Why ‘Hours Owing’ Is a Bad Idea in Your Salon

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Posted October 31, 2016

Happy Halloween. Halloween doesn’t have recognisable songs or holiday days associated with it, and it falls on a busy time of year. With Halloween and Melbourne Cup and all the fun and festivities associated with both, it is timely to give you HABA’s view on why we believe ‘Hours Owing’ is a bad idea for your salon.

HABA receives many questions from employers regarding utilising an ‘hours owing’ system and HABA strongly advises against implementing such a system in your salons. This is a high risk factor for salon owners for a number of reasons.

What is ‘hours owing’ exactly?

Some salons are allowing employees or directing employees to leave early on the provision that the employee will ‘owe’ the salon a number of hours which can be utilised at another point in time, such as during a busy period in the salon.

Why is this risky for salons?

This system is risky for a number of reasons, the first being if the employee leaves the salon there is no guarantee the employer can recover costs for any hours paid for which are unworked without exerting more time drafting letters of demands and going through a court system.

The Hair and Beauty Award indicates that over time is considered to occur when an employee works in excess of the ordinary hours in their contract. This tends to happen when the employees ‘repay’ the hours which are owed to the employer. Therefore by utilising the system and not paying the employee at overtime rates (time and a half for the first three hours and double time thereafter) are considered to be in breach of the award.

What can I do instead?

If your employee is insisting on finishing work early the employee must provide you with documentation prepared by themselves of their request to leave work early and the fact that they understand they will not be paid for the time they do not work. Employers would then sign off to approve the request and the employee would be on authorised unpaid leave for the remaining hours of work that day.

Employers cannot send a permanent (full time or part time) employee home early without pay. Therefore if it is quiet in the salon HABA advises finding other productive duties your employee could be undertaking such as cleaning or training on retail product in opposition to directing the employee to go home. Any direction by the employer for an employee to go home early must be paid for under the Fair Work Act and should not be taken from leave entitlements.

Need to talk with HABA’s team of IR Advisors call today on 02 9221 9911 or visit www.askhaba.com.au