RENT-A-CHAIR vs. EMPLOYEE - WHAT SALON/SPA OWNERS NEED TO KNOW
- EOHCB National
- Jun 3
- 3 min read
In the hairdressing, cosmetology, and beauty industry, salon/spa owners must decide between employing staff or offering a rent-a-chair arrangement. Both options come with unique responsibilities and legal implications. Misunderstanding the difference can lead to serious disputes, fines, or penalties.
The Rent-a-Chair Model Explained
Rent-a-chair (also known in the industry as a legal owner) means a self-employed person who rents a space (a chair or treatment area) in your salon/spa to run their own business. There are two types:
Type A: Renter has employees of their own.
Type B: Renter works alone with no employees (most common).
This is not employment. The stylist/therapist is an independent contractor, running a separate independent business.
What Qualifies someone as an Employee?
According to Section 200A of the Labour Relations Act, someone is presumed to be an employee unless proven otherwise. If your relationship with a stylist/therapist includes:
Control over work (how, what, when),
Fixed hours, uniforms, or client appointments set by you,
Payment via payroll or commission,
Use of your tools, products, or systems,
then the stylist/therapist is legally an employee, regardless of any contract calling them a "renter."
Critical differences: Rent-a-Chair vs. Employee
Aspect | Rent-a-Chair | Employee |
Business Structure | Own business inside your salon | Part of your salon business |
Control | Sets own hours, prices, services | You control working hours, procedures, prices |
Tools/Products | Supplies own, or pays rent to use yours | Uses your products and equipment |
Clients | Belongs to the stylist | Belongs to the salon |
Money Flow | Client pays the stylist directly or via rent | Clients pay the salon |
VAT and Tax | Must register for VAT if over threshold | Handled through PAYE by employer |
Sick Leave/Pension | Not entitled – must handle independently | Employer must comply with leave, UIF, pension |
Discipline | Cannot be disciplined by the salon owner | Employer can discipline staff under labour law |
Staff Integration | Not part of team or meetings | Full team member, part of operations |
What you CANNOT do with Rent-a-Chair Stylists/Therapists:
You cannot:
• Treat them like employees (discipline, set shifts, etc.).
• Include them in staff meetings or assign them duties.
• Give them uniforms or branding.
• Add their revenue into your business accounts.
• Pay them like employees (weekly wages, commission).
• Control their work standards, breaks, pricing, or services.
Doing any of these may trigger automatic classification as an employee, with fines or backdated benefits payable.
What you MUST do in a legitimate Rent-a-Chair setup:
Have a signed lease agreement for chair rental.
Ensure they:
o Are qualified and registered where necessary.
o Pay their own tax and VAT.
o Provide their own tools/products (or rent yours).
o Set their own prices and bookings.
o Invoice clients directly or have a separate point-of-sales.
o Use their own staff (if any).
They should not be included in:
o UIF, staff leave policies, or pension contributions.
o Internal systems, payroll, or advertising as part of your team.
Risks of getting it wrong:
If a rent-a-chair stylist/therapist is misclassified, they can:
Claim unfair dismissal.
Demand severance pay, leave pay, or pension backpay.
Trigger investigations from the Department of Employment & Labour or Bargaining Council.
Lead to fines for non-compliance with the BCEA and tax law.
Be Clear, Be Legal
If you demand control, loyalty, and consistency, hire employees—but prepare for the legal obligations. If you consider low overheads and less management, independent contractor arrangements can work, but they require careful legal structuring to ensure compliance.
Remember: calling someone a "renter" doesn’t make it so. The facts of the relationship determine their true status. Obtain expert advice, use proper contracts, and never mix the two models without clear boundaries.
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