operate from your premises, keep all their usual clients and not have to worry about the overhead costs of running their own salon.
Get a rent-a-chair agreement template
Download this hairdresser rent-a-chair agreement template at Lawpath
More on where to find rent-a-chair agreement templates
There are several legal document websites that offer rent-a-chair agreement templates, sometimes for free and other times for a fee. Some of the options include:
- Lawpath. Lawpath offers a rent-a-chair agreement that you can edit online. It's free to use, but you'll need to sign up for an account first.
- Easy Legal Templates. This brand also has a hairdresser rent-a-chair agreement. It's been drafted by Australian lawyers and can be completed in under 10 minutes. However, you'll need to pay for it.
- Foundd Legal. This site also allows you to purchase a rent-a-chair agreement template which can be tailored to suit your needs.
It's a good idea to compare a few options before deciding on the best rent-a-chair agreement template for your salon. Alternatively, engage a lawyer to draft an agreement to suit your business.
How do rent-a-chair agreements work?
Rent-a-chair agreements usually work in one of three different ways:
- The freelance hair stylist pays a fixed amount for rent each week/month.
- The salon owner takes a percentage cut of the freelancer's earnings.
- A combination of the first two options — the salon owner charges a fixed rental amount and also takes a commission from the freelancer's earnings.
When to use a rent-a-chair agreement
You can use a rent-a-chair agreement when you want to hire out a chair in your salon to a self-employed hairdresser. You might do this if you don't have the budget to hire a full-time employee, but see the benefits of renting out one of your chairs to a freelancer.
If there's an empty spot in your salon, renting out a chair can help you earn extra income and potentially build a bigger client base.
What does this type of agreement typically include?
A hairdressing rent-a-chair agreement should include the following information:
- The length of the agreement
- The rights and obligations of both parties
- Whether you can take walk-in clients
- Details of what salon facilities and common areas the independent contractor can use during the term of the agreement
It's a good idea to get all the essential details of the rent-a-chair arrangement in writing so that any future disputes or disagreements can be easily resolved. For example, you may want to specify exactly what a 'chair' in your salon includes, what insurance the contractor must have, and whether they'll be able to use your client booking system or must maintain their own.
What should I watch out for?
It's essential that you don't engage in what's known as sham contracting. According to the Fair Work Ombudsman, under the Fair Work Act, sham contracting occurs when "an employer attempts to disguise an employment relationship as an independent contracting arrangement". This is done in an attempt to avoid paying employee entitlements, but heavy fines apply — up to $13,320 for individuals and $66,600 for corporations.
You also cannot dismiss or threaten to dismiss an employee so you can hire them as an individual contractor, nor can you make knowingly false statements to persuade an employee to become an independent contractor. Make sure you're aware of the difference between an employee and an independent contractor, as well as the law surrounding sham contracting arrangements, before seeing up a rent-a-chair agreement.
You should also double-check your lease to make sure you're allowed to rent out a chair to a self-employed hair stylist. Some leases classify renting out a chair as subletting. Your lease may prohibit subletting, or you may need to gain approval from your landlord before setting up an agreement.
How do I write a rent-a-chair agreement?
If you want to rent out a chair to a self-employed hair stylist, you have two main options. The first is to put together an agreement with the help of a free online template. We've listed a few sites that offer templates above, and you'll need to make sure any template you use satisfies all relevant requirements.
The second option is to hire a lawyer to draft the rent-a-chair agreement for you. This will come at a cost, but it will help ensure that the agreement covers all relevant details, is suited to your business and is an appropriate arrangement with an independent contractor.
Finally, you can write up a draft of your agreement by using a template and then seeking the help of a lawyer to get peace of mind that your wording is correct.
Do I need to use a lawyer?
While you can enter into a rent-a-chair agreement without a lawyer, seeking legal advice will ensure that you're protected against any potential risks and drawbacks.
For example, if you're unsure of the rules surrounding sham contracting and employees vs independent contractors, a lawyer can help you navigate through the confusing jargon. An experienced lawyer will also be able to advise you on what details to include in the agreement, ensuring that it's tailored to the needs of your business.
Find customisable legal templates online
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