Larry, We've been doing a little restructuring lately and it has brought up a question I'm sure you can answer. Is it acceptable and/or legal for our salon to charge a service charge? We appreciate your input. Kim
Kim, I hope finds you well. You had asked whether or not it was legal for a salon to use a service charge. When you say service charge, I presume you are meaning that the commission stylist is paid a percentage, such as 50%, and then there is a 5% commission that is subtracted out as a service charge.
Although employment law can be somewhat complicated and there are some variances from state to state, service charges are a legal method of calculating the compensation, as long as the individual is paid at least a minimum wage.
It's a pleasure serving you!
Larry Kopsa CPA
Kim, I hope finds you well. You had asked whether or not it was legal for a salon to use a service charge. When you say service charge, I presume you are meaning that the commission stylist is paid a percentage, such as 50%, and then there is a 5% commission that is subtracted out as a service charge.
Although employment law can be somewhat complicated and there are some variances from state to state, service charges are a legal method of calculating the compensation, as long as the individual is paid at least a minimum wage.
It's a pleasure serving you!
Larry Kopsa CPA
