By Khris Batts
Groomer pay is a polarizing and well-debated subject in the pet service industry. Visit any social media outlet frequented by groomers and you will find the industry seems polarized. Groomers, shop owners, and even tax advisers are at odds with one another meanwhile the clients are unaware of the looming controversy behind the scenes.
Sweeping changes and reform in how pet stylists/groomers are compensated for their work has begun. To fully understand the issue and the reason for controversy, it is helpful to review the various methods which groomers were historically compensated for their work.
There are three basic ways which groomers have been traditionally compensated. The independent contractor (IC) method was the most widely used method and is deeply ingrained into the foundation of the industry. Beginning in the late 1970’s and early 1980’s, the pet entered a new phase in the american (and international) household; the need for pet grooming services became more constant and an industry was born.
Traditionally, grooming services were offered at boarding kennels and veterinarian offices as a necessity and an additional revenue source. Due to previous standards in taxation, insurance, and employee codes, it was both beneficial and fiscally desirable to hire a groomer as an independent contractor. The hosting business did not provide regular wage, workers compensation, benefits, or share taxation burden with the groomer IC. Groomer IC’s were compensated based upon a predetermined percentage of their work. Those commissions varied widely throughout the industry with percentages typically ranging from 30-70%.
As the pet owning public’s demand for services grew, stand-alone grooming shops began to open and the burgeoning pet industry was well on its way to the American Pet Products Association’s staggering estimate of over 60 billion dollars in pet expenditures in 2015. For those business owners, hiring groomers as independent contractors became the normal way to compensate for the work completed.
As either hosting business owners or the groomers themselves began to look for different ways to maneuver the changing landscape of business ownership, insurance pitfalls, and the ever-present authority of the IRS, the option of booth/table renting became another consideration. Based upon a similar concept from the beauty and salon industry, the groomer operated as a complete and separate entity from the hosting business and merely utilized the premises to conduct their business. Basically the booth renter became a sublet within the existing business. Enter more regulation and stricter definition of the roles of the parties who participate in this business arrangement. Today, this has become perhaps the most difficult relationship for the involved parties to create and manage legally within the jurisdictions of respective federal, state, and local government entities.
The final option for compensation is for the groomer to become an employee of the hosting Pet Service business. The employer/employee relationship is the most desirous for the entities which regulate employment as they can ensure that proper taxation occurs, employees are working in safe and insured environments, and employees have adequate benefits provided in accordance with established guidelines. The weight of the relationship shifts from the individual to the business owner. And that is where the controversy begins. It is more expensive for companies to employ persons than to farm out the work with IC’s. It does not allow IC’s to avoid taxation or opt out of purchasing their own insurance policies, their own advertising, or their own company infrastructure.
The groomer compensation issues that have arisen as the IRS has enacted sweeping legislation are not going away. Ignorance of the law is not an acceptable defense of the violation of running a business illegally. The IRS has provided many resources so that groomers and business owners alike can become educated and choose to conduct their operations legally. The IRS 20 Factor Test is a simple way to self-diagnose the correct relationship between a business and a person providing
the services.
It’s time that every pet owner begins to ask if their chosen pet service provider is operating legally. The well-being of the people who take care of pets should be a concern of the customer; if someone is willing to operate their business or conduct illegally, are they the right choice for your pet? It’s time that every Groomer accepts that the reform has been created by the richness and success of the industry; it was inevitable that the organization would follow. It’s time that every business owner chooses to become educated. Professionalism should go hand in hand with success and prosperity. ✂
Khris Batts has been involved in the Pet Services industry since the early 1990’s. She has owned grooming shops, boarding kennels, and obedience training schools and is a Certified AKC Canine Good Citizen Evaluator. She is the co-founder of See Spot Grooming & Daycare which currently operates 3 locations in 2 states. Her vision has led her to create a Groomer – centric company which provides education, a positive work atmosphere, and benefits for all Spots. She owns and competes in a variety of events with Wirehaired Vizslas including dock diving and obedience.