Senate Commerce Committee Statement to Senate, No. 1503 — State of New Jersey (December 4, 2023)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 1503, State of New Jersey, dated December 4, 2023, reporting the bill favorably with committee amendments. As amended, the bill creates a chair or booth rental license for individuals already licensed by the New Jersey State Board of Cosmetology and Hairstyling who rent a chair or booth from a licensed shop owner under a written contract. Shop owners may not enter such arrangements unless the licensee holds the rental license, and the board may inspect shops where these arrangements exist. An individual working in a licensed shop is deemed an employee unless a written agreement names the individual an independent contractor and the individual holds a booth rental permit and has paid the fee. The statement says the bill is identical to Assembly Bill No. 1507 (2R).

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
1503

STATE
OF NEW JERSEY

DATED: DECEMBER
4, 2023

The Senate Commerce Committee reports favorably and
with committee amendments Senate Bill No. 1503.

As
amended, t his bill establishes a new chair or booth rental license for
qualifying individuals, who already are licensed by the New Jersey State Board
of Cosmetology and Hairstyling to perform cosmetology and hairstyling services
or ancillary services, in cases when these individuals engage in a business
arrangement entered into by a written contract whereby they rent or lease a
chair or booth from the owner of a shop that is licensed by the board. The
bill specifically provides that no licensed shop owner shall enter into a chair
or booth rental arrangement unless the practicing licensee holds a chair or
booth rental license as provided in this bill. Additionally, the bill
authorizes the board to inspect shops when chair and booth rental arrangements
exist.

An individual applying for a chair or booth rental
license shall: make application to the board on forms as it may require; and
pay a fee as required by the board. In addition, the bill stipulates that the
board shall promulgate rules and regulations relating to the information to be
submitted for a chair or booth rental license, including information regarding
an applicant’s compliance with State and federal tax laws.

The bill provides that the board shall maintain a
record of all individuals holding chair or booth rental licenses, which
licenses shall be renewable on a biennial basis.

A license for a chair or booth rental is renewable on
a biennial basis. An application for renewal of a chair or booth rental
license is to require an indication if the rental license is for a chair or
booth in a mobile facility and if so, the name and shop license number of the
mobile facility. The bill also clarifies that a shop owner is not to enter
into a chair or booth rental arrangement with an individual unless that
individual holds a license to provide cosmetology and hairstyling services for
which the shop is licensed and holds a chair or booth rental license. The
individual with a chair or booth rental license cannot provide services that
are outside the scope of the services the shop is licensed to provide.

Moreover, an individual
performing cosmetology, hairstyling, or other ancillary services in a licensed
shop shall be deemed an employee of the shop, unless the following applies: (1)
a written agreement exists between the individual and the shop specifying the
following: that the individual is an independent contractor; that the shop has
no right to control the methodology used by the individual to produce a given
result; and the amount of rent to be paid by the individual to the shop,
whether calculated at a fixed percentage of the individual's gross receipts or
a flat fee; (2) the individual possesses a booth rental permit issued by the
board; and (3) the individual has paid a booth rental permit fee to the board.

The bill also
stipulates the steps to be taken by an individual when submitting an
application for a chair or booth rental, which includes inspection of the
premises where the chair or booth will be located. Mobile facilities’ ability
to allow for chair or booth rentals are also incorporated into the bill. The
bill also prohibits a licensed shop from allowing a person to be an employ,
under the shop owner’s supervision, or be an independent contractor and
practice cosmetology, hairstyling or ancillary services who does not possess an
appropriate license issued by the New Jersey State Board of Cosmetology and
Hairstyling.

As amended and reported by the committee, Senate Bill
No. 1503 is identical to Assembly Bill No. 1507 (2R), as also amended and reported
by the committee on this date.

COMMITTEE AMENDMENTS

The committee amended the bill to:

(1) incorporate chair or booth rental licensure into
mobile facilities;

(2) authorize inspections of shops with chair or
booth or rentals;

(3) create a standard to distinguish between
individuals who are employees of a licensed shop and those who are independent
contractors working in a licensed shop;

(3) require the practicing licensee seeking a chair
or booth rental arrangement to hold both a license in the same cosmetology and
hairstyling services for which the shop is licensed to provide and a license
for a chair or booth rental;

(4) prohibit a practicing licensee with a chair or
booth rental arrangement from offering services beyond the scope of services
that a shop or mobile facility is licensed to provide;

(5) require an inspection of the premises prior to
the issuance of a chair or booth rental license;

(6) add the requirement for a licensed shop that any
individual who is an employee or independent contractor working in a licensed
shop have the requisite license or registration applicable to the individual’s
position;

(7) establish protocol for the board for the issuance
of chair or booth rental licensure; and

(8) make technical corrections.

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