It’s safe to say that a trend has emerged whereby salons are engaging the services of contractors rather than full-time, on-staff therapists. And while using freelancers can certainly have its benefits (such as not being obligated to pay super, or annual leave pay), it’s worth considering both the wins and the potential risks when it comes to using the services of contractors.
It’s important to be clear on the differences between contractors and employees, says business expert Casey Welsh. “While employees are bound to a set number of hours and days of work in your salon, contractors have more control over their work and when they do it, yet they’re also solely responsible for for their own risks, profits or loss, while employees enjoy a regular salary, independent of company performance – except in the event of cut-backs,” says Casey.
So what is the best option? “That really comes down to your needs and expectations, as well as the kinds of people you choose to take on as contractors. There are some really great contractors out there that are loyal and determined to do good work, so if you find someone with that level of dedication, it can really work in your favour as you save on paying their benefits. But that said, having permanent staff can be preferable with regards to reliability, longevity and career progression within your company.”
It’s important though, to be clear on whether the people working in your salon are genuinely contractors or employees. That is, not meeting all of the criteria for a staff member, but being paid like a contractor. “There are strict guidelines on exactly what constitutes an employee and what constitutes a contractor,” says Casey. “If you feel like you’re in a bit of a grey area, get clarification from the ATO.”
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