January 2009

PBA Tracks Political Changes

By Sam Leyvas

It is imperative to understand some of key issues facing the beauty industry and to understand what they will mean for everyone’s bottom line.

The professional beauty industry can expect politics to play an increasing role in how the industry conducts business and moves forward as a whole.

President-elect Obama is set to take office, there is a Democrat controlled congress and changes coming to many state legislatures.

As the voice of the professional beauty industry, the Professional Beauty Association (PBA) aims to keep its members and the entire beauty industry abreast of legislation that has the potential to affect their businesses, as well as provide a collective viewpoint to Congress and other government officials on the ramifications legislation could have on the industry.

Negative Impact: It is important to understand the proposed “card check” law, known as the Employee Free Choice Act. This law could have a significant affect on the beauty industry and many other main street businesses. Card check would make it cost-effective for unions to go after such businesses as beauty and nail salons, spas, restaurants and other retail establishments, which have never experienced unionization before.

The law would eliminate the secret ballot process currently used for unionization in the workplace and replace it with a card check system. Once a union persuades more than half of workers to sign membership cards, simply having that percentage of signed cards would automatically certify the union.

Without the secret ballot process, card check would expose employees to intimidation and bullying tactics from union organizers. Ultimately, it would deprive them of their right to vote in private. From large-scale beauty manufacturers to individual beauty professionals, this is a law that could have serious consequences for the beauty industry.

Positive Impact: On a happier note is the FICA Tax Credit for Salons and Spas. The PBA has actively supported this proposed legislation for the last several years. The bill’s principal sponsor, Rep. Shelley Berkeley of Nevada, has retained her seat in the U.S. House and has poised herself to keep this issue a priority. Additionally, 2009 and 2010 are likely to be years in which we will see a flurry of tax legislation in Congress – giving our industry newfound opportunities to advocate for a FICA tax credit.

The FICA Tax Credit would give salon and spa owners a dollar-for-dollar tax credit on the FICA taxes paid on employee’s tip-income – employers currently do not share that income but are taxed on it – putting the professional beauty industry on equal footing with the restaurant industry. This legislation would significantly help the industry to lower its tax liability and allow owners to further invest in their businesses.

Positive Impact: Credit card interchange fees may be decreasing. For years, small businesses like salons, spas, restaurants and other merchants have been waging a quiet war with the credit card companies over interchange fees – the hidden costs of processing credit and debit card transactions that can gobble up a store’s profits while earning banks a pretty penny. With a new Congress set to take power in January, we’re likely to see the resurrection of the Credit Card Fair Fee Act.

This federal legislation would require credit card companies with substantial market power to negotiate with merchants and retailers on terms for fees paid when processing card transactions. Interchange is a percentage of each transaction that credit card companies collect from merchants on every purchase. The fee varies with type of card, size of merchant and other factors, but as much as $2 of every $100 consumers spend goes to card processors.

Positive Impact: Another nice change could be the License Mobility Petition. At the state level, the PBA is working on raising awareness with state legislatures about license mobility. Salon professionals can sometimes face state regulations that limit their ability to practice their craft and conduct business when moving across state lines. License mobility allows a licensed professional certified to be in good standing to qualify for licensure from one state to another without further examination.

To sign the petition and support other stylists across the nation, visit probeauty.org/licensemobility.

To learn more about other issues that have the potential to influence our industry or to get involved with the PBA’s government affairs efforts visit probeauty.org/advocacy.

Sam Leyvas is the director of government affairs for the Professional Beauty Association. He is responsible for tracking legislation and regulations at the federal and state level, keeping PBA’s membership informed of issues relevant to the beauty industry and informing members on how they can become active in government affairs issues. For more information, contact him at 800-468-2274 x3437 or sam@probeauty.org.