So, you've decided to expand your salon team – congratulations! Bringing new talent on board is an exciting step in growing your business. But, before you jump into the hiring process, it's crucial to get some legal peace of mind. One critical aspect is creating a salon employee contract that protects both you and your staff. But what exactly should be included in these contracts? And how can you make sure they're legally sound?

In this article, go over everything you need to know about salon contracts for employees, from essential elements to common pitfalls to avoid. After reading this article, you'll get a better idea of how to create a solid foundation for your working relationships, ensuring a happy and thriving team. Okay, let's dive in!

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Key Components of a Salon Employee Contract

A well-crafted salon employee contract is essential for setting clear expectations and protecting both your business and your team members. Before we dive into the specific components, remember that GlossGenius offers a comprehensive salon management platform to help you scale your business, manage your team, and streamline your operations. Check out their salon management software for teams here.

Now, let's explore the key components that should be included in a salon contract of employment:

Job Title and Description

Every salon employee contract should start by clearly outlining your employee's job title, duties, and responsibilities.. This ensures that both you and your employee understand their role within your salon and sets the groundwork for performance evaluations.

Of course, this job description on the contract should reflect what was in your job application or what you may have discussed with your potential hire. The last thing you want to do is confuse potential employees by stating one thing in your application but they stating something else in the official contract.

Compensation and Benefits

Detail the employee's salary, commission structure, or hourly wage, as well as any benefits they're entitled to, such as paid time off, health insurance, or retirement plans. Including this information in the contract helps avoid misunderstandings and disputes about pay and benefits.

Some ways you can pay your salon employees include:

• Giving them an hourly wage
• Giving them an annual salary
• Paying based on commission
• Team or performance-based pay

If you want to dive deeper in how you can pay your salon employees, be sure to check out our article on this topic.

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Work Schedule and Hours

The next thing you want to include is your employee's expected work schedule, including days and hours of work, as well as any flexibility or expectations around overtime. This section can also address policies for requesting time off or shift changes. This will help you manage your time better as a business owner and ensure your employees don’t get burned out.

Employment Status

​​Here you want to clarify whether your employee is a full-time, part-time, or temporary worker, and if they are an employee or an independent contractor. This distinction is crucial for tax purposes and determining their eligibility for benefits. You should also determine your booth rental agreement if you decide to go that route when hiring staff.

Generally, independent contractors are a bit easier to manage if you’re just starting out. This way, you don’t have to worry about providing benefits and insurance and you can write off your expenses from your taxes (make sure to see the legal laws of your state or country on this). Independent contractors are also responsible for filing their own taxes so, while it may be appealing to some people, others may prefer being an employee. So make sure to clarify this in your salon independent contractor agreement.

Confidentiality and Non-Compete Clauses

This is where you include clauses that protect your salon's confidential information and trade secrets. A non-compete agreement may also be appropriate to prevent employees from working for competitors or starting a competing business within a certain radius or time frame after their employment ends.

This all depends on your preference as a business owner, so make sure to contact a local expert on this matter as laws tend to change region to region.

Performance Reviews and Evaluations

Here you want to outline the frequency and process for performance reviews and evaluations. This sets the stage for open communication and feedback, allowing you to monitor your employee's progress and growth within your salon.

This will also give employees a better understanding of how and when they can expect things like a promotion or salary increase. Again, this all depends on how you want to structure your salon business and the type of culture you want to create within your team.

Termination and Notice Period

This is where you specify the conditions under which the employment contract can be terminated by either party, along with any required notice period or severance pay.

Generally, these laws are created on a state or country level. It’s proper etiquette for an employee to give a two week notice before they leave, however businesses have the right to let anyone go at any time. Make sure to consult with a legal expert on this matter and if you decide to go the independent contractor route, that you specify in your contract that either you or the party you are working with has the right to terminate.

Dispute Resolution

This one is not something many salon owners think of. But, it could be beneficial to include a dispute resolution process in the contract, such as mediation or arbitration, to address any conflicts that may arise during the course of employment.

Remember, a well-rounded salon management platform like GlossGenius can make managing your growing team a breeze, so don't forget to check out what it can do for your business.

Signature and Date

Lastly, every salon employee contract should include a space for both parties to sign and date the document. By signing the contract, both you and your employee acknowledge that you understand and agree to the terms outlined within it. This legally binding agreement helps ensure that both parties uphold their responsibilities, providing a foundation for a successful working relationship. Don't forget to keep a copy of the signed contract for your records and provide one to your employee as well.

Tips for Crafting an Effective Salon Employee Contract

Creating a salon employee contract can be a daunting task, but with a few key tips, you can ensure that you're crafting an effective and comprehensive legal document to protect both you and your employees.

Now that we’ve gone over some key components of a salon employee contract, here are some suggestions to help you further improve your contract:

Be Clear and Concise

It’s no surprise that a well-written contract should be easy to understand and free of jargon or complex legal terms. Use clear and concise language to ensure that both you and your employees fully understand the terms and conditions.

Try using a tool like Grammarly to remove any grammatical errors and have a friend or two read over the contract to help you catch any mistakes in the fine print.

Keep It Fair and Balanced

At the end of the day, business is about people and communication. A small business is simply a group of people that come together, with the same goal, to bring value to their community. It’s important to note that your contract should always create a win-win situation for both you and your employees.

Your contract should be fair to both parties involved. While it's essential to protect your salon's interests, it's equally important to respect your employees' rights. Strive to create a balanced employment agreement that promotes a healthy and productive work environment.

Consult with a Legal Professional

To ensure that your salon employee contract is legally sound and compliant with local labor laws, it's always a good idea to consult with an attorney or legal expert. They can provide valuable insight and guidance, helping you avoid any potential legal issues down the road.

If you’re not sure where to start with this, you can ask other self-employed salon business owners how they approached the legal side of their business (yes, just go to their salon and ask!). Oftentimes, they may be able to refer you to someone who specializes in beauty salon business law and help you avoid Googling for lawyers that you may not have previous experience with.

Customize Your Contracts for Each Individual

Depending on if you decide to hire an employee, or go with an independent contractor agreement, it’s important to customize your contract to fit each individual case you are dealing with. While it's useful to have a standard contract template, remember that every employee's role and responsibilities may differ. It’s a good idea to have a general template, but make sure you tailor the contract to each individual, addressing their specific job title, duties, and any unique terms or conditions that may apply.

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Update Your Contracts Regularly

Laws are always changing. Because of this, it’s a good idea to have a lawyer or professional review your contract every year or so to make sure you are still following guidelines and regulations related to your local area.

Also, as your salon scales over time, you may need to revisit your business structure and how you run your salon. So it’s good to develop a habit of regularly reviewing and updating your employee contracts to make sure they remain accurate and relevant. This can you help prevent misunderstandings or conflicts in the future.

Use GlossGenius for Team Management

Lastly, it’s a good idea to use a salon software tool that is widely adopted by other salons. Whether you’re a hair salon or hairstylist, beauty therapist, esthetician, nail technician or nail salon, it’s important to find a trustworthy platform to build your business with. This is why over 40,000 salon owners trust GlossGenius to scale their business and manage their team effectively.

By using GlossGenius’ salon management software for teams, you can simplify the process of onboarding new employees, organizing schedules, and tracking performance. And by streamlining these processes, you can focus more on providing exceptional service to your own clients and expanding your salon.

Try GlossGenius free for 14 days!

Manage & Grow Your Salon Team With GlossGenius

Knowing how to construct salon employee contracts is a critical aspect of running a successful salon business. By taking the time to create a comprehensive and legally sound agreement, you can protect your business, foster a positive work environment, and ensure that both you and your employees have a clear understanding of expectations and responsibilities.

Remember, the key to a successful salon employee contract is clarity, fairness, and regular updates. With these elements in place, you can build a solid foundation for a thriving salon and a dedicated team of professionals.

As you work on growing and managing your salon, don't forget the importance of having the right tools to support your business. GlossGenius offers a comprehensive salon management platform that simplifies team management, scheduling, performance tracking, and more.

To take your salon management to the next level, be sure to sign up for GlossGenius' free trial today! Experience firsthand how GlossGenius can help you streamline your processes, support your team, and ultimately grow your salon business to new heights.