Very few salon owners set out to break the law. Most of the issues we see come from habits that were passed down. You were trained in a certain way; the salon you came from operated a certain way, and it seemed normal. "That's just how salons work."

That phrase is worth pausing on. Industry habits can feel like rules, even when they aren't. Part of growing as an owner is willing to question practices you have never thought of, without beating yourself up for not knowing sooner.

Let's dive into all seven common areas. Laws vary by state, and many states set stricter rules than federal law, so treat this as a starting point for a conversation with an HR professional.

(1) ChatGPT or Any AI Platform: Does Your Salon Have an AI Policy

AI is already making its way into salons, whether owners realize it or not! From stylists looking up color formulas and chemical processes to managers seeking advice on employee situations, AI is becoming a go-to resource. But what happens when an employee follows AI-generated advice and something goes wrong

Without a clear AI policy, salon owners could find themselves navigating client complaints, confidentiality concerns, or employee misuse without established guidelines to back them up. An AI policy isn't about stopping innovation; it's about putting the right guardrails in place to protect your clients, employees, and business while ensuring professional judgment always comes first.

Your team may already be using AI, but are you prepared for when they use it the wrong way?

(2) Contractors Who Are Really Employees

Booth rental can be a legitimate arrangement. Problems start when a "booth renter" works the schedule you set, uses your products, follows your pricing, and books through your front desk. At that point, the relationship may look a lot like employment, regardless of what the agreement says.

A true "contractor" 1099, has their own hours, products, checkout system, and key to the front door.

(3) Unpaid Training and Education

Requiring stylists to attend a weekend color class, an evening product launch, or an in-salon education night without paying them for that time is a common risk. When training is required and job-related, the time is generally considered work time.

Many owners feel conflicted here. "I am investing in their growth. Why should I also pay them to be there?" That's an understanding feeling. It may help to view paid training time as part of that investment, and to budget it accordingly.

(4) Required Meetings Off the Clock

Monday morning team meetings, a quick huddle before opening, or a mandatory cleanup after the last client generally count as work time when attendance is expected.

(5) Timekeeping for Everyone

Even when pay is based on commission, hours generally need to be recorded, so you can confirm each stylist earns at least minimum wage for all hours worked in a pay period. A slow week can create a gap that the salon may need to make up.

(6) Deductions from Wages

Taking the cost of a dropped flat iron, a client walkout, or product overuse out of a paycheck is restricted in many states and can bring a paycheck below minimum wage. Even where some deductions are allowed, they often require written authorization.

(7) Incomplete Employee Records

Maintaining accurate and up-to-date employee records is essential to protecting your business! Payroll records, timekeeping records, tax documents, and I-9 forms all have specific retention requirements. If an employee raises a concern or files a claim years after leaving, missing documentation can make it difficult to demonstrate what actually occurred.

Make sure your records are complete, organized, securely stored, and retained for the legally required period, even after an employee leaves your organization. As a best practice, consider a five-year retention schedule where appropriate, while recognizing that certain documents have different legal requirements.

The self-awareness piece

When you read a list like this, notice your first reaction. Some owners feel defensive: "No one has ever complained." Others feel a wave of anxiety and want to fix everything overnight. Some feel quiet relief that someone finally named what they suspected.

Each of those reactions tells you something. Defensiveness may point to a belief you're protecting. Anxiety may point to a fear of being seen as a bad owner. None of those feelings make you a bad owner. They simply make you human. The goal is to notice the

reaction, let it settle, and then look at the facts with a clear head. Don't turn to an AI

search bar for employee advice, reach out to someone that can really help guild.

A simple place to start:

• Choose one area from this list that you feel least sure about.
• Look at how it works in your salon today, not how you assume it works.
• Bring your questions to a qualified HR professional.
• Fix what you find going forward and get advice on whether past issues need attention.

Disclosure: This article is general information, not legal advice. Because laws differ by state and situation, it's wise to review your specific practices with a professional.

In our next blog, we will dive deeper into your AI policy and what it means for your business.

About the Authors: Both with Paragon HR Consulting,Danielle Stewart is Oresident and CEO of Paragon HR Consulting and Ashley Rivera is the HR & Business Development Partner.