California’s Bill 1513, originally signed into law in 2015, drastically altered the way salon and spa owners are now required to compensate their employees. Salon and spa owners may not be as compliant (though not necessarily intentionally) as they should be; these changes are causing much consternation among employees regarding their pay.
Classifications of Employee Roles
California’s labor code classifies salon and spa workers as “piece-rate” workers, not commissioned. The reasoning behind this is that the employees render services and don’t just sell them. Therefore, the work is considered “piece-rate.”
California’s Labor Laws provide the following definitions for clarity:
The piece-rate definition states it is compensation based upon a determinable amount paid for making a particular piece of goods or completing a particular task.
Commissioned employees are “principally involved in selling a product or service, not making the product or rendering the service, and their compensation must be a percent of the price of the product or service.”
Amendments to Bill 1513
In January 2016, California salons and spas also became responsible for tracking, reporting, and paying their hairstylists and massage therapists for “rest & recovery” time as well as “non-productive” time.
At a minimum, this time must be compensated at the current California minimum wage rate and must be a separate pay rate than the in-service rate.
Workers are considered to be on “Rest & recovery time” when they are on a break and during meals.
For time spent at work performing other tasks, (not providing services to clients), that time is considered “Non-productive time.”
This time includes:
- Assisting at the front desk
- Attending meetings
- Folding towels
- Sweeping the floor
- Technical training
- Waiting for clients
California salon and spa owners are no longer permitted to “average” the total dollars by the total hours worked. Productive time, non-productive time, and rest & recovery time must all be tracked, calculated, and reported separately.
Alternative payment methods allowed
Four different compensation options were introduced into Bill 1513 that California salons and spas are permitted to use and remain compliant :
- Commission/piecework: If not tracked and reported correctly, this method can cause issues with payroll. Be sure to monitor your work and see how that compares with your paystub; report any discrepancies to your manager, supervisor, or payroll department immediately and request a correction.
- Hourly pay: A salon or spa has the option to use a fixed hourly rate method that complies with all of the requirements in California Bill 1513, provided it is paid out at the current minimum wage or higher. If the hourly rate doesn’t meet the prevailing minimum wage, it will violate the law.
- Hourly plus commission: If your employer has opted to keep a commission structure in place, spa and salon owners are permitted to pay set hourly wages (at the current minimum wage rate) and supplement the pay with reduced-rate commissions for services rendered. Be sure you understand what those rates are before joining their staff.
- Team-Based Pay: Team-Based Pay (TBP) offers an opportunity for growth and cultural benefits. This method combines an hourly/salary program with a team bonus linked to such things as client retention, productivity, revenues, pre-booking, and retailing, as a group.
This approach rewards the performance of the entire group. However, this method is much more complicated to track. Before you join a salon or spa with such a pay structure, be sure you understand how the bonuses will be calculated and get something in writing that backs up the program.
Help from an Attorney
If you feel you are not getting paid in accordance with Labor Laws, have reported errors that your manager has neglected to correct, or that your pay is consistently wrong without a satisfactory explanation, seek legal advice to discuss your options.
At Aiman-Smith & Marcy, we focus on employment law, as well as consumer fraud, and class action suits. Our many years of combined experience will provide you the professional representation necessary to get you the best results.