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Nails salon owners, how do you pay your technicians?

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Xskyzx

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There's nail shop that pay w2s now bc the department of labor is breaking down for paying techs 1099 but treat them as employees. And I do know even though the owners pay them w2s they still take ( supplies fees for each customer) as in if you do a service they will take $5 off for supplies*. Theres so many wrongs in the nail business with vietnamese nail shops owner but no one is complaining to state board or department of labor.
So in just trying figure out a way to do the right way.
 

Xskyzx

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In the US an independent contractor is a self-employed person. They file IRS income taxes as self-employed, (schedule C) which means they pay all of the taxes due. (If employed the employee would cover 1/2 of taxes due.)

A self-employed person is expected to handle all monies, etc., and keep records. If that self-employed person has signed a contract accepting a commission as payment, then they are a contracted worker (and self-employed) and will receive a 1099 IRS form to include on their IRS forms.

One designation does not preclude the other.

The IRS guidelines specifically say that an independent contractor may be paid commission. That has no bearing on the classification. An employee may be paid on a commission basis as well. Many sales positions work that way.

In the 40+ years my husband and I have been in the business, in three states in the US, we have never seen an establishment that paid an hourly wage. The only time we did that was training new people. We paid them the minimum wage plus commission until they finished the advanced training we supplied. That way they could ease into the business. They received a W-2 as did all of our employees.

We paid on a sliding scale commission based on services rendered. Obviously, the more hours you worked the more you earned. Our prices were high enough that no one suffered for working part time. After experienced techs built a clientele base and were not taking new clients, that gave new techs a starting base.

It’s been a pleasure to see at least three of our former employees branch off and start viable businesses on their own. We still see each other and they still follow the business model they learned as beginners.
How did you get employees to come on time and leave on time even theres no customers? And tell the techs do proper ways and follow your rules.?
 

Xskyzx

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In 1992, I turned my techs loose as independent contractors in one of my salons, thinking I would save $ in payroll taxes, according to my tax advisor. (Hmmm? Why didn’t he do that with HIS office staff?)

It was a mess. Scheduling was random and no one could rely on the person next to them to be there in a pinch. Dress code didn’t exist, prices were changing willi -nilli, strange products were showing up. Clients were confused as to who they called for appointments, who the checks were to be made out to, etc.

After 5 weeks of crazy, everybody voted going back to employee status paid on a floating commission. Everyone was happy again. When I sold that salon 8 years later, it still had the original techs and 3 new ones.
Here and still going now as nail shop owner are paying techs as contractors and still force them to wear theirs uniforms, come in on time and leave on time . Exactly like a employee but pay them as a contractor.
 

jlsdds

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I’m sorry that you're either personally involved or someone close to you is experiencing bad practices. If you are comfortable in doing it, there is a form on IRS.gov that one can fill out asking for investigation of ‘misclassified employees’.

To answer your ? How we managed:
New techs came in because they knew they would have practice sessions all day. First, we would always introduce ‘Jane’ to the next person coming in. “Jane is our latest addition to the team and we know she will be pleased to take off your polish while your manicurist is getting ready for your appointment” or, ‘make your pedicure water just how you like it, or ‘wrap your gels’ or ‘help you choose a color’. Anything to get the client into ‘Jane’s’ chair for a bit. And usually they would slip ‘Jane’ a small gratuity.

My experience is that when you touch a person you form a kind of familiarity and if the regular tech isn’t available the client will be more likely to say ‘Oh, sure, Jane. She was really nice. I’ll book with her this time.’

We never had anyone balk at that arrangement. It was a sure business builder in our areas. We lived in Central Texas, Valparaiso, Indiana which is outside Chicago and Santa Fe, New Mexico.

When you have a successful business model new or experienced techs want to be a part of it.
 

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