Author Archive

ESG

The author, Silvia Sanchez, graduated from the University of Alberta with a B.A. in Psychology and has over 15 years of experience in the career-consulting field.

Renting Chairs: Who is responsible for EI?

DO I HAVE TO PAY EI FOR CHAIR RENTERS?

Did you think Employment Insurance and Chair Renters would never come up in the same sentence?

In 2019, CTV NEWS Saskatoon did a report on how salon owners that rent our chairs are impacted by Employment Insurance fees imposed by the Canada Revenue Agency (CRA).

The report focuses on Stacey Zielinski , owner of The Beach Beauty Bar in Martensville, Saskatchewan. Like many others, Stacey was under the impression that chair renters are independent contractors and therefore are not governed under employment laws and regulations.

Luckily for Zielinski, her tab was not too high, as only 1/5 hairstylists was a chair renter. This got us thinking though,

how does this impact the industry?

What does this mean for salon owners who only rent out chairs?

Renting out chairs to hairstylists has always been an attractive option for salon owners. Renting out chairs produces consistent income, removes employee-related issues, and was formerly believed to eliminate the cost of wages and MERCS.  

It is widely believed that the salon owner does not pay money to the renter; but they do however collect money from the renter. Typically, the hairstylist pays a monthly fee to offer services to their growing clientele from an already established salon.  In exchange for this fee, the salon owner allows use of the chair and fixtures during operating hours.

Contrary to popular belief, salon owners are liable to pay Employment Insurance fees to the CRA for chair renters. Normally, independent contractors from other industries are not eligible for EI, however, there is an exception for barbers and hairstylists.

Normally, EI is paid to employees based on the hours worked per pay period. Because chair renters dictate their own hours, the CRA calculates EI fees on the number of days the chair renter offered services in the establishment.

Why is there an exception for barbers and hairstylists?

As it was explained by a CRA representative, this exception was put into place to secure the income of a hairstylist in the event that the salon owner is no longer able to provide the chair renter with a space to work from. Examples are salon owners who are evicted from their rented space or go out of business.  

What is the difference between independent contractors in the beauty industry versus other industries?

Nothing really. We searched for answers but could not find a clear explanation for this exception.

The exception to the exception.

While a salon owner must pay the employer portion of EI fees for independent contractors, this fee is eliminated IF the chair renter is incorporated.

What is the difference between a sole proprietorship, a partnership, and a corporation?

All of the above are forms of entrepreneurship. They differ in a few ways including the annual costs and taxes payable to the CRA. The main difference is that in a sole proprietorship or partnership, the business is an extension of you (and your partners if applicable) whereas a corporation is viewed as an entity external to you.  It even has its own SIN, however, it’s called a BN (Business Number).

There are many benefits to registering your business as a corporation. Learn more.

Where does this legislation come from?

It is believed that this legislation was created to protect the income of women and single mothers based on the occupation’s demographic at the time the legislation was created.

Two conditions apply to this employment insurance regulation:

  1. The barber or hairstylist offers services out of the establishment.
  2. The barber or hairstylist is not the owner of the establishment.

What if the salon owner also owns the building?

Unfortunately, it doesn’t matter. Salon owners who own the building must also pay EI fees.

What if the hairstylist does not pay EI?

Unfortunately, it doesn’t matter. The onus is on the salon owner to pay the employer portion of a chair renter’s EI whether or not they pay their own premiums.

Does this legislation affect room rentals for esthetics services?

No, this legislation only applies to Hairstylists and Barbers at the time this article was published.


EXECUTIVE SPA GROUP 

Beauty Industry Resource Centre

(780) 604 2772

Continue Reading

beauty home business,home business,starting a beauty business

Starting a Home Business

Are home businesses lucrative?

You bet they are! As long as you manage your business with the same effort and respect that you would a store-front, these businesses can bring in a lot of income with fewer expenses, leaving more money in your pocket!

What do I need to have a home business?

First, register your business.

You must register your business name. There are a few choices for you when registering your business, most people who run a small business opt for a sole proprietorship.

You will also need a business license, not to be confused with your hairstyling license or esthetics certification.

You will also require a business license and a development permit. This type of license is granted by the city. Home-based business must follow special regulations since they are located in neighbourhoods designed for living, not business.

Zoning bylaws are used to determine whether the city can grant you a home business license. Don’t be surprised if your neighbours are contacted to ask if they are ok with your particular business being on the same street as them.

Beauty industry home businesses are MAJOR businesses.

Because beauty industry businesses have clients coming to the home for services that are not typical of a residential area, they are considered a major home business. Major home businesses cause a degree of interruption to the neighbourhood, for example, less parking available for residents and their guests, versus minor businesses that typically do not receive clients in their home.

What about insurance?

Insurance is important for any business, including a home business. There are some insurance companies that specialize in beauty industry insurance, an insurance broker may be able to help you find the right company for you. Your insurer should understand the specific challenges of beauty industry businesses. Some insurance companies serve both home and business.

Fees and other things to consider.

Registration/licensing/insurance all cost money. Luckily, home businesses today have the advantage of free marketing on social media! Instagram in particular is an excellent tool used by all beauty industry businesses, but has a spectacular impact on home businesses. Many clients use instagram as a way to find their service provider, who quite often has a home business.


EXECUTIVE SPA GROUP

Continue Reading

beauty careers,beauty industry,personal care service provider,service provider,small business

Earning Tips as a Beauty Industry Entrepreneur

Tips as a self-employed person

All Service Providers know that tips make a big difference! They are a great way to plump up that bottom line. To a degree, entrepreneurs have the ability to maximize their potential for tips by controlling different aspects of service delivery.

Service Providers who are self-employed have control of every detail of the client’s experience. For example, décor, cleanliness, and punctuality are only ripples in the vast sea of customer excellence you can offer to attract a certain clientele.

Tips are a game changer, however, it can get a bit confusing when it comes to claiming them come tax time, especially if you pay yourself as an employee, or have employees.

Do I include tips when calculating CPP and EI deductions?

There are 2 types of tips.

  • Controlled
  • Direct

Controlled tips

Controlled tips are mandatory to the client. For example, spa parties may include a mandatory 18% gratuity that is included in the bill. If you include or “control” the tip amount in the final bill, then these tips must be included in the insurable earnings (wages + VAC pay + tips + commission). Anything considered “insurable earnings” must be accounted for when calculating the EI and CPP deductions.

Direct tips

Direct tips are out of your control. A client may or may not tip you or your service providers. Only the client is in control of the amount of tip they choose to leave. You as the employer are simply passing the tip from the hands of the client to the hands of your service provider. Direct tips are NOT considered insurable hours and are therefore not included when calculating EI and CPP deductions.

The declaration of tips is the responsibility of the tip reciever when filing their personal taxes.


Learn more about tips and gratuities.

EXECUTIVE SPA GROUP

Beauty Industry Resource Centre

(780) 604 2772

Continue Reading

bacteria,beauty industry experts,inspection,personal care services,sterilization

Is your salon/spa inspection ready?

BACTERIA IS A BEAUTY BANISHER

As Service Providers, we aspire to send clients home feeling amazing and relaxed. We know what it takes to make our clients look their best, but do we know how to protect our clients?

Germs and viruses will turn that amazing service upside down!

Let’s take a look at some of the guidelines set out by Alberta Health Services to keep our clients looking gorgeous, glowing and most importantly- germ-free!

Some serious viruses and infections can be and have been known to be spread in salons and spas.

Hepatitis C, MRSA, respiratory disease, fungus and even Hot Tub Folliculitis (an infection caused by a type of bacteria that thrives in poorly sanitized foot baths) have been confirmed.

Are You Inspection Ready?

These are some of the guidelines to follow to help you protect your clients:

  • All work surfaces shall be constructed of smooth, non-porous and cleanable materials (i.e. painted drywall, vinyl composite tiles, linoleum or sealed concrete, etc.).
  • Work areas must be adequately lit and ventilated.
  • Client contact surfaces (tables, chairs, headrests etc.) must have a smooth, non-porous and easy to clean finish.
  • Adequate storage space must be available for equipment, instruments and supplies.
  • Suitable garbage containers must be readily available, maintained and emptied regularly.
  • Approved disinfectants for disinfecting equipment, surfaces and reusable instruments must be available.
  • An acceptable skin antiseptic shall be provided for skin preparation and post treatment.
  • Items, that cannot be properly disinfected/sterilized or are intended for single use, must be discarded after each client use.
  • A puncture-resistant container shall be provided for the disposal of needles, razor blades and other sharp devices or instruments.
  • Pigments, cosmetics and other supplies must be labeled and handled in accordance with the manufacturer’s instructions.
  • Chemicals, detergents and cleaners must be stored, maintained and prepared in accordance with the manufacturer’s instructions.

The spread of bacteria is completely preventable and should be the #1 priority.

So, remember to follow all sanitization procedures and use the proper level of disinfection tools. Because no matter how gorgeous your client looks when they leave, a bacterial infection traced back to you is a BEAUTY BANISHER!

Please refer to the Personal Service Regulation and the associated Health Standards and Guidelines for a complete list of requirements.


EXECUTIVE SPA GROUP

Continue Reading

alberta,beauty career,career transition,edmonton

Career Transitions

career transition

Changing Careers After 30

If your work culture and mission are not parallel to your personal values, it is only a matter of time before you decide no amount of money is worth your time at your current job.

Changing careers is scary but its more common than you think. We have a theory based on observations, our knowledge of human behaviour, and our understanding of social psychology: We go through multiple career changes due to an abundance of career options, and our values changing as we mature.

Many people choose the now-known-as Personal Care Services industry. There are several ways to join, but first we recommend becoming fully informed before making life-changing decisions. We believe choosing a career is dependent among many factors, for example, interests, abilities, work values, personal values, and future life plans.

Where to begin…

ALIS is a great place to start your research. This website will help you gather information about the credentials necessary to reach your goal, and what you can expect in terms of job duties, salary and wages, occupational outlook, plus more!

In addition, if employment is your goal, review job banks in order to have an idea of how likely you are to find a job after training.

However, if you are interested in self-employment, a great tool to start with is the Business Link.


At ESG, we specialize in beauty industry careers. If you are thinking about changing careers. furthering your education, or transitioning back to employment, we can provide industry information and career and employment consulting to help you make the right decision.

Use our online TRAINING 411 Beauty Educator directory to help you get started!

EXECUTIVE SPA GROUP
(780) 604-2772 (Call or Text)
info@executivespagroup.com


Continue Reading

Executive Spa Group

info@executivespagroup.com
(780) 604-2772
executivespagroup.com
| | |

Service PRO

Employers

Educators