changing employed staff to self employed-need advice!!!

[carlyhead2toe]

Hi
Wonder if any one can help,i run a beauty and nail salon with 5 staff employed currently,some have been with me nearly 5 years.I have been advised briefly to think about making them self employed but i dont know where to start!
I like the idea of not having to think about PAYE etc and maternity etc but i would still want staff to continue to work my way(which they have no problem with now anyway) i was thinking of a comission basis as i would supply all products,towels,pay bills etc,all they would supply is themselves!
would they still have a holiday entitlement? where do i stand regarding if they leave and take clients etc who were with the salon before the change?
I have no idea what level of comission to take,i dont want to rip them off but it has to be beneficial to the business and to the staff also.

Any help would be greatly appreciated!
Thanks.

 

[persianista]

Er, firstly I think you would have to make them all redundant. Personally any employer who tried to do this to me would end up in tribuneral. You cannot simply change peoples employment terms to save a bit of cash. How do your staff feel about no paid holiday, no maternity rights, no employment rights, no ssp rights?
Secondly, I think the revenue would be extremely interested in this. The rules governing mini businesses within a company are very strict, and unless everyone followed the rules exactly, it would be treated as a tax dodge.
Thirdly, you currently have ownership of the entire clientele. Do you really wish to give that away to your staff? self employed people "own" their clientelles. it ceases to become a sellable asset for the salon.

I really wouldnt advocate going down this road. I you still want to I would suggest that you seek the help of a specialist employment lawyer to help guide you.

 

[carlyhead2toe]

Er, firstly I think you would have to make them all redundant. Personally any employer who tried to do this to me would end up in tribuneral. You cannot simply change peoples employment terms to save a bit of cash. How do your staff feel about no paid holiday, no maternity rights, no employment rights, no ssp rights?
Secondly, I think the revenue would be extremely interested in this. The rules governing mini businesses within a company are very strict, and unless everyone followed the rules exactly, it would be treated as a tax dodge.
Thirdly, you currently have ownership of the entire clientele. Do you really wish to give that away to your staff? self employed people "own" their clientelles. it ceases to become a sellable asset for the salon.

I really wouldnt advocate going down this road. I you still want to I would suggest that you seek the help of a specialist employment lawyer to help guide you.

ok! thanks for that,i think?
Firstly, i know that there are guidelines to follow which i would make sure i did.Plenty of salons of this,legally with no problem, i was simply looking for advice of any other salon owners who may operate the same scheme for guidance.
There would be benefits to the staff also-they probebly would earn more money for themselves that way, a few of them have actually mentioned they would like to do this anyway so i wouldnt just be MAKING THEM!
Not everybody values security over anything else,they may appreciate the freedom and flexibility.
I do agree on the case of them taking clients and leaving though and this is something that concerns me but then i have had staff do this in the past anyway on an EMPLOYED basis so its not a guarentee that it wont happen.

I would appreciate any other opinions on this from anyone please!
Thanks

 

[persianista]

I know lots of other salon owners, plenty that rent rooms/ chairs etc. I rent rooms/ chairs myself in my own salons. I don't know anyone who has implemented a policy like this with long standing staff. Your staff may earn a bit more in the short term, but i can guarantee they will start squealing at holiday time when no work= no pay.
We have all had staff nick clients from us. What I was getting at is that the salon client base is a sellable asset, much more valuable than anything else. If you give that away, and decide to sell at a later date you have only a bit of secondhand furniture to sell. As no doubt you have spent time and money building your salon, it would seem terrible to give your most valuable asset away.
The revenue are increasingly savvy when it comes to employers doing this kind of thing. There are also vat implications involved.

 

[jes]

Even if you could persuade them to go from employed to self employed then you would have 5 individual self employed businesses working in your salon. You would loose almost all of your control over them as they would be responsible for themselves.

If you tried to dictate to them their hours, pay and work load etc, then you would still be classed as an employer even though they are self employed, please read this:- Contracts of employment

It's a very complicated matter and there's lots of laws (TUPE etc) which you could fall foul of as well as HMRC. I would advise you not to do anything until you've received expert legal advice.

I must just ask what is the reason for you doing it?

 

[carlyhead2toe]

Thanks for the advice! i will take it all into consideration before i make any decisions.

 

[Urban Geek]

I have rented space ina beauty salon where I had a contract stipulating that the clients belonged to the salon and that if I left I would not work within a 3 mile radius of the salon.

I do think you need proper legal advice.