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Esthetic Endeavors

Judith Culp

CLICK HERE Employee or Independent?

See theWhole Picture Before You Decide

Whether a person is an employee or an inde-

pendent contractor is a question that has per-

plexed people in the beauty industry for many

years. It is a major factor to consider when first

setting up your business. Look at the whole picture

before you decide.

Business owners have to consider many factors

to build a successful practice. First they have to

know who their clients are since those clients will

dictate what days and hours the business needs to

be open to meet their needs.

Then an owner uses client demographics to

select services and pricing. When hiring, they are

concerned with the new employee meshing with

existing staff and with the client base.

Throw in economics in this decision and that

makes this decision more complex. Owners have

to think about taking on the responsibility of em-

ployees. They consider whether they will be paying

out more than the technician is bringing into the

business. It’s hard reality to consider that when you

hire a new person, it will take a while before they

are profitable to the business.

New hires need mentoring and training. The

business owner spends time and money training

a technician and building them to be profitable.

Then, just when you get them trained, the techni-

cian may decide to go into business for themselves

thinking they can make more money that way.

When considering this concern, a salon owner

may decide to go with independent contractors.

Going this way comes with its own set of problems

including legal and tax issues if you don’t have the

right information to set it up correctly in the first


All beauty professionals need to know the

IRS worker classifications. The IRS has created

a workbook called, Employee or Independent

Contractor. The booklet is free to download at .

These are the three key areas the IRS looks at to

determine work status:


If you receive extensive instruc-

tions on how work is to be done, this suggests that

you are an employee. Instructions can cover a wide

range of topics, for example, if you are told how,

when, or where you are to do the work; or what

tools or equipment to use; or what assistants you

need to hire to help with the work; or where to pur-

chase supplies and services.

Less extensive instructions may indicate an in-

dependent contractor, that is being given direction

on days worked may not be a concern but direc-

tions on procedural “how-to”may indicate employ-

ee classification. The business may provide training

about required procedures and methods. This