Definition: Misclassification happens when a worker treated as an independent contractor — such as a booth renter — actually works like an employee under state law.

Why it matters for salons and spas

Misclassified renters can create workers’ comp, payroll tax and wage claims for the salon; rules are especially strict in some states such as California.

Example

A salon sets renters’ hours and prices, and a state agency later treats them as employees.

Related terms

Booth Rental Agreement · Workers’ Compensation

Learn more: booth renter vs. salon owner · full glossary · salon insurance questions.

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