This Episode is powered by Redken!! Redken is our favorite brand, with our favorite color gels. You know we love Shades EQ! Have you heard of Redken Exchange? You can take so many classes and hang out with all of our favorite people. Check out the schedule here.
On today’s episode, Elizabeth sits down with Myra Reddy, Director of Government Affairs with Professional Beauty Association. There conversation is a little more serious today as they discuss some of the politics that are going on in the hair industry right now, and how you can support and make the industry a better place!
Later on in the show, Frank joins us and he talks about things he has been doing to help the industry with these issues!
2:15 What is PBA and Myra’s Work Life
The Professional Beauty Association is the largest national trade association and represents the entire beauty industry. They are dedicated to advocating for the rights of all beauty professionals. PBA is also the company that puts on the International Salon and Spa Expo or ISSE, as well as many other events such as NAHA, and the Beacon Program, and the CosmoProf event in July! If you have a membership, you get perks to all of these events, and since they are a non-profit this money goes into providing educational content and giving back to the industry. They have the Cut It Out program that helps train licensed beauty professionals to see the signs of domestic clients in their clients. They also have a disaster release fund. This goes to helping individuals who have experienced a flood or some other natural event get back on their feet.
A monthly membership for a solo-stylist is about $50 a month.
5:50 What’s going on today with the Tax Tip Credit
The FICA Tax Tip Credit or The Small Business Tax Fairness and Compliance Simplification Act provides quality compliance in the small business industry.
HOW THIS WORKS:
When an employer goes to file their taxes, they receive a dollar for dollar credit on the FICA taxes paid on tipped income. If you are a compliant owner, all tips received by their employees in an employer based established need to be reported as taxable income. Right now, the employer and the employee pays a portion of tax on those tips, even the the employer does not gain any income from those tips.
If the salon owner is audited and fined for not properly reporting income or paying taxes, that fine goes back to the IRS and isn’t credited to the employee. We don’t want employees to be cheated out of them for their Social Security. Reportable income also has an impact on the Bureau of Labor Statistics description on what a stylist makes a year. Many times these wages are reported very low, which doesn’t look good for the beauty industry!
Right now, the beauty industry is being reported at only making $17,000 a year. This isn’t accounting for independent owners or self-employed individuals. These statistics are based on reportable income from the states. So when a company has to pay insurance for their employees, this gets reported. So booth renters and suite owners are not included in these statistics.
The median pay in 2018 was about $11.94 per hour. They do predict that pay will increase 8% which is faster than the average of other occupations. The median pay for year when starting out comes out to $24,830. If you go to their site, you can look at the descriptions, how they are coming up with the numbers, and different states in the work environment. PBA helps to ensure companies know how to run to ethically run their business and makes sure they are compliant. You can find these resources here! They have so different pages that break everything down and is very organized!
17:50 Welcome Frank to the Podcast and HOt seat
Frank has 70 employees and multiple salons and has been in the industry for so many years. He has been working hard to help with the FICA tax tip credit.
Frank first learned about everything when the IRS was looking at tip income as unreported income and one of his friends reached out to figure out ways they could help! Back then, there wasn’t anyone doing what Myra is currently doing. Everyone was working hard but not working together. Frank got involved and soon realized how devastating it can be to both salon owners and individual hair dressers.
The beauty industry is the 2nd biggest tip industry. So when this tip income tax becomes a thing, it actually pushes people to informality.
Elizabeth asks Frank if this affects people who are not owning a salon and don’t have an employer. The legislation primarily affects employers. The current law is that the individual has to understand and do all of the 1099 reporting.
28:00 WHAT YOU CAN DO!
On the FICA page, you’ll see 2 different buttons to take action! If you click and put your name and address in the spots, it will send a letter to your state representative! These are editable so you can change them if you want.
You can also donate to the issue advocacy fun.
As a community, we need to share this and support our industry!
If you want to get more involved, reach out to PBA! You can email Myra at myra@probeauty.org. You can talk to frank at Frank@zonaprofessional.com
We’re in this together people!
Always remember, we HAIR LOVE you!
Love what you’re listening to? Click here to subscribe to the newsletter and get notifications every time there is a new episode of Hair Love Radio!
