Should booth renting be illegal in Washington State?
Yesterday I was flooded by texts and emails from our graduates on a Senate Bill that would make booth renting illegal in Washington State.
I initially thought was this was rumor, but upon research found this to be true!
The bill is known as SB 5326, which was introduced in the Washington State Senate earlier this week. If you would like to read the bill in its entirety, here is the (link).
For those that just want a summary, the Washington Department of Licensing provided the following:
The legislature finds that broad exemptions for businesses structured using booth renters deny individuals eligibility for unemployment insurance and industrial insurance, and give businesses that use booth renters an unfair competitive advantage. Therefore, the legislature intends to encourage a competitive marketplace by removing these broad exemptions for businesses that rely on booth renters. No holder of a salon/shop license may lease, sublease, or provide space at the licensed location to any person for providing cosmetology or hair design as part of a separate business to be conducted by the person.
Let’s unpack this:
First, this bill claims that businesses which allow for booth renting deny those ‘renters’ unemployment insurance and industry insurance. That claim is does not hold much water because booth renters are typically sole-proprietor (individual business owners) where unemployment insurance and industrial insurance does not apply. ‘Renters’ typically pay rent for a ‘chair’ or ‘room’ and operate their business within a salon/shop setting. These individuals are required to have their own salon/shop license, carry their own individual liability insurance, and have the freedom set their own prices, define their services, use their own tools, etc. It’s a model where you operate a business within a business.
Secondly, if passed the bill claims it would encourage a competitive marketplace by removing these exceptions. There are many arguments on what makes a competitive market but this claim unravels as you read further into the bill. The proposed bill would apply to ‘any person for providing cosmetology or hair design’ but is silent on master estheticians, estheticians and nail techs.
For my regulatory nerds that read through the bill, you’ll note in on Line 18, Section 3, a carve out (aka exception) is made for licensed barbers. Individuals that hold a Cosmetologist License or a Hair Design License will NOT be permitted to booth rent, but if you have a barber license, you ARE permitted to booth rent. If the bill’s goal was to encourage a competitive marketplace, why would it restrict certain licensees but allow for others to participate?
There are a lot of questions that I have. I hoping to attend the public hearing to learn more. If there are questions, are thoughts that you have, please share them.
For those of you that texted and emailed me if this bill was real? It is. Stay tuned.