As the Federal Court prepares to hear an appeal later this month against the Fair Work Commission's cut in penalty rates for retail and hospitality workers, hairdressers are also facing the chop.

Key points: Plans to cut penalty rates would reduce average hairdresser wage by $4,500, union says

Plans to cut penalty rates would reduce average hairdresser wage by $4,500, union says More than half of salon owners have broken workplace laws and underpaid staff, according to FWO

More than half of salon owners have broken workplace laws and underpaid staff, according to FWO Employers say they could employ more staff if penalty rates were cut

Earlier this year, the commission trimmed penalty rates for hospitality and retail workers and now the hairdressing industry wants to slash Sunday and public holiday rates.

If the move is successful, it will further subtract from record low wage growth in the Australian economy which is stifling consumer spending and in turn putting small business under pressure.

Liz Berry has been a hairdresser for 14 years but she told The Business program that a reduction in penalty rates would be the hardest cut.

"Buying a house is out of the question as it is because the wages are so low," she said.

"Mind you in 20 years' time I could go 'OK, we have enough to buy', but if they cut the penalty rates, no.

"There's no deposit, there's no holiday trip."

The mother-of-three works as a hairdresser on a casual basis on the weekends.

She gets paid double time on a Sunday and double-time-and-a-half on a public holiday.

Liz Berry says without penalty rates her dream of home ownership is over. ( ABC News: Sue Lannin )

Employees could lose $85 per week

The Australian Industry Group is running the case on behalf of Hair and Beauty Australia.

They want to reduce Sunday penalty rates for hairdressers from 200 per cent to 150 per cent and public holiday rates from 250 per cent to 225 per cent.

Currently If rates are cut Difference Sunday rate $42.58/hr $31.93/hr $10.65/hr Public holiday rate $53.23/hr $47.90/hr $5.32/hr

In a statement, Hair and Beauty Australia president Maureen Harding said employers are struggling because of "unsustainably" high penalty rates.

"HABA is seeking a modest reduction in penalty rates that broadly reflects what the commission has already determined to be a fair approach in the context of similar industries, such as the retail sector," she said.

The Australian Workers Union said a cut in penalty rates would mean a qualified hairdresser like Ms Berry could lose $85 a week for an eight-hour Sunday shift and almost $4,500 a year.

That's in an industry where the average annual wage is just $32,000, according to the Australian Hairdressing Council.

Ms Berry said a cut in penalty rates would take a big chunk out of her weekly wage.

"If they cut that, they cut it from families ... and we can't pick up the money anywhere else," she said.

The national secretary of the AWU, Dan Walton, said the plan shows the beauty industry has an ugly face.

"It's a shocking attack on some of the lowest paid trade workers in this country," he said.

"Hairdressers are extremely qualified, very capable people who are the lowest paid trade in comparison to electricians plumbers and the like."

Penalty rates limits jobs: employers

But salon owners told the ABC that many hairdressers can't open on a Sunday because of the wages bill.

Debbie Cook runs the Stylz Hairdressing chain in New South Wales.

Business owner Debbie Cook says she could employ more staff if wages were cut. ( ABC News: Sue Lannin )

"The hairdressing industry is struggling also because there is a lot of salons I suppose and you've got a lot of competition so you need to keep your costs down as much as you can to stay in business," she said.

Mrs Cook said lower weekend and public holiday penalty rates would mean she could hire more staff.

"I'd definitely employ another person in each of my shops on a Sunday if we were in a position to do so if the wages weren't so high," she said.

Fifth-generation barber Steve Salecich said he does not open his Grand Royal Barbers shops in Sydney on a Sunday because of the cost.

He thinks a cut in penalty rates will help high volume, inner city salons but it could make it harder to get skilled staff.

"I think it will be even more harder. I'm finding it very difficult at the moment," he said.

Salon owner Steve Salecich doesn't open on Sundays because of penalty rates. ( ABC News: Sue Lannin )

Australian Hairdressing Council chief executive Sandy Chong agreed a cut in penalty rates could make it harder to find staff to work on a Sunday although she supported the wage cut.

Mr Walton said the AWU will oppose HABA's claim before the Fair Work Commission.

"The commission actually requested the hair and beauty industry to bring this on to have a look at it," he said.

"I'm concerned that the outcome will be that workers in this industry will lose their penalty rates."

Beauty industry has an ugly reputation

The hairdressing industry is beset with widespread underpayment and exploitation amid many cash-in-hand and backyard operators.

A 2013 study by the Fair Work Ombudsman of the hairdressing industry found more than half of employers had broken workplace laws, with underpayment of staff the most common offence.

Earlier this year, the FWO forced a suburban Melbourne hairdressing chain, Siajj, which owns several salons, to improve its working conditions.

The FWO said the company had underpaid workers nearly $290,000.

Ms Chong said one third of hairdressers faced underemployment and she was concerned with the number of unregistered "kitchen operators".

"There are 11,000 salons who are not paying superannuation at the moment," she noted.

Mr Walton said a wage cut could worsen already poor conditions for hairdressers.

"They are already facing a lot of challenges as it is," he said.

"There's a lot of dodgy business in the hairdressing industry and so all of this is in the backdrop of the hair and beauty association going after workers' penalty rates."

Ms Berry said hairdressers put in years of training and professional development for little return.

Hairdressers are required to buy their own equipment and a set of speciality scissors can cost $3,000 to $4,000 alone.

Ms Berry said she had spent thousands of dollars on her hairdressing kit.

"We do a lot more than just hairdressing. We are counsellors to some people," she said.

"We've got young girls who go, 'why would we do hairdressing when we can go and work at Woolies bakery for more than what we're getting',".

Catch 22

But Ms Cook said salon owners were under pressure from high wage costs because hairdressing was so labour intensive.

"If small business is forced to pay high penalty rate there's going to be less and less of them and they'll be less jobs," she said.

"So I suppose it's a catch 22."

Ms Berry isn't sure what she will do if Sunday and public holiday penalty rates are cut.

"I can't really leave hairdressing either because I've tried and they say I'm not qualified enough in any other trade because I'm "just" a hairdresser," she said.

Life could become harder for some of Australia's lowest paid workers.